Dewey & LeBoeuf Tolls Partner Profit Payouts to Build Cash Reserve
A second law firm has temporarily stopped partner profit payouts, and this time the law firm is based in New York rather than London.
Partners at Dewey & LeBoeuf have not received monthly profit distributions since August, Legal Week reports. Partners did receive smaller fixed payments during that period, and full profit distributions will resume this month, the story says.
Managing partner Steven Davis told Legal Week that the payments were suspended to beef up the firm’s cash reserve. The news follows a report last week that the British-based law firm Eversheds is eliminating quarterly profit distributions to partners that had been scheduled for November and February.
Davis told Legal Week the tolled payments will help the firm build a significant cash cushion. “As the global economy remains full of uncertainty, we feel it would be imprudent not to do so. The partnership fully understands and supports this.”
Davis said the firm had a strong October, enabling it to resume profit payments in November, but firm leaders will “constantly monitor” the financial situation. “Having a cautious approach to financial management in such times is imperative for a responsible global partnership,” he said.
Dewey & LeBoeuf is the product of a 2007 merger between Dewey Ballantine and LeBoeuf, Lamb, Greene & MacRae. Just last week, Davis painted a rosy picture of the law firm’s situation when he told the National Law Journal that the merger is helping the firm weather the economic downturn.
“Size, in and of itself, gives you greater flexibility in key markets,” he told the publication. “In a certain respect, you’re taken more seriously when you have 500, 600 attorneys in New York. That creates more visibility than either firm had before.”
