The troubled New York law firm Dewey & LeBoeuf has overhauled its leadership amid questions about its financial condition and a stream of partner defections.
Dewey’s chairman, Steven H. Davis, has been stripped of his title and will relocate to London. He will join four other lawyers in an “office of the chairman” with five co-equal members representing the heads of the firm’s most profitable practice areas.
In another shakeup, Stephen J. Horvath III, a corporate partner in the firm’s London office, will take control of day-to-day management of the firm in a new position of executive partner. In that post, he effectively replaces Stephen DiCarmine, a non-practicing lawyer who has served in that role. Mr. DiCarmine will remain at the firm and report to Mr. Horvath, said people briefed on the matter.
“An overwhelming consensus” favored the change, said the memo, which was reviewed by The New York Times. The entire partnership still needs to vote on the management reshuffling.
Dewey has lost 37 of its 300 partners since January. The firm ran into problems after it posted disappointing financial results last year and was unable to meet ten of millions of dollars in salary guarantees that it had extended to many of its star lawyers. Among the departures have been eighteen partners from the Dewey’s insurance group, one of the firm’s most respected practice areas.
The most recent resignation was from Sean Gorman, the former managing partner of the firm’s Houston office, who moved with three junior lawyers to the Houston litigation boutique Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing. Also leaving this week was the firm’s marketing manager, Isabelle Young, who left for the law firm Squire Sanders.
Dewey’s new chairman’s office, which will be responsible for “carrying out the firm’s strategy to restructure its organization and concentrate on our core strengths,” includes Mr. Davis; Martin Bienenstock, the head of the firm’s restructuring group; Richard Shutran, head of the firm’s corporate practice; Jeffrey Kessler, the head of litigation, and Charles Landgraf, the managing partner of the Washington office.
Absent from the “office of the chairman” were Dewey’s two vice chairman and longtime top producers — Morton Pierce, a mergers-and-acquisitions partner, and Ralph Ferrara, a securities lawyer based in Washington.
The firm’s leadership has said that their business has picked up during the first quarter of 2012, with revenue up nearly 30 percent over the same period last year.
But the firm also has balance-sheet issues. It’s currently in the midst of renegotiating lines of credit with its bank lenders, and a $125 million bond issue it raised in 2010 begins maturing next year.
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