Posted Mar 19, 2012 01:50 pm CDT
Updated: Dewey & LeBoeuf, which has already seen at least 18 of its 300 or so partners exit in the first two months of 2012, is now losing another 12.
Headed to Willkie Farr & Gallagher, the latest departing partner group includes John Schwolsky, who served as co-chair of the corporate finance practice in New York; Michael Groll, who co-chaired the insurance sector group there; and Alexander Dye, who headed the firm’s mergers and acquisitions practice in the United States, reports the Am Law Daily.
“They are among the most elite practitioners in their field and will add greatly to our capabilities in their areas of expertise,” said Thomas Cerabino, the co-chairman of Willkie Farr, in a statement emailed to the legal publication on Saturday.
A spokesman for Dewey said the firm had been anticipating the group’s departure for several weeks. It was made official on Friday. In an email obtained by the American Lawyer, , the chairman of Dewey, Steven H. Davis, said he regretted he group’s decision to leave and told partners, “I recognize the emotional impact that these departures will have on our partnership and colleagues.”
In recent days, both the DealBook page of the New York Times and the Wall Street Journal (sub. req.) have run articles discussing pressures the firm is facing following the merger, in 2007, of Dewey Ballantine and LeBoeuf Lamb Greene & MacRae.
At the time, the legal economy was booming. But it has since suffered from a recessionary economy that continues to lag, as far as corporate legal work is concerned. Meanwhile, Dewey has taken on new obligations by hiring more partners laterally, bringing in 37 in 2011, reports the DealBook. Today, the firm owes tens of millions in deferred compensation to partners, the article says.
“Our model has been to attract and retain legal talent with big retainers,” Davis told the New York Times. “But at a time when growth has not been great, that philosophy has come under attack.”
Another Wall Street Journal (sub. req.) article says the firm is more than $100 million in debt, relying on unidentified sources.
The law firm did not immediately respond to a request for comment from the ABA Journal.
Meanwhile, on Friday, March 23, another six partners announced plans to exit, bringing the total number of expected partner departures so far in 2012 to at least 36:
Updated on March 19 to include information from another Wall Street Journal article and link to Reuters stories and on March 23 to include news of six more planned partner departures.
Reuters: “Twelve more Dewey & LeBoeuf partners jump ship”
Reuters (opinion): “Breakingviews: Wall Street’s bonus model fails legal eagles, too”