House of Cards

It only took a few months for Dewey & LeBoeuf to collapse, but the reasons behind its fall were years in the making.

, The American Lawyer


Although the demise of Dewey & LeBoeuf—the biggest failure of a U.S. law firm ever—unfolded over just a few dramatic months this spring, the reasons behind it were years in the making. Debt, some of which dated back to predecessor firm Dewey Ballantine, played a role, as did a growth-by-lateral strategy that chairman Steven Davis had spent years perfecting. The firm’s biggest misstep, though, may have been its decision in 2008 to significantly boost partner compensation—on the eve of the Bear Stearns meltdown.


Part I: A Troubled Merger

The 2007 merger that created Dewey & LeBoeuf was negotiated quickly and quietly, with rank-and-file partners receiving little hard financial information.

Part II: Golden Handcuffs
To solidify support for the merger, chairman Steven Davis extended lucrative compensation guarantees to an ever-expanding group of partners.

Part III: Perfect Storm
A combination of lavish guarantees, declining revenues, and mounting debt begins to take its toll.

Part IV: The Final Days
The extent of Dewey & LeBoeuf’s debt obligations slowly became apparent, sparking an exodus out of the firm.

SIDEBAR: The $2 Million Man
Executive director Stephen DiCarmine had the most powerful nonlegal job at Dewey & LeBoeuf.



Not Too Big to Fail
Dewey & LeBoeuf is the biggest Am Law 200 firm to collapse, but it’s not the only one. Here are ten other firm failures that made news in their day.

Dewey's Worldwide Presence
While largely New York based, the firm maintained a robust network of offices around the world, mostly in European money centers and oil capitals. Here's a map of Dewey's global reach at the end of 2011.

The Dewey Departure Tracker
More than 300 partners poured out the doors of Dewey & LeBoeuf in the course of a few frantic months. We tracked where those decamping partners landed.



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