Correction, 5/16/12, 12:01 a.m. EDT: The original version of this story incorrectly referred to the date of Dewey’s WARN notice and which of the firm’s insurance policies will extend through the end of the year. The second and seventeenth paragraphs below have been revised to include the correct information. We regret the error.
Dewey & LeBoeuf may not be officially dead yet, but as of Tuesday, it is closed.
That’s according to a notice filed by the firm with the New York State Department of Labor in connection with the federal Worker Adjustment and Retraining Act, which requires employers to provide between 60 days and 90 days’ notice when it plans to lay off more than 100 workers. Dewey’s one-page WARN notice, dated May 8 and posted on the state Labor Department’s Web site late Monday, lists 433 employees—a combination of associates and nonlawyers staffers—as being affected by what is described as a “conditional plant closing.”
As The Am Law Daily and sibling publication the New York Law Journal have previously reported, many staffers at Dewey’s Manhattan headquarters office at 1301 Avenue of the Americas worked their last day Friday, while New York and Washington, D.C., associates were informed that Tuesday would mark the end of their time at the failing firm. Sibling publication The Recorder reported last week that California-based Dewey lawyers have also been told that the firm’s Golden State offices would shutter by Tuesday.
The office closings come as what’s left of Dewey’s leadership team—executive partner Stephen Horvath, sole remaining office of the chairman member L. Charles Landgraf, and general counsel Janis Meyer—attempt to liquidate the firm without steering it into bankruptcy. (None of the three have returned interview requests in recent days.) The closings also come as litigation targeting the firm piles up, with the federal Pension Benefit Guaranty Corp. filing suit late Monday in a bid to safeguard the firm’s pension plans.
And while Dewey’s remaining leaders still won’t saying exactly how the firm will close, partners and staff appear to have resigned themselves to the inevitable. “At this point, if you went down a list of partners who were still here, I wouldn’t be surprised if they were leaving in the next day or so,” said one Dewey partner on Tuesday who declined to be publicly identified. As of midday Tuesday, the new professional homes of less than 100 Dewey partners were still unknown. (Those whose whereabouts are known are being tallied in The Am Law Daily‘s Dewey Departure Tracker.)
So far, Dewey’s junior lawyers have been given more guidance than the firm’s partners as to how to leave the firm. In an e-mail to associates last week, a copy of which was obtained by sibling publication the New York Law Journal, Dewey leaders provided a formal termination letter and a protocol to be followed on the associates’ final day.
“Dewey & LeBoeuf is unexpectedly experiencing extraordinary difficulties,” the letter reads. “Unfortunately, the situation is deteriorating at a more rapid pace than was initially anticipated. Due to these adverse developments and the firm’s inability to find alternative solutions, this decision was not previously anticipated and notice of your termination was given as soon as practicable.”
Instead of formal exit interviews on Tuesday, the firm says in the letter, human resources representatives were scheduled to collect associates’ security badges, BlackBerrys, American Express cards, and other firm property.
Partners, meanwhile, have said over the past week that they are receiving no word from firm management, and no dissolution vote appears to be scheduled (Partners received their final paychecks earlier this month). Still, the the mood in the New York office Tuesday was better than it was a week ago because, according to the partner who spoke on the condition of anonymity, there is a sense of closure.
Despite the closing notice, Dewey still has sizable real estate obligations in New York, including the roughly 500,000 square feet of space that it occupies at 1301 Avenue of the Americas in midtown Manhattan. That lease, which was initially entered into by predecessor firm Dewey Ballantine, extends until 2020.
The firm’s landlord, Paramount Group, is already showing Dewey floors to potential tenants, according to a source who works in New York real estate. The firm currently leases 16 floors in the building, including 10, 21–33, part of 39, and 43, which the firm confirmed in April it was seeking to sublease. The real estate source also says that Paramount is working with Wilson Sonsini Goodrich & Rosati—which currently occupies part of the thirty-ninth and all of the fortieth floors—to move to another building the company owns. Such a move, in conjunction with Dewey’s looming departure, would clear up a large block of the tower at 1301 Avenue of the Americas for a new tenant.
