Tempers flared when Dewey rainmakers learned of 50% pay cut, ex-partner testifies
Steven Davis arrives in handcuffs for the arraignment at Manhattan Criminal Court in March 2014. Photo by Reuters Carlo Allegri from the February 2015 ABA Journal.
The mood became tense at a February 2012 meeting when 17 top rainmakers at Dewey & LeBoeuf were told they needed to take a 50 percent pay cut. Particularly galling was the news, to some attendees, of special compensation agreements under which some 100 partners had been receiving income regardless of how well the firm did each year.
But most of the 17 partners agreed with the need to chop their pay in half and sought to keep the firm operational “right to the end,” securities lawyer Ralph Ferrara testified Monday at the Manhattan criminal financial fraud trial of three former Dewey leaders. Ferrara—now at Proskauer Rose in Washington, D.C.—himself earned $5 million annually at Dewey and had no equity stake in the firm, the Wall Street Journal (sub. req.) reports.
The three defendants—former Dewey chair Steven Davis, chief financial officer Joel Sanders, and executive director Stephen DiCarmine—say they did nothing wrong.
The firm imploded in May 2012, resulting in a record-breaking bankruptcy.
Related coverage:
ABAJournal.com: “Defense in Dewey leaders’ trial blames disloyal partners who ‘picked up their marbles and ran’”
ABAJournal.com: “Former Dewey employee testifies he reclassified money paid to firm chairman”
ABA Journal: “How Dewey management’s rosy picture masked an ugly truth”
