‘No firm should ever take anything for granted. Dewey & LeBoeuf was a top-end, white-shoe firm and it over-guaranteed and mismanaged.’ Natasha Harrison, Pallas Partners
A decade on from Dewey & LeBoeuf filing for bankruptcy, global law firm leaders give their reflections and views on the lessons learned from the firm’s demise. Could history repeat itself?
Sobering reminder
‘I don’t want to be accused of grandstanding over the collapse of Dewey & LeBoeuf because it was a great firm. And sometimes when these things happen you can forget the human element at the centre of it – I know people who suffered real financial and emotional hardship as a result, and they are great people and great lawyers. In any case, it’s a sobering reminder that such a thing is always possible.’
Mark Rowley, partner-in-charge of London, Dubai and Riyadh, Baker Botts
Crying shame
‘Dewey & LeBoeuf was a firm with exceptional talent and great lawyers, both in London and the US. It was a great shame at the time to find out that there were circumstances beyond the control of the partners that caused the firm to struggle. It was sad, although certain firms did benefit from the outcome, including ourselves. In any case, the firm had a great market reputation.’
Dominic Griffiths, London managing partner, Mayer Brown
Fresh in minds
‘The Dewey collapse remains – even after ten years – a salutary reminder of the importance of the basic principles for running any successful large business: the need for leadership to be clear, transparent, accessible and accountable, combined with strong corporate governance and a rigorous, values-based approach to management that puts people at the heart of everything and consistently prioritises responsibility for your colleagues, your clients and the wider society in which you operate.’
Oliver Brettle, global executive committee member, White & Case
Longstanding warning
‘No firm should ever take anything for granted. Dewey & LeBoeuf was a top-end, white-shoe firm and it over-guaranteed and mismanaged. It underpins the importance of good financial health, good financial hygiene and management and discipline in growth.’
Natasha Harrison, managing partner, Pallas Partners
Different world
‘Could it happen again? Yes, it could happen, but I think these days the professionalism in big law is on a different level. With all the financial rigour and care that comes with managing a firm and quality of business service professionals that work in those organisations, it’s hard to imagine that that could as easily happen again, but it does require the right level of oversight and rigour and calibre of professionals to be doing the right checks and balances to avoid that.’
Lisa Mayhew, co-chair, Bryan Cave Leighton Paisner
Eternal optimism
‘As an eternal optimist, I’d like to say our industry has learned the lessons of the Dewey fall a decade ago: that law is not just a profession but also a business – and as a business, it must be prudently managed. But then again, we are only five years out from the failure of KWM Europe and that had many echoes of the issues Dewey faced. One thing is for certain, talented lawyers will always fall on their feet. We seized the opportunity to take on 50 lawyers from KWM and it’s proved a resounding success. Could a big law firm collapse happen again? Yes. But we have the lessons and tools to ensure it doesn’t if we just use them!’
Tamara Box, EME managing partner, Reed Smith
Keep your promises
‘A lot of lessons were probably learned. A lot of law firms are run on a relatively conservative basis. We have been helped by a good economic backdrop, but Dewey & LeBoeuf was about deals that they had done with certain partners, where outgoing for the partners was secured, and then what had been promised didn’t actually result.’
Stephen Millar, managing partner, CMS
Downward spiral
‘There will be a polarisation of firms, between those that have properly got themselves into a good position over the last two or three years, and those that haven’t. That polarisation is largely going to be driven by talent. It’s relatively easy to get into a downward spiral where you’re insufficiently profitable, therefore you’re not paying top dollar, therefore you’re losing people. If talent starts leaving, then that drip, drip, drip turning into a flood is difficult to stop.’
Jonathan Jones, European managing partner, Squire Patton Boggs
All about culture
‘The purported failures that led up to the collapse were well documented at the time. I’m sure if management had their time again, they would do things differently. Could history repeat itself? Business failures are always going to happen, but thankfully they remain relatively rare in our industry. It sounds trite, but culture is everything and there’s a reason why the partnership model endures.’
Paul Jarvis, UKME chief executive, Dentons