Dewey keeps job cuts in check
Amid the growing frenzy of US associate layoffs that has gathered pace this year, one firm that has so far avoided making cuts on the scale of a White & Case or Latham & Watkins is Dewey & LeBoeuf.
That is not to say it has been left unscathed by the downturn. Earlier this month Dewey announced that it had launched a redundancy consultation in London with the aim of reducing its associate headcount by approximately 15 (TheLawyer. com, 4 March).
According to chairman Steve Davis, the relatively recent fact of the firm’s merger means Dewey is able to avoid major job cuts because it does not have an excessive headcount. Dewey Ballantine and LeBoeuf Lamb Greene & MacRae merged in October 2007.
“Although we did a staff reduction last week, I suspect it was a lot smaller than some other firms of our size have had to do, or will have to do, because we’d already built that in effectively because of the merger,” Davis argues.
In the past 12 months Dewey has announced the closure of five offices. But those closures, says Davis, were pencilled in at the time of the merger.
“We did the office closings as part of what I’d call ‘the merger year’, the ‘integration year’,” explains Davis. “I think that positioned us much better to withstand the current economic and financial crisis than might have been true if we hadn’t gone through that process. In the first year of the merger we had to examine hundreds of issues and policies. Everything was put on the table for review and analysis.”
Davis believes that Dewey’s cost structure is much closer to being right for the ‘new world’ because the firm had to make so many decisions in connection with putting the two firms together.
“That positions us well to deal with the current climate,” he adds.
That platform is now allowing Davis and his partners to look outside Dewey’s US base at opportunities overseas. The firm, at least the legacy LeBoeuf side, has long had an extensive international network. Now the merged firm has around 40 per cent of its lawyer headcount outside the US, which is easily among the highest percentage for US-based firms.
Dewey is currently preparing a launch in Abu Dhabi, but is also considering its options in Western Europe, India and Latin America. Two weeks ago a group of Dewey partners, including Davis, were in São Paulo for a conference on reinsurance that the firm was co-sponsoring. The Brazilian reinsurance market has been open to foreign insurers for just over a year, and for a firm with such an insurance industry focus, a local outpost is a distinct possibility.
“It’s a very important jurisdiction,” agrees Davis. “My view is that as a firm we have to have a strategy for the 15 or so largest economies in the world. And if you were to list those, we probably currently have a physical presence on the ground in two-thirds or more. There are others, such as Japan, where we have no physical presence, but we do have very close relationships with a number of local law firms. That’s what we’ve been discussing in relation to Brazil.”
Dewey has established a Brazil study group headed by London-based partner and Brazilian national Julio Castro, another member of the team who went to São Paulo this month.
The group mirrors those formed by Dewey to come up with strategic proposals for the Middle East (which led to the decision to open in Doha and Abu Dhabi) and India. The India study group was formed last year and is headed by another London-based partner, Arthur Marriott QC.
“We also continue to feel that our presence in East Asia isn’t adequate,” admits Davis. “We’re in Beijing and Hong Kong, but on a collective basis we probably have no more than 25-30 lawyers in the two offices. I’m a big believer in the future of East Asia. We haven’t fully organised this group yet, but we’ve asked people associated with the region to come up with a strategic plan for the area.”
Dewey’s continued push for international ;expansion ;is a reflection of its chairman’s unshaken belief in the global law firm model, despite the current economic and financial turmoil.
“I’m a believer that being a global firm is a source of strength in good times and in bad,” says Davis. “I haven’t seen anything in and of itself to discourage that belief. I mean, if you look at the pure or largely New York or US firms, it’s very hard for me to see that they’re doing better than the global firms.”
That is not to say that Davis does not believe the model is under immense pressure. In his opinion the most profound issue the legal sector is facing is whether the current turbulence is a cyclical downturn or a paradigm shift.
“That to me is the heart of the issue,” Davis states.
The jury is still out on that one, but in the meantime Dewey is doing its best to adapt to the times.
