Dewey & LeBoeuf: Following the Fallout
The Dewey disaster keeps rolling on and creating more collateral damage, with the most obvious problem being hundreds of lawyers and legal staff worldwide finding themselves out of work in an already bleak job market in some regions. Over at Belly of the Beast, they’ve been running profiles of the firm’s leadership (aka the people to blame), and this week it’s partner Jeff Kessler:
“This is the third in a series profiling Dewey & LeBoeuf’s former leaders. Apparently, Jeffrey Kessler (Columbia University, B.A., 1975; Columbia Law School, J.D., 1977) has become a prisoner of his celebrity clients’ mentality. A prominent sports lawyer, he analogizes big-name attorneys to top athletes: “The value for the stars has gone up, while the value of service partners has gone down.”
Kessler was a long-time partner at Weil, Gotshal & Manges before joining Dewey Ballantine in 2003. After the firm’s 2007 merger with LeBoeuf Lamb, he became chairman of the Global Litigation Department, co-chairman of the Sports Litigation Practice Group and a member of the Executive and Leadership Committees. Long before he became a member of the Gang of Four in Dewey & LeBoeuf’s office of the chairman, he was a powerhouse in the firm.”
For those of you who still don’t know what brought this about (believe me, I’ve run into a few lawyers who still had no idea this was going on), the bottom line is that the firm has not been performing well enough pay out the compensation guaranteed to its partners:
“To deal with outstanding IOUs to Dewey partners whose guaranteed compensation couldn’t be paid when the firm underperformed for the year, Kessler helped to mortgage its future: for “a six- or seven-year period, starting in 2014, [a]bout six percent of the firm’s income would be put away to pay for this….”
It’s a remarkable notion. Partners didn’t get all of their previously guaranteed earnings because the firm didn’t do well enough to pay it. But rather than rethink the entire house of cards, it morphed into a Ponzi scheme whereby future partnership earnings — for six or seven years — would satisfy the shortfall. Never mind that there was no way to know who would be among the firm’s partners in those future years. The money had to be promised away because the stars had to be paid.”
You would do well to follow Belly of the Beast to get more insight into the trends in hiring, compensation and management that led to the downfall of one of the world’s powerhouse law firms. This post on some unfortunate comments from former partner John Altorelli is particularly amusing/enlightening.
And visit Law Alliance to see what’s on offer at firm’s that still have job openings and the ability to make payroll.
