Dewey's Sharp hits out at stricken firm's US management
28 May 2012 | By Joshua Freedman
Former Dewey & LeBoeuf London managing partner Peter Sharp has claimed that the firm’s New York chiefs “ignored” his plans to save the City office as he moved to refute allegations that he left his former colleagues high and dry.
Sharp, who resigned to join Morgan Lewis & Bockius’s City office at the height of the crisis, has launched an attack on the firm’s US management, following claims that the litigator looked after his own interests and broke a promise to go down with the ship.
“In mid-March I told [staff] I was not about to disappear. The situation changed,” Sharp told The Lawyer in an interview published today.
“There’s so much to this. We got to a point by mid-April where it became impossible to hold together any sort of London practice at Dewey & LeBoeuf. I’d also put a proposal to New York to try and hold together a team - I surveyed the office and put forward what I thought was possible, how that could be a viable practice. It was completely ignored.”
Sharp has become a villain among much of Dewey’s remaining staff, with four sources claiming that well before he left he went round vowing not to jump ship as hordes of partners globally were leaving.
A current Dewey associate said: “Peter had met with each of the floors in the building and his message was, there’s a rumour going round that I may be leaving, and I can tell you that that’s not going to happen. [He said] you will not see that headline. Of all the parallels with Captain Schettino […] He fell into the lifeboat, and he’s leading the rescue from the shore.”
But Sharp claimed that a meeting with partners on 20 April, when a number of them told him they were leaving, meant that the situation was no longer salvagable.
“That’s the point when I decided the only constructive thing I could do was try and find a safe home for as many people as possible,” he said.
“You have to make an on-the-spot decision. By that point it became clear to me that the firm was doomed. Everyone who made London what it was was planning to leave immediately.”
Sharp, who quit on 3 May, also blamed the situation on the significant financial pressure partners were under, with some London partners understood to have been forced into selling their houses to pay their tax bills following months of reduced pay.
He added: “Meanwhile, the bank that provided capital loans had notified us that no future facilities would be made available to Dewey partners.”
Today’s feature also reveals that two senior Dewey partners clinched a $3m (£1.9m) bonus on top of their $2.5m fixed profit share cap when the firm renegotiated its controversial guarantee packages in March this year. One star lawyer on $6.4m ended up with a $6.9m deal following the negotiations, despite an apparent intention to limit the widely-criticised scheme of guaranteeing pay to certain partners.
Meanwhile, remaining London staff are being left in the dark over the firm’s plans, with one current staff member telling The Lawyer that no communication has reached them about their situation as the UK LLP verges on administration.
Despite a source telling The Lawyer last week that staff had been told this was their last week, it has emerged that this only applies to those whose close contacts with partners meant they were well-informed. Nothing official had been sent out to staff at the time of writing.
Dewey called a meeting for partners and former partners who had left recently last Wednesday (22 May) to discuss the latest situation, with the UK LLP expected to have gone into administration last Friday (24 May) (22 May 2012).
A current Dewey employee told The Lawyer: “It’s a horrible time. It’s heartbreaking. I’ve been here a long time. It’s like a family here. It’s hard, to see so many people strewn across the City. It’s heartbreaking.”