Now that Dewey & LeBoeuf has shut its doors and filed for bankruptcy protection, it’s time for the post-mortems. A law professor and three practitioners offer differing perspectives on why the firm failed. Lance Cole of Pennsylvania State University Dickinson School of Law says New York’s LLP law may have made it too easy for partners to jump ship. James Denlea of Meiselman, Denlea, Packman, Carton & Eberz, says that the rule prohibiting nonlawyer investment in law firms is to blame. And Michael Moradzadeh and Yaacov Silberman of Rimon say the culprit is Big Law’s outmoded compensation system.
New York’s LLP law may have played a role
It possibly made it too easy for partners to jump ship; had it been harder, the mass exodus might have been avoided.
Rule barring nonlawyers from investing was key
Enforced in all 50 states, rule made it impossible for a venture capital firm to play white knight and save Dewey.
Compensation is the main problem
The Big Law model pays based on a black-box calculation — often speculative and arbitrary.