Key partner at law firm Dewey defects to rival

NEW YORK Thu May 3, 2012 7:52pm EDT

People walk past a sign outside the law firm Dewey & LeBoeuf in New York City May 1, 2012. The New York law firm, struggling with a debt crisis and criminal probe of its former chairman, has ''encouraged'' its partners to seek new jobs, one partner said, citing an internal memo. REUTERS/Lee Celano

People walk past a sign outside the law firm Dewey & LeBoeuf in New York City May 1, 2012. The New York law firm, struggling with a debt crisis and criminal probe of its former chairman, has ''encouraged'' its partners to seek new jobs, one partner said, citing an internal memo.

Credit: Reuters/Lee Celano

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NEW YORK (Reuters) - A raft of new partner defections including a key rainmaker hit Dewey & LeBoeuf on Thursday, as management found itself denying a report that the troubled U.S. law firm planned to close shop as early as in the next two weeks.

Morton Pierce, a Dewey vice chairman, will join White & Case, along with seven corporate and M&A partners in New York, a spokeswoman for White & Case said. In addition to the group's departure, Morgan, Lewis & Bockius said on Thursday it had hired three litigation partners from Dewey's London office, including its managing partner, Peter Sharp.

Pierce, who had been chairman of predecessor firm Dewey Ballantine, said Thursday that the last few weeks at the firm had been a challenge.

"Has it been difficult? Yes," he said in an interview, adding that he felt "great" about going to White & Case.

A spokesman for Dewey declined to comment on Pierce's plans to leave.

In the wake of the defections, both a spokesman for Dewey and a member of its management group found themselves Thursday afternoon denying a published report in trade publication The American Lawyer that the firm planned to shutter by May 15.

"No such plans exist," Martin Bienenstock, a bankruptcy partner at Dewey and a member of the firm's four-person office of the chairman, said in an e-mail.

Dewey, which has offices in 26 cities around the world, was until recently among the top 20 largest law firms in the United States, with 1,040 lawyers, according to an annual survey by the National Law Journal, an industry publication.

But since January, it has lost more than 100 of its 300 partners amid a mounting debt crisis and concerns over partner compensation.

In recent weeks, Dewey has considered a number of alternatives including deals with other law firms.

Merger talks with SNR Denton, the latest merger candidate, have come to an end, a person briefed on the matter said Thursday. The talks fell apart after Dewey said that its former chairman, Steven Davis, was under investigation by the Manhattan district attorney's office, according to the person, who spoke on condition of anonymity. Davis has denied wrongdoing.

Dewey had previously been in talks with Greenberg Traurig about a possible transaction, but those talks also ended, Dewey said Sunday.

Bienenstock said in an email Thursday morning that talks "are not off with any firm, they simply change scope."

And, while law firm SNR Denton said it is not talking about a merger, it appears to be considering hiring lawyers from Dewey. SNR Denton Chief Executive Elliott Portnoy sent an email Wednesday to SNR Denton partners saying the firm was making efforts to attract the "strong, profitable parts" of Dewey, according to an SNR Denton partner who read the email.

Portnoy declined to comment. Jeff Scalzi, a spokesman for SNR Denton, said "we are looking at selective acquisitions, but we aren't commenting further."

Another firm, Patton Boggs, has been exploring opportunities short of a full merger, a different source familiar with the matter said on Monday.

In an email Monday, Dewey management "encouraged" partners to seek out other jobs.

Bienenstock said Monday that bankruptcy was "not in current plans."

On Monday, Dewey obtained a two-week extension in negotiations between it and a bank group over a $100 million credit line. Dewey has drawn down $75 million on that credit line.

Bienenstock, who declined an interview request, said in an e-mail on Thursday that Dewey had not appointed a dissolution committee, an entity put in place by law firms to oversee their wind down process.

"We have created no such committee; and I do not plan to dignify with further responses the press' insatiable appetite to fabricate negative facts," he said.

(This version of the story corrects possible closure report to as early as next two weeks, not next week, paragraph 1)

(Reporting by Nate Raymond and Leigh Jones; Editing by Noeleen Walder and M.D. Golan)

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Comments (1)
bobber1956 wrote:
Ok so make them account to the SEC for the 75 million right now before this goes any further south.

May 03, 2012 3:24pm EDT  --  Report as abuse
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