Wednesday, May 9, 2012

The End of Dewey & LeBoeuf

Dewey’s Jeffrey Kessler Heading to Winston & Strawn

Jeffrey Kessler, right, with DeMaurice Smith, center, head of the N.F.L. players’ union
One of Dewey & LeBoeuf’s four members of its office of the chairman is departing for a rival, the latest sign that the firm is on the brink of collapse.
Jeffrey Kessler, who headed Dewey & LeBoeuf’s litigation department and is a top sports-industry lawyer, is leaving to join Winston & Strawn, according to a person with direct knowledge of his decision.
Mr. Kessler did not immediately respond to a request for comment. As recently as last week, Mr. Kessler maintained that the firm had no plans to close in mid-May or to seek bankruptcy protection.
A spokesman for Winston & Strawn did not immediately respond for comment. Mr. Kessler’s planned move was earlier reported by the Above the Law blog.
A number of Dewey partners are expected to join him at Winston, this person said, including Seth Farber and Harvey Kurzweil.
Mr. Farber and Mr. Kurzweil are the two Dewey partners who are conducting an internal investigation of Steven H. Davis, the former Dewey chairman. The Manhattan district attorney’s office has also opened an inquiry into Mr. Davis’s conduct as head of the firm. Mr. Davis has denied any wrongdoing.
Mr. Kessler was one of four Dewey partners who ousted Mr. Davis from his leadership post late last month as they tried to save the firm.
Winston & Strawn, an old-line Chicago firm with about 900 lawyers, is perhaps best known for its litigation practice. Its chairman, Dan K. Webb, is considered one of the country’s leading trial lawyers.
Dewey & LeBoeuf, which has been devastated by partner defections and financial woes, has effectively ceased operations as large groups of partners leave the firm each day. Dewey’s junior lawyers were told on Tuesday that Monday would be their last day at the firm.
A Brooklyn native, Mr. Kessler earned his college and law degrees from Columbia University. As one of the country’s leading sports-industry lawyers, Mr. Kessler has represented all four major sports leagues players’ unions and numerous star athletes individually, including the basketball player Lattrell Sprewell and the football player Terrell Owens.
Mr. Kessler, who had a contract paying him $5.5 million a year at Dewey, was a vocal proponent of the firm’s star system of compensation that gave top producers outsize multiyear, multimillion-dollar contracts. Those contracts created obligations that Dewey, after posting disappointing financial results, could not meet, leading to a mass exodus of partners in recent weeks.
In an interview in March, Mr. Kessler said there was immense pressure to pay big producers who brought in the clients, while the partners that did the grunt work were worth less and less. He analogized it to the sports world, where the salary spread has widened between star players and others on the team.
He observed that the pay spread between what the New York Yankees all-star Alex Rodriguez and the rest of the team today was far greater than that of the Yankees legend Mickey Mantle and his teammates in the 1950s. The dynamics in corporate law were the same, he said.
“The value for the stars has gone up, while the value of service partners has gone down,” he said.
Also on Wednesday, Richard Shutran, another member of the four-person office of the chairman, departed for O’Melveny & Myers. Mr. Shutran, a mergers-and-acquisitions lawyer, will join O’Melveny along with four other Dewey partners — Junaid H. Chida, Arthur V. Hazlitt, Mark Caterini and Dev R. Sen.
May 8, 2012, 9:11 am

More Top Lawyers Leave Dewey & LeBoeuf

When the partner exodus at Dewey & LeBoeuf began in earnest about six weeks ago, legal industry observers said there were a handful of the firm’s top producers to keep a close eye on.

Among the names most frequently mentioned were Richard E. Climan, a leading mergers and acquisitions lawyer in Silicon Valley, and Berge Setrakian, a corporate lawyer in New York with a large international practice. If those two left, the thinking went, Dewey was in trouble.

Dewey, of course, is already in trouble, as more than 120 of its 300 partners have defected. But both Mr. Climan and Mr. Setrakian are wrapping up the final details on their moves to rival firms, delivering a major blow to Dewey’s chances for survival.

Mr. Climan is joining Weil, Gotshal & Manges, according to a person with direct knowledge of the matter. Joining him is Keith Flaum, along with three other partners and four associates. This is the second lateral move in less than three years for the Climan group; Dewey had poached them from Cooley in 2009.

In Mr. Climan and his partners, Weil gets a pre-eminent West Coast mergers and acquisition practice. Mr. Climan and his team have recently advised Dell on two acquisitions, and they also handled the sale of the Los Angeles Dodgers out of bankruptcy.
Mr. Setrakian is heading to DLA Piper and bringing a number of Dewey partners with him. DLA Piper, with more than 4,000 lawyers, is the world’s largest law firm. It has aggressively grown by hiring star lawyers from other firms with the promise of lucrative pay guarantees.
The moves by Mr. Climan and Mr. Setrakian were reported earlier by The Wall Street Journal.

Also this week, Morgan, Lewis & Bockius has finalized the hiring of Dewey’s 31-lawyer Moscow office. All told, Morgan Lewis has brought on about
65 lawyers from Dewey, including 18 in London.

And Akin Gump announced on Tuesday morning that it had added three Dewey energy industry lawyers to its partnership ranks, including John C. LaMaster, who was chairman of Dewey’s global oil and natural gas group and is based in London.

Dewey’s employees have been warned that the firm could shut down. On Monday, secretaries were told that Friday would be their last day. As of last week, the firm’s leadership said there were no plans to file for bankruptcy.

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