- Reuters
By Jennifer Smith and Ashby Jones
Basic functions were starting to break down Wednesday at the struggling law firm Dewey & LeBoeuf LLP as partners scrambled to get paid for the month.
Partners have been told they won’t get their paychecks on Thursday unless they send out all of their outstanding client bills and submit a time sheet for billable hours, according to a current partner at the firm.
That was a condition lawyers were told lenders imposed as part of an agreement to extend the firm’s $ 100 million revolving credit line, which had been slated to expire at the beginning of the week. An extension would buy the firm more time to collect money owed by clients. The billing push this week has an extra hurdle: Many mailroom staffers were recently let go by the firm.
Some partners scurrying to get their bills out the door were licking and pasting their own postage stamps, and asking secretaries to hustle to the post office, according to another lawyer in the firm’s New York headquarters.
Dewey & LeBoeuf management didn’t immediately respond to requests for comment.
Law firms pay their partners a monthly draw. At Dewey, the per-partner draw is around $ 25,000 a month, according to current and former partners.
Dewey, which employs more than 1,000 lawyers and hundreds of support staff, is struggling to cope with a heavy debt load and the defection of more than 25% of its partnership since the beginning of the year. Its leadership is considering several options to preserve jobs, including transferring practice groups to other firms.
Martin Bienenstock, head of the firm’s restructuring practice and a member of the its four-person office of the chairman, which makes the day-to-day operating decisions of the firm, has said that a bankruptcy filing “is always a last resort” and not in the firm’s current plans.