Dewey Demise Claims More Collateral Damage

Dewey Demise Claims More Collateral Damage

Does 29-year-old Zachary Warren hold the key to understanding the demise of the storied white-shoe law firm, Dewey & LeBoeuf? Apparently, Manhattan District Attorney Cyrus R. Vance Jr. thinks so.

Zachary Who?

In 2006 Warren graduated from Stanford University with a degree in international relations. Two years later, he went to work for Dewey & LeBoeuf as a client relations manager: it was his first job out of college. His work at Dewey, Am Law Daily’s Sara Randazzo reports, was “to pester partners to make sure clients paid their bill.” (That, by the way, is an annual ritual at every big law firm, and it’s no fun.)

When Warren started at Dewey, he was 24 years old. After spending his “gap year” there, he attended Georgetown Law, where he served on the law review. After graduation, he took a federal district court clerkship in Maryland. Then he accepted another clerkship—which, as of last week, he still had—for U.S. Court of Appeals for the Sixth Circuit Judge Julia Smith Gibbons.

Having left Dewey three years before its demise, in 2012, Warren must have found it odd when Vance’s office called to discuss the firm’s failure. Most people who once worked at the firm would have been surprised, too. They’d never heard of Warren until last week, when he was indicted, along with three more familiar Dewey names: Steven Davis, Stephen DiCarmine and Joel Sanders, the firm’s last chairman, executive director and chief financial officer, respectively.

An Observer’s Perilous Plight

What did Warren do to merit inclusion with such a powerful and notorious threesome to create a foursome that the indictment identifies collectively as the “Schemers”? According tothe allegations of the 106-count indictment, not much.

On or about December 30, 2008—the end of the first full calendar year of operation following the blockbuster merger of Dewey Ballantine and LeBoeuf Lamb—Warren’s boss, chief financial officer Joel Sanders, allegedly told him that he would receive his full bonus “if the firm satisfied its bank covenants.” The indictment doesn’t say whether Warren knew what that phrase meant.

The following day, the indictment alleges, Warren sat in a meeting with Sanders and an unnamed “Employee C” while Sanders and Employee C discussed “financial adjustments.” That evening—New Year’s Eve at 7:24 p.m., to be precise—Employee C wrote to Warren: “Great job, dude. We kicked ass! Time to get paid.”

Twelve minutes later, Warren responded, “Hey man, I don’t know where you come up with some of this stuff, but you saved the day. It’s been a rough year but it’s been damn good. Nice work dude. Let’s get paid!”

Finally, two months after that, on February 24, 2009, Warren supposedly responded falsely to a message from a Dewey employee about an allegedly inappropriate financial adjustment in 2008.

Only one of the 106 counts against the “Schemers” includes Warren. It is #106 and is a bit confusing: “CONSPIRACY IN THE FIFTH DEGREE … as follows: The defendants … during the period from on or about November 3, 2008, to on or about March 7, 2012, with intent that conduct constituting the crime of SCHEME TO DEFRAUD IN THE FIRST DEGREE be performed, such crime being a felony, agreed with one and more persons to engage in and cause the performance of such conduct.” I’m not sure where to put the “[sic].”

Warren has another distinction: He is also the subject of his own, separate indictment, alleging six counts of falsifying business records.

The Awesome Power of Government

To understand what is happening to Zachary Warren—a millennial whose first dream job has now turned into a nightmare—look no farther than prosecutor Vance’s press conference. He announced that seven former employees who worked in Dewey & LeBoeuf’s accounting department have already pled guilty “for their individual roles in the scheme.”

That’s how these things work. Government investigators start at the bottom of an organization, identify low-level employees who might know something, apply pressure, and acquire guilty pleas that create cooperating witnesses who can testify against the real targets. Indicting a low-level person can also have an in terrorem effect, demonstrating to others the government’s seriousness.

I’ve never met or communicated with Zachary Warren. But my strong suspicion is that he refused to take a plea deal. Reportedly, he passed the bar last July. Among other things, a guilty plea could end forever his ability to practice law. That would be a tough way to close out an investment of five years (law school plus two clerkships) and $150,000 in tuition.

Abandoning Common Sense

Warren’s codefendants may have something to say about whether any crime occurred at all. The presumption of innocence has not yet lost all meaning. Still, some aspects of the case against Zachary Warren seem particularly peculiar.

“Pestering partners at year-end to get clients to pay outstanding bills” is not exactly a policy-making position. How can anyone who worked in the bureaucratic bowels of a big law firm for less than a year bear responsibility for what went wrong three years later? Should low-ranking administrative staff members everywhere start asking questions about what superiors want them to do and why? How should they assess the answers? When should they resign in protest?

Likewise, when Warren left Dewey in 2009, the partnership collectively was making hundreds of millions of dollars in profits. At the time, no one in the profession could have foreseen the firm’s disastrous demise in 2012. And before making too much of the juicy emails allegedly attributed to Zachary Warren, please pause, add a little context and consider how all of us sometimes fire off quick responses to emails and text messages.

Most importantly, think about how you’d feel if someone you knew found himself in Zachary Warren’s position. Twenty-four years old and only months into his first job after college, he participated in an end-of-the-year revenue collection meeting with superiors. More than five years later, that meeting led to a “perp walk” with three codefendants, any of whom could have made or broken his career at Dewey & LeBoeuf.

Then think about the government’s awesome power to turn lives upside down in a pursuit that Warren’s lawyer called a “travesty.” You might conclude that he has a point.

Steven J. Harper is an adjunct professor at Northwestern University and author of “The Lawyer Bubble: A Profession in Crisis” (Basic Books, April 2013) and other books. He retired as a partner at Kirkland & Ellis in 2008, after 30 years in private practice. His blog about the legal profession, The Belly of the Beast, can be found at A version of the column above was first published on The Belly of the Beast.