Dewey & LeBoeuf, a storied law firm with roots going back a century that once employed more than 2,500 people, filed for bankruptcy last night, marking the largest law firm collapse in US history. The firm embraced aggressive growth, often snagging lawyers with huge pay packages it eventually couldn't afford. Saddled with $315 million in debt and unable to pay partners millions they were already owed, Dewey & LeBoeuf eventually cut partner salaries and saw a walk-out. The exodus brought the firm down, the New York Times reports.
The bankruptcy leaves hundreds of junior lawyers and support staff struggling to find jobs; about 90 employees will stay on as Dewey liquidates. Partners are expected to lose tens of millions, collectively, but almost all of them have found jobs at other firms. "This is a very sad day for the legal profession," says a former federal judge. "Dewey is a fabled firm with a lot of great lawyers and a demise of this magnitude is unprecedented." Some worry other large firms that have embraced the same business practices—which put profit maximization over "a shared sense of purpose," the Times notes—will suffer a similar fate. Click for the full story.