Dewey latest: no guarantee of London associate pay after 31 May
Dewey & LeBoeuf today told its remaining London associates that it cannot ensure it will pay their salaries beyond the end of this month.
Management at the troubled US firm communicated the news at a meeting at lunchtime today open to all associates in the office, announcing that lawyers would only be paid until 31 May.
A Dewey spokesperson confirmed that the firm has promised associates salaries up until the end of May but that it cannot currently offer “definitive assurance” of any payment past this date.
The firm has been able to ensure that associates receive their May salaries by placing them in a bank account.
“The London LLP has put the payroll for May into a secure account,” the spokesperson said.
The firm warned US staff on Friday that the firm could close and they could lose their jobs (8 May 2012).
The firm is already in talks over the UK and French LLP potentially going into administration, with BDO hired as advisers (1 May 2012).
The firm’s London trainees are scrambling to find jobs (25 April 2012), with former office head Peter Sharp - who has quit for Morgan Lewis & Bockius (3 May 2012) - heading efforts to find them new homes, including holding a briefing with the Solicitors Regulatory Authority.
Today’s meeting was arranged by European insolvency head Bruce Johnston, who is set to join Morgan Lewis & Bockius and was present at the session alongside European restructuring head Mark Fennessy. It is also understood that some associates expressed anger at the non-appearance of Sharp.
Sharp told The Lawyer: “I’m continuing to work with Dewey & LeBoeuf to find the best possible outcome for as many as possible of its lawyers, trainees and staff.”
It is thought that Dewey City associates who find new jobs are required to serve their notice period or wait until they are released by the firm, with some lawyers understood to be turning up to work just in order to meet these obligations and not carrying out much legal work.
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Readers' comments (14)
Anon | 8-May-2012 3:32 pm
Perhaps they should have taken that offer from a Chinese firm...
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Anonymous | 8-May-2012 4:53 pm
Good luck to the poor trainees, can't see the SRA doing much to help them..!!
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Anonymous | 8-May-2012 4:54 pm
So what happens to all the staff's notice periods which presumably in line with other firms run from 1 month - 3 months? The firm just forgets about them?
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Anonymous | 8-May-2012 5:20 pm
If the firm cannot guarantee payment after the end of this month, then it risks being in breach of contract towards its employees, who will be entitled to walk and bring claims for wrongful dismissal. Restrictive covenants may well be unenforceable in such circumstances.
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Anonymous | 8-May-2012 5:21 pm
Trainees and those who were expecting to become trainees have now learnt to trust no-one. What trust can future clients have in those who have scuttled away?
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Anonymous | 8-May-2012 9:37 pm
I don't hold up much hope for anyone bringing breach of contract claims against a firm that is in administration or has simply ceased to exist.
How though are partners still taking drawings at this time if the firm is not solvent (i.e.unable to pay its debts etc which include salary and notice payments under employee contracts) which this news item certainly suggests it is.
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Leonardo Di Caprio | 8-May-2012 9:52 pm
So the partners, from the safety of their respective lifeboats, urge the remaining steerage class passengers to stay calm, await rescue and have a game of quoits or something. Riiiiight......
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Anonymous | 8-May-2012 10:50 pm
If the firm doesn't have the money to pay its creditors, then .... it doesn't have the money to pay its creditors (including staff).
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David | 8-May-2012 11:00 pm
I shouldn't imagine that enforcing restrictive covenants will be at the top of D&L's agenda at the moment.
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Anonymous | 9-May-2012 5:37 am
To: Anon | 8-May-2012 3:32 pm
Good point, but I think King & Wood Mallesons is already a full house.
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