Law firm Dewey & LeBoeuf has filed for chapter 11 bankruptcy after failing to find a merger partner and will now seek to liquidate its business according to news reports. It signals the end of the saga for the stricken law firm and will be the largest law firm collapse in history. Rumours had been circling Dewey & LeBoeuf that the firm would consider bankruptcy, and the filing for bankruptcy protection was placed on Monday night.
Dewey & LeBoeuf has been losing its partners in recent weeks, with almost all of the high-profile partners already having left the firm for competitors after changes to the firms compensation scheme proved unpopular. It wasn’t just the compensation changes that sealed the firms demise though, the economic environment had an impact on the firms business. Nobody thought it would get this bad though.
Dewey & LeBoeuf had a strong team of insurance-linked securities, catastrophe bond and reinsurance experienced partners and lawyers, the majority of which had already left the firm. You can read our articles on those departures here.
Dewey & LeBoeuf had tried to find a merger partner but negotiations with a number of firms failed. This is likely due to the cost of a merger and the fact that many of the partners which made Dewey & LeBoeuf an attractive prospect had already left.
While this may look as if it narrows the choice of law firms who have the experience to assist with ILS and cat bond transactions, actually the partners who had the experience have gone to a number of firms including some who were not active in these sectors, so choice may well have increased for legal partners in ILS and reinsurance transactions.