Four executives with Paramount’s leasing department did not return requests for comment. A spokeswoman for Wilson Sonsini declined to comment.
Nationwide, Dewey has 10 other active leases totaling more than 252,000 square feet. Those include a second New York lease at 125 West 55th Street, which expires this year, covering space once occupied by predecessor firm LeBoeuf, Lamb, Greene & MacRae. The next largest office is in Washington, D.C., where Dewey has more than 62,000 square feet. The other offices being vacated by the firm are in East Palo Alto; Los Angeles; San Francisco; Hartford; Chicago; Boston; Albany; and Houston. (In East Palo Alto, Dewey is already owed more than $571,000 by now-defunct Howrey, which sublet space from Dewey before the firm’s dissolution.)
Those still with the firm as it winds up its affairs face mounting challenges, including a trio of lawsuits. After saying last week that it was taking over three pension plans sponsored by the firm, the Pension Benefit Guaranty Corp. sued the firm in Manhattan federal court in what the lawsuit described as an effort to terminate those plans, appoint the agency as their statutory trustee, and require that Dewey turn over documents, records, and assets related to the plans.
“Dewey is liquidating and winding up its affairs outside bankruptcy,” says the suit, which was first reported by Reuters. “The continuing loss of revenue-generating partners and Dewey’s debt load has culminated in the imminent demise of Dewey.” The plans, covering 1,776 participants, are collectively underfunded by more than $80 million, the suit says. The agency says it is necessary to terminate the plans to protect the interests of the plans’ participants.
A second suit, brought Friday in New York State court by ABM Janitorial Services, claims Dewey owes the company nearly $299,000 for services that include cafeteria maintenance, tile floor maintenance, and trash removal. As previously reported on The Am Law Daily, a third suit, which claims that Dewey has violated employees’ rights under the WARN act by failing to provide sufficient notice of layoffs, was brought in New York federal court Thursday by plaintiff Vittoria Conn, a document specialist with Dewey since 1999.
In the e-mail to terminated associates, the firm said health benefits provided by the firm would go through the end of May, while contributions to attorneys’ 401k plans would cease with their May 15 paycheck. The firm’s group personal liability insurance is effective through the end of the year, the letter said.
The firm urged associates to complete all billing hour entries before they leaving the office Monday: “Please be sure to clear up all missing and suspended diaries and allocate all hours in pending new matter accounts.”
In the meantime, the partner departures continue. Tuesday’s round included Sutherland Asbill & Brennan snagging the former cohead of Dewey’s U.S. litigation practice, New York–based Ellen Dunn, to bolster its insurance and litigation group. Also in New York, Schulte Roth & Zabel announced the addition of Dewey private equity global chair Joseph Smith, real estate partner Marshall Brozost, real estate of counsel Sanford Morhouse, investment management special counsel Russel Perkins, Shawn McCune, and David Miller, and a team of five former Dewey associates.
In Washington, D.C., energy regulatory partner Hugh Hilliard is now a counsel in the project development and real estate practice at O’Melveny & Myers.
Scott Mueller, the former cochair of Dewey’s energy regulatory department in Boston, and counsel Meabh Purcell have joined Holland & Knight’s energy practice in Boston as partners. Mayer Brown also announced Tuesday that it has added former California Attorney General and ex-Dewey of counsel John Van de Kamp as a counsel in its government and global trade practice in Los Angeles.
In Frankfurt, U.K. publication Legal Week reported that structured finance and capital markets partner Walburga Kullmann, counsel Raphael Pasiek, and three associates are joining the local office of British firm SJ Berwin.
Dewey’s Italian offices in Rome and Milan have also announced plans to form an independent, 130-lawyer spin-off under the name Grimaldi Studio Legale, according to Legal Week. The move follows the group’s hire of Italian corporate lawyer Vittorio Grimaldi, a former Clifford Chance partner, whose own local firm dissolved late last year. Bruno Gattai, the head of Dewey’s Milan office, said a press release will be issued soon with details the new firm.
Brian Baxter and New York Law Journal reporter Christine Simmons contributed reporting.