There is being wise after the fact, and then there is doggedly resisting wisdom’s advances in the face of recurring events. What else to make of the storm battering Dewey & LeBoeuf, a firm that has managed to get itself into considerable difficulties despite being a top 25 US practice with revenues north of $900m (£570m)? Because the unhappy combination of aggressive expansion, high debt and outsized pay for ‘star’ partners that currently ails Dewey has repeatedly been shown to be a risky way to do legal business.
And the fragility of this model is all the starker in the individualistic US market, given the ease with which departing partners can take clients with them. High growth strategies are inherently volatile – that has been proved time and again in law and numerous other industries. Making it work requires sophisticated management, strong balance sheets or a lot of fortune. There aren’t many neutral observers arguing that Dewey has excelled at the former two, and luck always runs out in the end.
