How to handle Dewey (or similar firms) Forum

[Anonymous User]

I'm trying to figure out this part of the memo:

At the same time, however, we, like some other firms, have also experienced a significant increase in our cost base.

How does your cost base increase in ways you couldn't have predicted and planned for? Revenue is the variable figure in law firms, but this isn't Apple trying to figure out the cost of silicon and man-hours of labor to build an iPad. What were the associates doing? They're salaried and work in buildings with long-term leases. Were they sitting on Westlaw running ALLCASES searches around the clock for fun?

Bringing in partners requires significant overhead.

[MrAnon]

I'm trying to figure out this part of the memo:

At the same time, however, we, like some other firms, have also experienced a significant increase in our cost base.

How does your cost base increase in ways you couldn't have predicted and planned for? Revenue is the variable figure in law firms, but this isn't Apple trying to figure out the cost of silicon and man-hours of labor to build an iPad. What were the associates doing? They're salaried and work in buildings with long-term leases. Were they sitting on Westlaw running ALLCASES searches around the clock for fun?

Healthcare costs for one. Nobody retires or switches jobs anymore. So old secretaries sit around and get older. 5 year projections made back in 2007 are completely stale because they anticipated regular turnover and retirements which no longer occur. Plus budgetmakers and other decision makers are eternally optimistic that the old ways of retirement and turnover will return. "Things will get back to normal this year". So far they haven't. You see this in the overall economy as well. Japan has been doing it for 20 years. We're just getting started.

[LawIdiot86]

I'm trying to figure out this part of the memo:

At the same time, however, we, like some other firms, have also experienced a significant increase in our cost base.

How does your cost base increase in ways you couldn't have predicted and planned for? Revenue is the variable figure in law firms, but this isn't Apple trying to figure out the cost of silicon and man-hours of labor to build an iPad. What were the associates doing? They're salaried and work in buildings with long-term leases. Were they sitting on Westlaw running ALLCASES searches around the clock for fun?

Healthcare costs for one. Nobody retires or switches jobs anymore. So old secretaries sit around and get older. 5 year projections made back in 2007 are completely stale because they anticipated regular turnover and retirements which no longer occur. Plus budgetmakers and other decision makers are eternally optimistic that the old ways of retirement and turnover will return. "Things will get back to normal this year". So far they haven't. You see this in the overall economy as well. Japan has been doing it for 20 years. We're just getting started.

I agree with you on the Japan thing, but they can adjust class size of SAs and change the health care plan for their individual costs. My thought was that they expected revenue to really grow with all the laterals they hired, who then didn't produce as expected, but still got their fat guarantees. Costs are exactly as expected, but revenues are lower then expected (even if they went up nominally). Also, we don't know the quality of their revenue. It could be tied up in contingency or deadbeat clients.

[2LLLL]

I agree with you on the Japan thing, but they can adjust class size of SAs and change the health care plan for their individual costs. My thought was that they expected revenue to really grow with all the laterals they hired, who then didn't produce as expected, but still got their fat guarantees. Costs are exactly as expected, but revenues are lower then expected (even if they went up nominally). Also, we don't know the quality of their revenue. It could be tied up in contingency or deadbeat clients.

The ATL article mentioned laterals and opening international offices as "signs of strength" for D&L. But aren't these always the things that precede the downfall of a major firm? Trying to grow revenue by bringing in laterals is kind of similar to corporations boosting their share price with buybacks- maybe a short-term boost, but doesn't work out as well over the long-term. Hate to go all John Madden on you here, but when the expected revenue from a lateral or international office doesn't pan out, and the costs are still there, that's not a good thing.

[Old Gregg]

The ATL article mentioned laterals and opening international offices as "signs of strength" for D&L. But aren't these always the things that precede the downfall of a major firm? Trying to grow revenue by bringing in laterals is kind of similar to corporations boosting their share price with buybacks- maybe a short-term boost, but doesn't work out as well over the long-term. Hate to go all John Madden on you here, but when the expected revenue from a lateral or international office doesn't pan out, and the costs are still there, that's not a good thing.

Welcome to the problem of aggressive expansion. There's a reason why Baker & McKenzie, dla piper, and Skadden are at the top of revenue charts, but absent from the top of PPP charts.

