Monday, March 10, 2014

How Hath the Mighty Fallen

 From The New Yorker, Illustration by Barry Blitt, full credit below, fair use claimed
 Greetings All:

Earlier in the week I commented on the guilty plea of The Real Housewives of New Jersey Teresa Giudice and her husband, Joe.  Here's one more news article:

Keeping on the theme of "how hath the mighty fallen," here's another one for you:

It's been reported that the former uber power-house law firm Dewey & Leboeuf had some of its former leaders indicted recently for a variety of moral failings.  A less polite yet (for them) accurate terms is,...crimes.  Of course, they are innocent until proven guilty.  Still, as a former Federal public defender, I can tell you that it is not a good day to get indicted.  Speaking of-

The Manhattan DA had this to say about the indictment:  “Those at the top of the firm directed employees to hide the firm’s true financial condition from creditors, investors, auditors and even partners of the firm....”

One Assistant DA, Peirce Moser,  had this more blunt assessment in court, stating the Defendants, "...acted out of a shocking mix of greed and hubris." 

The court filings are the following:  New York v. Davis et al, New York State Supreme Court, New York County, and SEC v. Davis et al, U.S. District Court, Southern District of New York, No. 14-1528.  Here's the link to the SEC civil legal filing:

Here's a bit of background on this law firm.  Both were well-known law firms and wildly successful  The LeBoeuf firm had money, but had not been around that long.  The Dewey firm, founded by the almost President Tom Dewey had  a great rep but had not been bringing in the cash it used to.  Bringing these two firms together gave them both what they needed.

 "'Dewey married money, LeBoeuf married up' was how some characterized the union."

This firm had revenues in the hundreds of millions of dollars.  The amount causes my head to spin. This firm had thousands of attorneys, approximately 3000 at its height, If I recall.  It must have had thousands of clients, many of the "blue-chip" type.  For a while, it had to be doing very well.  Then the bottom fell out:

"In 2008, Dewey & LeBoeuf had revenues of $954.8 million, more than a hundred million below its targeted budget. It was the first time in a generation that LeBoeuf partners had experienced a shortfall."

So if I follow this right, the firm was supposed to meet billings of a billion dollars.  They came up short.  Wow...

Stewart's writing gives is an insider's view to how a firm so big, so talented could fall so far so fast.  The tale is as tragic as it is American.  It is the perverse converse of Love the comeback" story.  This is the tale of wildly smart, talented people falling hard and fast.  I am not condoning the alleged illegal activity.  I take particular umbrage at lawyers doing wrong.  Not that we're above human frailty.  If anything, we're more screwed up than everyone else.  No, I hold lawyers to a higher standard because we know better.

Yet as I write this, there is another aspect to this story.  This firm oozed respectability, status, prestige.  I also have no doubt the attorneys there were wildly intelligence, incredibly talented, and motivated to succeed.  Stewart quotes one of the fallen leaders about how he wanted his firm to be know:

"It means being the firm of choice for the best law-school students."

I would have never been hired by this firm.  Hell, I would have never been granted an interview.  In 2000, when Dawn and I were looking to move out to North Jersey, I fancied myself a prime candidate for a job in a New York law firm.  After all, I had ample trial experience (in traffic court) and had written at least three appeals to state appellate courts (all summarily denied.)  Yet there were those two pesky little details about the pedigree of my law school (non-existent by big law firm standards) and my class rank.  Some people graduate with distinction.  I graduated with relief, somewhere between the basement and wine cellar of my law school class.  Opps.  I remember one head hunter who said in a thick Neew Yark accent, "Can't use you hon."  Thanks for the candor,...I guess.  Thus ended my quest to ascend to the "big firm" law practice. 

Had I read about this fall five years or more ago, I might have gloated about this story.  I suppose on some sub-conscience level, I am doing that by even writing this post.  Yet I do not harbor any ill will to those at this firm.  I view this matter as a cautionary tale.  Greed can make people take dumb risks and do stupid things.  Greed can cause otherwise rational people to act in the most unexpected irrational ways.  Again, those indicted are innocent until proven guilty.  They may be acquitted.  I am guessing they have stellar legal representation and this case will drag on for months, if not years.  I wonder if I'll remember this story and its cautionary tale when it all ends.  I hope so.

I'll wrap up with the speech the fictional character Gordon Gekko made in the film, Wall Street

"The point is, ladies and gentleman, that greed -- for lack of a better word -- is good.
Greed is right.
Greed works.
Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.
Greed, in all of its forms -- greed for life, for money, for love, knowledge -- has marked the upward surge of mankind.
And greed -- you mark my words -- will not only save Teldar Paper, but that other malfunctioning corporation called the USA."

The fictional character Gordon Gekko, photo credit to, fair use claimed

 There are those who view these words as true.  Others disagree.  One man's greed is another man's noble accomplishment.  However, it's never good for a defendant when a third man calls it greed and he's a prosecutor.  From these stories above it is clear that greed did not save that most mighty and storied law firm  Dewey & LeBoeuf.  A law firm that I would have loved to work for in another time and one that never would have hired me.  For that decision, ladies and gentlemen of the recruiting committee, you have my undying gratitude.

Be well friends,

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