Embattled New York law firm Dewey & LeBoeuf LLP warned its employees on Friday that they could soon lose their jobs and the firm may shut its doors, diminishing hopes that the once-storied institution will survive.
In a notice sent to Dewey’s employees, the firm said: “As you are undoubtedly aware, Dewey & LeBoeuf LLP has unexpectedly experienced a period of extraordinary difficulties in the last few days.”
“Although we could continue to pursue various avenues, it is possible that adverse developments could ultimately result in the closure of the firm, which would result in the termination of your employment,” said the notice, which was reviewed by The Wall Street Journal. Click here for the letter.
Such a notice, known as a WARN notice, is required under state and federal law to be sent to employees prior to a mass layoff or a shutdown of operations. Employers that fail to give such notice can be held liable for back pay.
A spokesman for the firm did not immediately respond to a request seeking comment.
The firm, which has been struggling to cope with a wave of partner defections amid disputes over compensation, also carries a heavy debt load. The firm’s top partners are still in talks with a syndicate of banks which are continuing to ask the law firm for financial information, according to a person familiar with the matter.
The leaders of Dewey, which owes about $ 75 million on a $ 100 million credit line, has said the firm is not preparing a bankruptcy filing.
“In order to give you as much advance notice as possible. . . this letter will serve as conditional advance notice . . . of the possibility that your employment may be terminated, and if that occurs your separation will be permanent, not temporary,” read the notice to employees.
“On behalf of the firm, we want to thank you for your support and dedicated service,” it said.
The 10th floor of the firm’s Manhattan headquarters was buzzing with activity on Friday as legal assistants, paralegals and other gathered in a room there to meet with recruiters and job-placement agencies, according to one Dewey employee.
At the job fair, which was organized by the firm, “hundreds” of employees handed in resumes and “milled around in groups,” according to the employee. “There was a palpable sense of fear and angst in the room,” the person said.