[Anonymous User]

I really wanted Dewey and was rejected post-CB. Needless to say, I'm pretty happy that I didn't end up getting that offer, because I probably would've taken it.

Going to repeat this again. Never been so happy for that "we don't like you" letter as I am now.

I know! I wish I had saved my letter.

It was a super-obnoxious letter too.

"Thank you for your interest in a summer associate position at Dewey & LeBoeuf LLP. We appreciate and encourage your legal aspirations.

Unfortunately, we are unable to invite you in for further interviews. We hope that you will find a summer associate position at a firm that is a good fit for you, and we wish you the best as you start out your legal career.

Sincerely yours,
[most egregiously pixelated signature ever]"

[Anonymous User]

"Thank you for your interest in a summer associate position at Dewey & LeBoeuf LLP. We appreciate and encourage your legal aspirations.

Unfortunately, we are unable to invite you in for further interviews. We hope that you will find a summer associate position at a firm that is a good fit for you, and we wish you the best as you start out your legal career.

Sincerely yours,
[most egregiously pixelated signature ever]"

Mine was post-CB. "We hope you find a place where you will be a better fit".
Yeah, I found a place that isn't going to be the next Howrey, so I think that is a better fit .

[Guchster]

"Thank you for your interest in a summer associate position at Dewey & LeBoeuf LLP. We appreciate and encourage your legal aspirations.

Unfortunately, we are unable to invite you in for further interviews. We hope that you will find a summer associate position at a firm that is a good fit for you, and we wish you the best as you start out your legal career.

Sincerely yours,
[most egregiously pixelated signature ever]"

Mine was post-CB. "We hope you find a place where you will be a better fit".
Yeah, I found a place that isn't going to be the next Howrey, so I think that is a better fit .

That is a completely unnecessary line in a ding letter. I will not be bidding on Dewey this fall.

[Anonymous User]

The ATL article mentioned laterals and opening international offices as "signs of strength" for D&L. But aren't these always the things that precede the downfall of a major firm? Trying to grow revenue by bringing in laterals is kind of similar to corporations boosting their share price with buybacks- maybe a short-term boost, but doesn't work out as well over the long-term. Hate to go all John Madden on you here, but when the expected revenue from a lateral or international office doesn't pan out, and the costs are still there, that's not a good thing.

Welcome to the problem of aggressive expansion. There's a reason why Baker & McKenzie, DLA Piper, and Skadden are at the top of revenue charts, but absent from the top of PPP charts.

This is not fully accurate. Skadden does fine on PPP. The PPP tables are heavily skewed towards Wall Street firms (think the big NYC only shops) and plaintiff's firms (Quinn, Boies). For the rest of the world, it actually makes some decent sense to expand because it is hard to compete with those firms otherwise. Firms like Latham, Sidley, Mayer Brown, GDC, OMM have definitely benefited from having an expanded market.

The Dewey partners that defected to Sidley stated that a big reason for their move was Sidley's Asia footprint. Many clients demand such a footprint. If done right, mergers can really help a firm. If done wrong, they can be disastrous. Once again, this all comes down to firm management.

[Old Gregg]

This is not fully accurate. Skadden does fine on PPP. The PPP tables are heavily skewed towards Wall Street firms (think the big NYC only shops) and plaintiff's firms (Quinn, Boies).

Whoa, PPP tables are skewed toward firms with higher profits? Holy shit, I had no idea. Also, K&E is in the top 10 for PPP. When you punch enough holes in your rule, it becomes less rule-like and more excuse-like.


Skadden is not at the top of the PPP tables because they have a bunch of shitty satellite offices that generate a ton of overhead and a ton of associates, all of whom are not billing 2000+ hours.

Latham, Sidley, Mayer Brown, GDC, OMM have definitely benefited from having an expanded market.

Whoa, really? Are we talking about the same OMM that acquired that NY Private Equity shop... only to lose them to Paul Weiss? What about... Mayer Brown... aren't they a step a way from imploding? I got it man... this year things will be different. FOR SURE!!

(and since when did GDC and Latham merge with other firms? I guess I'm missing your point here... that international expansion is good? I never said it was bad. International expansion is good when the offices are generating enough revenue to counterbalance their overhead. In other words, the offices are good when they're generating a... profit!)

