Posted Apr 09, 2012 12:36 pm CDT
A Dewey & LeBoeuf partner who left the firm last week for DLA Piper says he expects more people will be leaving his former firm, and he’s not sure how it will fare in the aftermath.
John Altorelli will co-chair the U.S. finance practice for DLA Piper. He spoke with the Am Law Daily about his expectations for Dewey and some of its problems. On the bright side: The firm collected “a ton of money” in the first quarter, and it has a survival strategy. On the downside: Some partners could be making more money elsewhere, and Altorelli expects more people to leave.
Dewey has lost at least 47 partners in 2012. According to the Washington Post, the exodus was reportedly caused by lower-than-expected profits that made it difficult to pay lateral partners who had lucrative pay guarantees. Former Dewey partners have said the firm owes more than $100 million, the Post reports, though the firm has declined comment on debt levels.
Here are highlights from the Am Law Daily interview with Altorelli:
“I’m not sure how they can weather the departures. To be fair, I expect there will be more. There are younger guys down the food chain not making that much money. It’s hard to fault those who are making $300,000 or $400,000, if they could be making $600,000. You can’t balance the books on the backs of young partners who really are just making their way.
“A lot of us guys at the top have agreed to forego completely or defer compensation, which is what you’re supposed to do. It never came out in the right way [in the press], but people voluntarily gave up compensation. …
“If we didn’t have this long of a recession, we wouldn’t be having this conversation. The firm was too strong, the people are too good. …
“It doesn’t take a rocket scientist to say, I don’t know how many more they can suffer. What I’m hoping, though, is that everybody at the firm does their best to keep clients’ interests first, take care of our creditors, take care of employees. If that happens it could be a survival path for a smaller Dewey.”