April 19, 2012 6:36 PM
As Partner Losses Near 70, Dewey's Troubles Spread Overseas
Posted by Sara Randazzo
With a few exceptions, the partner defections buffeting Dewey & LeBoeuf this year have been confined to the firm's nine domestic offices. Now, however, Dewey's problems may be going global.
So far, only the embattled firm's Dubai office has officially announced plans to leave. As The Am Law Daily reported last week, Dechert is taking on most of those attorneys, as well as a handful in London, by hiring a nearly 20-lawyer emerging markets team.
Leading the charge from Dewey to Dechert is London-based partner Camille Abousleiman, who will head his new firm's Middle East and Africa practice. Also joining Dechert as partners are Louise Roman Bernstein in London, Chris Sioufi and Gavin Watson in Dubai, and Nicola Mariani in Tbilisi, Georgia. Three national partners, one counsel, and seven associates also join in Dubai, with additional Dewey associates expected to move over in London. The new hires bring Dechert into the Dubai market for the first time.
Abousleiman says that before he and his team made the move, they narrowed the field of potential new firms to two, got offers from both, and then decided on Dechert. The firm's financial stability—and its lack of debt—"was attractive to us," says Abousleiman, adding that the transition has been smooth so far and that Dewey has "been extremely nice about it." (He dismissed news reports suggesting Dewey was enforcing a clause in its partnership agreement requiring partners to remain at the firm for 60 days after resigning. "They haven't tried to do that," Abousleiman says. "And I don't think they would if they could.")
Abousleiman says that he and Roman Bernstein have worked together since 1994. In 2007, the pair left what was then Dewey Ballantine to join LeBoeuf, Lamb, Greene & MacRae, not knowing the two firms would merge within months. "Luckily," he says, "we left on good terms."
Dewey's Moscow and Italy outposts, meanwhile, are also reportedly seeking new homes, though both offices deny that is the case.
Bloomberg reports that the 42-lawyer, 12-partner Moscow office, which Dewey Ballantine opened in 1990, is in talks with Orrick, Herrington & Sutcliffe; Winston & Strawn; and King & Spalding. Contacted by The Am Law Daily, spokesmen from Orrick and Winston declined to comment. A representative for King & Spalding did not return a request for comment.
Moscow practice head Brian Zimbler also did not return a call seeking comment. Reached Thursday, Moscow corporate partner Oleg Berger called the report "very inaccurate and misleading" and denied it emphatically.
"Clearly we're all sort of watching developments," he said. "But we remain committed to working on behalf of our clients at the firm. I don't know where those stories came from; they are very inaccurate."
As for Dewey's Italian operations, U.K. publication The Lawyer reports that the firm's offices in Milan and Rome are considering bolting. Dewey's Italian partnership, which numbers 18, released a statement in both Italian and English Thursday in which it stressed a desire to stay together and dismissed as false the rumors that it is in discussions with other firms.
"The Italian partners, as all other worldwide partners, are following with a great degree of attention the evolution of the LLP, but are confident that the current situation can be solved and that they will be able to continue being part of a network of great quality and tradition as Dewey & LeBoeuf," the statement said. "Should the LLP situation develop otherwise, the Italian partners' common main goal shall be to preserve the unity and strength of a group of professional that autonomously has achieved a leadership position on the Italian market."
Dewey Ballantine entered the Italian market nine years ago with the addition of current Milan head Bruno Gattai and two other partners from Simmons & Simmons, along with a partner from Linklaters and a lawyer from Merrill Lynch. The two Italian offices—which are full-service but are particularly strong in the areas of private equity, employment, and antitrust—have since grown to more than 100 lawyers combined.
Dewey's Warsaw office also appears to be staying put for now. Last week, Lejb Fogelman, a senior partner in the office, told The Am Law Daily that he and his colleagues in Poland's capital are not thinking of leaving.
"The New York news has not had any impact on us here," Fogelman said, noting that under Polish law, the roughly 50-attorney office is a separate business entity than Dewey's U.S. arm. "We are in a different reality. We've been self-supporting."
Fogelman (who counts filmmaker Roman Polanski as a friend and had a small part in The Pianist), joined Dewey Ballantine in 2002, when a large group from Hunton & Williams teamed up with what was then a relatively small Dewey office in Warsaw.