Sidley stated that a big reason for their move was Sidley's Asia footprint.

They can state all they want. The real "big reason" for their move was that Dewey wasn't paying them/Dewey is falling apart.

If done right, mergers can really help a firm. If done wrong, they can be disastrous. Once again, this all comes down to firm management.

Problem is: 9 times out of 10... a merger is done wrong. There's a reason why those Wall Street firms above turned down merger offers from the likes of Freshfields, Linklaters, and clifford chance (and there's a reason why Slaughter & May will never merge with a New York firm): It doesn't work.

[Anonymous User]

Alright, you've changed my mind a bit and make some strong points. When I was scanning my brain for recent law firm mergers, I am having trouble thinking of ones that went well, that is a strong point.

I don't have a dog in this fight. Most of what you say is dead on but I have a couple things to add:

1) Kirkland. They do a ton of PE deals in Chicago and NYC, they are very much like a Wall Street firm for that reason. Seeing them in the Top 10 PPP is really nothing shocking, their corporate side is just as amazing as their lit side and BK got them through the downturn.

2) GDC, Latham, Mayer Brown, etc. I never said GDC or Latham merged, I was merely stating that international expansion can be a very good thing for some firms. OMM and their PE merger is really a red herring in this discussion, we were talking about international expansion. As for Mayer Brown being close to implosion as you said, AmLaw had their profits up over 10% last year (http://amlawdaily.typepad.com/amlawdail ... brown.html) and I have seen on here that they are taking pretty significantly larger summer classes this year from what my friends there say. Seems like they are doing well. I work at a rival Chicago firm and we are doing better too, it seems like Chicago is finally thawing a little bit but that is neither here nor there.

3) 9/10 times a merger is done wrong. I definitely agree with you on this one. I think the whole board should read this article, it is absolutely the best article I have ever read about Biglaw management: http://www.washingtonian.com/articles/people/21837.html . It compares the expansions of Hogan & Hartson and Howrey and how one went super well and one destroyed the firm.

I don't know much about Dewey, they have a small Chicago office built mainly off of stolen partners from other firms in the city. Did they do a recent expansion/merger?

[Old Gregg]

As for Mayer Brown being close to implosion as you said, AmLaw had their profits up over 10% last year (--LinkRemoved-- ... brown.html) and I have seen on here that they are taking pretty significantly larger summer classes this year from what my friends there say.

The top 10% increase in profits came off the back of only a 2% increase in revenues.

I don't know much about Dewey, they have a small Chicago office built mainly off of stolen partners from other firms in the city. Did they do a recent expansion/merger?

Dewey & LeBoeuf was the result of a merger between Dewey Ballantine and LeBoeuf Lamb. It's well known that the firm's troubles in recent years can be credited to that merger.

[sunynp]

I think if you are an SA at Dewey, you need to assume the worst. There is no point waiting around and wondering what will happen. If it is too late to get another SA - and who knows for each individual person - then you need to make sure that important partners get to know you a bit for the summer. Make sure you can get recommendations from these people even if the firm implodes or they leave. Try to figure out some specific area you can get focused expertise in, even if you have to ask for extra work and stay late, or do more work than any one else in the summer. Pick something like re-org and focus on bond defaults, for example, just find something that you can begin to know what you are talking about and be confident in giving advice. You have to leave with a couple of people you can rely on to help you get your next job. You need good experience to talk about at OCI next year.

Be sure to behave with utmost professionalism. Act as if nothing is going on. Never complain, bitch or angst at work about what is happening - you can post anon on TLS if you need to vent. Never gossip about the firm at work. Never ask questions about what is happening.

You need to understand that you are going to be working in a very unpleasant environment. Do not let that deter your focus. Some people may resent your being there as an SA and having a lot of fun events, be professional about that too.

If you are in NYC, go to the summer events the bar associations have for SAs - try to fit it in your schedule. Make as many contacts as possible.

[Old Gregg]

I don't at all think that Dewey will suffer the same fate as Howrey. I do believe, though, that there will be more layoffs and that a 100% summer associate offer rate is not even close to guaranteed at this point. I also believe that incoming Class of 2012 associates will probably be deferred.

