Two hundred UK-based staff at US law firm Dewey and LeBoeuf are waiting to hear of their fate after the firm’s catastrophic meltdown across the pond put all their jobs in jeopardy.
A crisis-management team is now discussing the options for the London office of the international firm which is based in the City. The team, headed by London managing partner Peter Sharp, is considering a range of options including partnering with a rival, winding up the LLP in the UK or entering administration.
Dewey employed 110 lawyers in London at the end of March this year, including 35 partners, and also employed 85 support staff.
The firm has suffered something of a spectacular collapse in New York after being brought to its knees by soaring debt, a dispute over pay and an investigation by the Manhattan District Attorney’s office into potential wrongdoing by the firm’s former chairman Steven Davis.
On Friday night the US firm told its New York staff that the closure of the firm was a possibility.
“Although we continue to pursue various avenues, it is possible that adverse developments could ultimately result in the closure of the firm, which would result in the termination of your employment,” a statement read.
The international firm was formed in 2007 after a merger between Dewey Ballantine and LeBoeuf, Lamb, Green and MacRae. The firm attempted to develop itself into an aggressive corporate law firm, employing some 1300 lawyers across 26 global offices.
The firm fell into trouble after offering star performers guaranteed pay packages which became unsustainable after work dried up during the financial crisis. Trouble started this year, with around 80 partners defecting to rival firms, most often over rows linked to pay.
The firm is in last-ditch talks with its lenders to renegotiate the terms of a $100m loan, but is also thought to owe a further $125m to insurance companies who bought a private bond issued in 2010.
Although the London office is a separate legal entity from the business in New York, it is still struggling to avoid the repercussions of events in the US.
A spokesman for the London office said: “There is a lot of work being done right now on all the implications from what is happening in New York.”
Read more on the story (The Telegraph)
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