Following Monday's revelation that failing New York law firm Dewey & LeBoeuf's management team sent a memo to all of its partners suggesting they seek other employment, things have continued to head south.

The Wall Street Journal reported yesterday that merger talks between Dewey and law firm SNR Denton collapsed after nine days of intensive negotiation. The discussions deteriorated after news broke last weekend that former firm chairman Steven Davis was relieved of his duties amid questions surrounding his conduct and a Manhattan district attorney's office probe.

SNR Denton reportedly had suggested a full merger in which it would have assumed the more than 1,000 remaining Dewey attorneys. However, the deal was dependent upon the merged firm's ability to secure hundreds of millions of dollars in financing, which the new entity would have repaid over a period of five years.