1. Dewey & LeBoeuf
Crisis Analysis
KATE CLARK
JMC 4413
OCTOBER 23, 2012

2. Firm History
 In 2007, Dewey Ballantine merged with LeBoeuf, Lamb,
Greene & MacRae
 One of the largest in New York City and had branches in
26 offices across the globe
 Locations from Abu Dhabi, United Arab Emirates to Tbilisi, Georgia
 Offered legal services for corporate, insurance, legal, tax
and restructuring practices
 Focused on providing services from the most prestigious
lawyers in the industry
 In 2010, Chambers Global, a researcher and publisher
for the legal market, recognized the organization in 37
different practices in 2010

3. Early Signals of a Crisis
 Trends similar to Finley Kumble’s implosion in 1987
 After 2008 financial crisis, Dewey still developed over 100
multimillion dollar contracts with its top clients
 Immediately started competing with the top dogs of the industry by
recruiting rivals’ lawyers and offering them unbeatable salary
packages
 Signed off on a $125 million bond offering in March 2010
 Unusual for law firms; they typically borrow from partners or a
revolving line of credit from a bank
 Suggested that Dewey needed money it could not repay for a period
of time
 Cancelled its summer associate program
 pays law school interns $3,000 a week
 Typically led to a first-year position at Dewey earning $160,00 a year

4. Crisis
 As of January 2012, 80 of Dewey’s 300 partners left
the firm after consistent poor financial performance
 Owes over $300 million in liabilities
 $225 million is owed to its banks
 Other creditors, such as the headquarters’ landlords and
former partners owed money as well

5. Organization’s Response
 In March 2012, Dewey demoted the Executive
Chairman, Steven Davis, as a member of the office of
the chairman
 Terminated in April after Manhattan District Attorney began
company investigation
 May 28, 2012, Dewey filed for chapter 11 bankruptcy
 Allows institution to restructure its business under the
direction of an appointed trustee
 90 employees were asked to stay temporarily on staff
to help with the wind-down of the business

6. Organization’s Response Continued
 Internal Responsibilities
 Notifying employees of its termination
 Liquidating its assets
 Closing 26 offices
 Shredding individual client files
 Developing claims for the estate
 Investigating potential causes of action for court cases
 External Responsibilities
 Mark Shaw and Shay Bannon of BDO LLP are the Joint
Administrators of Dewey LLP and Dewey Services Limited
 Act as liaisons to creditors
 Richard Slade of Richard Slade and Company is responsible for
protecting the clients
 Enacted a “clawback” deal that asked more than 700 of Dewey’s
former partners to pay money back, which promises protection
toward future litigation regarding Dewey’s downfall

7. Media Response
 American Law Daily reported Dewey’s released financial
estimates
 Many investors based decisions off of these fraudulent reports
 ALD followed the series of events leading to Dewey’s bankruptcy in
order to responsibly report the unraveling truth of Dewey’s finances
 New York Times offered continual coverage of internal
and external factors of the bankruptcy
 Published a feature story about Dewey’s currently active Co-ed
Softball team as an avenue to spotlight former employees and their
new positions
 Forbes Magazine released the 12 page bankruptcy files
 Specified course of action for the Ch. 11 bankruptcy and the causes
claimed by Dewey
 Insurance Journal criticized Dewey’s management team
as the ring-leaders to financial dishonesty

8. Stakeholder Response
 Social Media
 YouTube users took advantage of the downfall as an education
opportunity to build awareness of red flags that lead to the
bankruptcy of a company.
 Bloomberg Law streamed 3 videos mentioning Dewey within the last
60 days
 Stockholders vary in agreemtn
 $70 million clawback deal was accepted and followed by more than
400 partners
 Henry Bunsow sues the firm for portraying itself as bigger than it
was in order to maintain its hiring spree
 Employees earn leadership positions in other firms
 Jared Kanover serves on the general at Hedge Fund
 Michael Didriksen serves as a partner at Baker Botts