[Indifferent]

Damn.

[5ky]

Damn.

Scooped three days ago.

[Indifferent]

Damn.

Scooped three days ago.

Fixed.

[09042014]

I'm an incoming SA at a D&L office and I'm incredibly nervous right now. I'm frightened about the possibility of them no-offering a huge part of the class if these rumors are true and indicative of a larger problem. I know 3L OCI tends to be a bloodbath, especially after a no-offer...

I'd gun 3L OCI if I were you. I think if Dewey implodes getting no-offered won't have as much stimga as a normal no offer.

[LawIdiot86]

In the same vein as Dewey is this news out of Husch Blackwell today: http://abovethelaw.com/2012/03/yes-virg ... moted-too/

This wouldn't implicate an SA there since no one's getting fired and it seems like only equity partners got hit, but what should SAs going there next year do in response to news like this?

[Anonymous User]

An SA going to one of these firms needs to be doing the exact same thing an SA going to *any* firm should be doing:

- gunning hard as a 2L and not letting off the gas
- working hard over the summer and making a great impression
- keep ties strong with lawyers at other firms, even the firms you turned down.

The only additional thing they should do is prepare for 3L OCI whereas others should just do 3L OCI if they don't like their SA.

This is a good lesson to all of us. The only thing /person you can rely on is yourself. Latin honors, law review, awards, etc., are things they can never take away from you and travel with you forever. Maximize where you are at this current moment because top credentials will get placed if, god forbid, your firm goes under.

And the kids that picked Dewey or whatever, it isn't their fault. Nobody has any idea that these sorts of things are about to happen. I never once saw Dewey mentioned in the absurd "Firms to Avoid" thread during 2011 OCI. Plenty of firms mentioned in that thread had record years last year. Nobody knows a thing and that is especially true of this website on matters like these.

[Anonymous User]

An SA going to one of these firms needs to be doing the exact same thing an SA going to *any* firm should be doing:

- gunning hard as a 2L and not letting off the gas
- working hard over the summer and making a great impression
- keep ties strong with lawyers at other firms, even the firms you turned down.

The only additional thing they should do is prepare for 3L OCI whereas others should just do 3L OCI if they don't like their SA.

This is a good lesson to all of us. The only thing /person you can rely on is yourself. Latin honors, law review, awards, etc., are things they can never take away from you and travel with you forever. Maximize where you are at this current moment because top credentials will get placed if, god forbid, your firm goes under.

And the kids that picked Dewey or whatever, it isn't their fault. Nobody has any idea that these sorts of things are about to happen. I never once saw Dewey mentioned in the absurd "Firms to Avoid" thread during 2011 OCI. Plenty of firms mentioned in that thread had record years last year. Nobody knows a thing and that is especially true of this website on matters like these.

Solid advice. How would you suggest forming ties with lawyers at other (large) firms? I find it easier to do this will lawyers at smaller firms.

Also, at least some positive news out of D&L (mixed in with the negative news): http://amlawdaily.typepad.com/amlawdail ... m-law.html

[2LLLL]

http://online.wsj.com/article/SB1000142 ... TopStories

"Twelve partners are leaving New York Law Firm Dewey & LeBoeuf LLP in the largest group defection yet from a firm troubled by internal disputes about compensation.

The partners are to join the insurance practice at Willkie Farr & Gallagher LLP, according to a spokesman for Dewey & LeBoeuf.

The group move, which could also include a number of junior attorneys who work for the partners, strikes at the heart of its insurance practice, long regarded one of the best in the U.S.

. . .

The group headed to Willkie Farr includes a few lawyers that ex-partners said were key rainmakers at the firm.

Among those departing: Alexander Dye, Michael Groll, John Schwolsky and Robert Rachofsky.

. . .

The firm is also saddled with a significant amount of debt. Ex-partners estimate Dewey & LeBoeuf owes about $250 million, between a bond issue it floated in 2010 and another $100 million in revolving lines of credits with a number of banks. Mr. Davis has said the firm isn't in default on its loans."

[Guchster]

18 partners since January. Ffffuuuuuu

[Morgan12Oak]

So this makes 30? Ouch

[Anonymous User]

Dewey's insurance practice is (was) Chambers band 1 too... not good.