April 6, 2012 6:09 PM
Dewey Defector Speaks, Opens Up About Partner Pay, Firm Leadership, and What May Come Next
Posted by Sara Randazzo
Nearly 50 partners have left Dewey & LeBoeuf since January, taking their practices to competitors including Sutherland Asbill & Brennan, Willkie Farr & Gallagher, Hogan Lovells, and Sidley Austin. On Friday, The Wall Street Journal broke the news that Dewey structured finance head Stephen Rooney is departing for Mayer Brown, the second partner to leave for that firm this week.
Many of the defectors have remained mum on what prompted them to leave Dewey. But one—John Altorelli, a corporate and finance heavyweight who left Dewey's New York office for DLA Piper earlier this week—spoke with The Am Law Daily at length Thursday about the circumstances surrounding his departure.
Recruited to DLA by Roger Meltzer—who himself joined DLA five years ago from Cahill Gordon & Reindel to help bolster the firm's New York corporate and finance practice—Altorelli says he was drawn to his new firm by the chance to help change the way he practices law. Altorelli, who will cochair DLA's domestic finance practice and serve on the firm's 24-member executive committee, says the firm is experimenting with ways to "try to get back to more of an intellectual pursuit, rather than just grinding out the paper."
As for Dewey, Altorelli had many thoughts to share on former sole chairman Steven Davis, who is now one member of the firm's new five-partner office of the chairman, the firm's compensation practices, and what comes next. What follows has been condensed and edited for grammar, style, and clarity.
I was one of the first guys coming into Dewey after the failed Orrick merger. Mort Pierce recruited me to put a stamp on Dewey, to say: It's okay. By the way, it was. I had five of the best years of my career. It was absolutely the right move. The firm did prosper. If they had merged two years earlier or later, we wouldn't be having this conversation. It's just unfortunate timing. I wish the firm had had more time, another year or two to run off the expenses of the merger.
A lot of bad things will be said, people will be unhappy, people will gripe about, 'Could Dewey have done a better job of managing the information?' Absolutely. They could have and they should have. In most law firms, I think, as good as the lawyers are at advising clients, they're not as good at taking their own advice. They are surprisingly obtuse when it comes to their own situation.
Changes have to be made. Steve Davis was my chairman when I was at LeBoeuf many years ago. And I thought he was great. I was very happy when Steve came over in the merger. I will tell you, he's a solid guy who puts everyone's interests above his own. (Editor's note: Altorelli left what was then LeBoeuf, Lamb, Greene & MacRae to work at Paul Hastings and Reed Smith before joining what was then Dewey Ballantine in 2007)
I was on the executive committee for a short period, and we recently voted Steve in unanimously. He had a lot of support. But against the backdrop, you can understand that people are advising that you have to send a signal to the market. The CEO is a guy who takes the axe. He knows that. He will take the punishment and the pain and take it like a man. As a friend and supporter of Steve, I don't have to agree with everything he's done, but he didn't do anything in his mind that was not right for the firm.
I had stepped down off the executive committee earlier this year. There was a subgroup taking charge of the restructuring, and the executive committee didn't have much input. I didn't want to be second-guessing what the guys doing the work were doing.
Some people I've seen toward the end of my time there were saying: 'We were fine with Steve.' I'm not sure people thought Davis was some kind of culprit here. People felt there needed to be some change that the world could appreciate to build back the confidence. Look at the deals they've been doing. They're pretty spectacular. We collected a ton of money in the first quarter. The firm had some of the best months they've had in a long time. It looked like things were turning the corner.
I'm not sure how they can weather the departures. To be fair, I expect there will be more. There are younger guys down the food chain not making that much money. It's hard to fault those who are making $300,000 or $400,000, if they could be making $600,000. You can't balance the books on the backs of young partners who really are just making their way.
A lot of us guys at the top have agreed to forgo completely or defer compensation, which is what you're supposed to do. It never came out in the right way [in the press], but people voluntarily gave up compensation. It wasn't like the firm was running around saying, we're not paying you. They asked.
I did not have a contract. Other people did. I do not believe in contracts. I don't have a contract here at DLA. I don't worry about getting paid. I produce every year. I could have gotten one at Dewey. That is not how it has to work. If you're any good, you don't need a frickin' contract. It's silly. If you deliver, you'll get paid. The only people who need contracts are those who are not so secure. I feel bad that firms have to go that way, in competition for laterals and the like.
If we didn't have this long of a recession, we wouldn't be having this conversation. The firm was too strong, the people are too good. It crept up. We kept thinking it'll get better tomorrow, then it doesn’t get better. The next thing you know it's been four years.
It doesn't take a rocket scientist to say, I don't know how many more they can suffer. What I'm hoping, though, is that everybody at the firm does their best to keep clients' interests first, take care of our creditors, take care of employees. If that happens it could be a survival path for a smaller Dewey. I don't know how that would work. They seem to have a strategy. Or the firm will be busted up into a bunch of little pieces and survive in the hearts and souls of a lot of good people.