Isn't it ironic that some of the "best minds" in the legal profession were really not much different than anyone else who took on too much debt and made long-term commitments when at the same time the money coming in to pay those obligations was somewhat uncertain and not guaranteed.
In either case, when the foundation begins to crack the outcome will most likely be the same!
First a timeline of events for former D&L Chairman Steven Davis (Source):
- At the beginning of March, Davis announced that D&L would cut 5-6% of firm personnel.
- Later in the month, Davis announced that bonuses would be late.
- At the end of March, Davis took a “demotion,” and the firm instituted a five-person chairman’s office.
- In late April, news broke of a possible criminal probe into Davis’s involvement with Dewey’s downfall.
- At about the same time, Davis was removed from all firm leadership positions.
Mismanagement 101 or New Law Firm Economics
James B Stewart’s weekend New York Times article “Dewey’s Collapse Underscores New Law Firm Realities” reveals an old and now unimaginably charming billing practice which he was privy to as an associate at one of Dewey's peers. After reviewing the billing reports a partner prepared a one-sentence bill --- in calligraphy--- on beautiful stationery which read: ‘For professional services rendered,’ followed by the time period covered and a large number with a dollar sign. (Bold and italics added) Such was the depth of trust between lawyers and clients. It is hard to imagine a more dramatically changed environment than today’s world of AFA’s, outsourcing and “beauty contests.”
In Leverage We Trust
Law firms have long term debts but not necessarily long term assets. Dewey offered unusually lucrative long term contracts to attract lateral partners. They floated bonds. They had lines of credit. Their greatest assets were the lawyers with a book of business and as soon as those started walking out the door the model was doomed to collapse. Law Firm consultant Bruce MacEwen is quoted in the Times story as describing Dewey’s situation as “Mismanagement 101.” (Source)
The downfall for the smartest men in the room may begin the day when they start to believe that they are!
Tweet Follow @Halthouse1
Save thousands a year on 5-star travel!
Pay a one-time small fee and nothing else, ever!
Offer the same program to your friends
Or just enjoy the travel deals yourself!
Discount luxury travel AND a business opportunity?
Watch a 3-minute video, get all of the details about GTN Vacations and sign-up today!
Just click this link and you are on your way!