The conventional wisdom is that Dewey & LeBoeuf failed because of an overly aggressive growth strategy that relied too heavily on large salary “guarantees” for lateral hires of “megarainmaker” partners. That analysis, while not inconsistent with the facts now known, may be both incomplete and too simplistic.
From what we now know, Dewey did not plunge into bankruptcy solely because the salary guarantees of many partners were no longer economically feasible. Instead, the most direct contributing factor to the firm’s failure appears to have been the speed and ease with which partners left the firm when it became apparent that the full amounts of their guarantees could no longer be paid. At that point some partners simply “jumped ship” and took their lucrative practices to other firms. Others soon followed suit, and as a result the entire firm quickly spiraled into insolvency.
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