9. Recommendations
 Create a crisis management team that reviews financial
information before it is distributed to partners
 Distributes power and knowledge of the company’s performance and
condition to more people than the company chairman
 Develops a teamwork environment between Dewey’s crisis
management team and the partners
 Publish a constitution of financial ethics and protocols
 Binds crisis management team, executives, partners and employees
 Clearly specifies procedures for including information in quarterly
reviews
 to calculating the company’s worth
 the financial auditing process
 Information distribution
 Quarterly reviews include all the financial activity within employee
compensations, investments, and acquisitions

10. Recommendations Continued
 Develop a crisis management plan for future
financial downturns
 Environmental scanning of news reports, social media and
conditions of the stock-market
 List proactive measures to diminish effects of a financial crisis
 Hiring and investing freezes
 Pay ceilings
 Elastic expenses that can be cut from budget
 Create a direct hotline for investors to request information on
financial procedures

11. Recommendations Continued
 Post Crisis Measures
 Inform stakeholders of Dewey’s plans to respond to the crisis
through a press release
 Instead of newspaper reports, Dewey should be the first to
announce its crisis and course of action
 Crisis management team should be appointed as trustees
responsible for winding down the company
 Ensures that Dewey follows consistent protocols throughout the
crisis management plan

12. References
 Davis, Steven H., and Peter Sharp. Chambers and Partners. N.p., n.d. Web. 20 Oct. 2012.
<http://www.chambersandpartners.com/USA/Firms/240-71398>.

 Harris, Elizabeth A. "Defunct Law Firm Keeps Its Troubles Off the Softball Field." TheNew York Times. The New York Times, 07
Sept. 2012. Web. 20 Oct. 2012.<http://www.nytimes.com/2012/09/07/nyregion/dewey-leboeuf-keeps-itstroubles-off-the-
softball-field.html?_r=0>.

 Lattman, Peter. "Dewey & LeBoeuf Files for Bankruptcy." DealBook. NY Times, 28 May 2010. Web. 20 Oct. 2012.
 <http://dealbook.nytimes.com/2012/05/28/dewey-leboeuf-files-for-bankruptcy/>.

 Lattman, Peter. "Teetering, Dewey Ousts Ex-Head From Post." DealBook. NY Times, 4 Apr. 2012. Web. 19 Oct.
2012.<http://dealbook.nytimes.com/2012/04/29/dewey-leboeuf-ousts-ex-headstevenh-davis/>.

 Mason, Jamie. "Dewey & LeBoeuf Gets Interim Cash OK." The Deal Pipeline. The Deal,31 May 2012. Web. 21 Oct. 2012.
<http://www.thedeal.com/content/restructuring/dewey-leboeuf-gets-interim-cashok.php>.

 Randazzo, Sara. "Ex-Dewey Partner Bunsow Sues Former Leaders for Misrepresenting Firm's Finances." The Am Law
Daily. N.p., 13 June 2012. Web. <http://www.americanlawyer.com/PubArticleALD.jsp?id=1202559262206&Ex
ewey_Partner_Bunsow_Sues_Former_LeadersFor_Misrepresenting_Firms_Fina
ces&slreturn=20120920224054>.

 Shipp, E. R. "Finley, Kumble, Major Law Firm, Facing Revamping or Dissolution." The New York Times. The New
York Times, 11 Nov. 1987. Web. 21 Oct. 2012.<http://www.nytimes.com/1987/11/11/business/finley-kumble-major-law-firm
facing-revamping-or-dissolution.html?pagewanted=all>.

 Smith, Jennifer. "Dewey Seeks Clawbacks." Wall Street Journal. N.p., 12 July 2012. Web. 21 Oct.
2012.<http://online.wsj.com/article/SB1000142405270230374070457752122034787582.html>.

 Social Mention. N.p., 22 Oct. 2012. Web.<http://socialmention.com/search?q=Dewey+and+LeBoeuf&t=all&btnG=Se
rch>.

 "The Dewey Chronicles: Rise and Fall of a Legal Titan." The Dewey Chronicles: The Rise and Fall of a Legal Titan. Insurance
Journal, 14 May 2012. Web. 19 Oct. 2012.
 <http://www.insurancejournal.com/news/east/2012/05/14/247383.htm>.