"Every day 'I'm getting calls from headhunters, other law firms," he said. "I say to the guys here, 'Look, we've been together for 15 years. Let's shut up and do our work.' This is not our game. We're not going to be the tail that wags the dog. I don't have to leave. If something would happen, though, in five minutes I have five, 10 options."
The firm's new management team, installed last month, has ties to Poland. Stephen Horvath, a London partner set to take over the firm's day-to-day operations, works closely with the Warsaw office on M&A and finance deals, according to his Dewey Web site bio. Like Fogelman, Horvath joined Dewey from Hunton.
E. Leigh Dance, a legal consultant with ELD International based in Brussels and New York, tells The Am Law Daily that over the past two weeks, every lawyer she has spoken with in Europe, including those with local and international firms in the United Kingdom, France, Germany, and Italy, are involved "in some level of conversation with Dewey lawyers about possible moves."
While no Dewey lawyers outside the United States have yet left for local firms, according to The Am Law Daily's tally, Dance says that such movement would not surprise her, given what she perceives as a heightened interest among European lawyers at international firms to join top-tier local shops that they may view as more stable.
The developments abroad come as Dewey continues to negotiate with its banks over the renewal of a $100 million line of credit. Dan DiPietro, chair of Citi Private Bank's law firm group, released a statement last week that Dewey is "a client in good standing with Citi Private Bank" and that the relationship between the two companies dates to the 1970s.
Asked Thursday if DiPietro's statement still stood, a Citi spokeswoman deferred to J.P. Morgan Chase & Co., which she described as the agent bank in the Dewey negotiations. A J.P. Morgan spokesman declined to comment.
On Thursday, Dewey's New York office lost another partner, Stanton Lovenworth, who was chair of the firm's life sciences global industry sector group. Lovenworth is now counsel with O'Melveny & Myers in New York. Lovenworth's loss follows a spate of New York partner departures earlier this week, including a five-partner energy and infrastructure team that jumped to Hunton & Williams, a litigator who moved to Dorsey & Whitney, and two corporate and securities partners who joined Pillsbury Winthrop Shaw Pittman. A partner and two associates in Washington, D.C., also moved to Cozen O'Connor. The firm played down the latest losses, saying in a statement that "the number who have left to date, including firm-initiated reductions, is consistent with the reduced head count contemplated by our plan."
Amid what is by now a loss of nearly 70 partners since January, Dewey continues to bring in work. A firm spokesman sent an e-mail Wednesday noting the firm's role in helping Illumina fend off a $6.2 billion hostile bid offer from Roche. (Illumina shareholders had a preliminary vote Wednesday to make changes to its board and move on with its business without Roche.) Dewey lawyers on that team include Silicon Valley partners Rick Climan, Keith Flaum, and Robert Chung and New York partner Eric Blanchard.
Also on Wednesday, Dewey touted a new assignment for the Kingdom of Saudi Arabia's Electricity and Co-Generation Regulatory Authority. According to the firm's press release on the matter, it will be advising the Saudi entity on the formation of consumer care guidelines, as well as on the creation of rules and regulations to protect the rights of service providers.
Attorneys working on the Saudi project include partners Scott Mueller, Brian FitzGerald, and Khalid Al-Thebity, under the direction of consultant Ashley Brown.
Closer to home, Dewey's New York office isn't letting the firm's other problems put a damper on its political activities. The New York Observer reports that liberal standard-bearer Elizabeth Warren, a Harvard Law School professor challenging U.S. Senator Scott Brown in Massachusetts, held a fund-raising event at the firm's midtown Manhattan headquarters to an "overflow crowd of 50 or so." Several attendees told Warren at the event that they were former students of hers, according to the Observer. Capital, an online publication that covers New York, also reported that Dewey's New York office was the site of an April 9 "Voter Protection Initiative" meeting attended by the Democratic National Commitee's voter protection director, Will Crossley.
According to the Center of Responsive Politics's OpenSecrets.org database, Warren has collected $11,250 in Dewey-connected donations for her race against Brown. The site also shows that a Dewey political action committee has brought in a total of $84,650 and made $47,500 in contributions so far to Republican and Democratic candidates during the 2012 election cycle.
American Lawyer senior writer Julie Triedman contributed reporting.