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BY PHILIP SLAYTON LEGAL ETHICS A classic morality tale The aftermath of Dewey & LeBoeuf's demise has lessons for lawyers and law firms everywhere. other firms (more than 100 partners, out of 300, had "special deals"). To pay for these commitments, the firm bor- rowed extensively from its bankers and issued bonds in a private placement, but it quickly became apparent that, even with massive borrowing, the com- mitments could not be met. IOUs were issued to partners; such loyalty to the firm as there was disappeared; partners started leaving for what they thought were greener pastures; the trickle of departures turned into a flood; soon the Dewey doors were shuttered for good. The partners who fled left behind more than $300 million of debt, and about the same amount of accounts receivable and work in progress. (The popular wisdom is that much of what is owed to Dewey is not collectable in the circumstances. Dewey bonds are trading somewhere around 50 cents on the dollar.) Now we have a stinking brew of bit- of untrammeled greed and hubris. One of the United States' premier law firms, with more than 1,000 lawyers, offices around the world, and an exception- al portfolio of blue-chip clients (e.g., Lloyd's of London, Allstate Corp., NFL Players Association, and eBay Inc.), T he bankruptcy of Dewey & LeBoeuf LLP is a clas- sic morality tale. It dem- onstrates in dramatic fashion the consequences suddenly collapsed into ruins, driven to disaster by huge unpayable debts incurred to pay absurd sums to so- called "star" partners. Legal through the Dewey debris for some time, piecing together the details of what happened, but the story's gen- eral outlines are already well known. Multi-year, multimillion-dollar com- mitments were made to select rainmak- ers, many of them lateral hires from commentators will pick 16 A U GUST 2012 www.CANADIAN Lawyermag.com terness, recrimination, and anger that likely will last for years. Already some former Dewey partners are suing the firm and each other. Henry Bunsow, a former partner in its San Francisco office and a 2011 lateral hire, is suing several of his ex-partners for fraud, negligent misrepresentation, of fiduciary duties, and unjust enrich- ment. Bunsow alleges that firm leaders lied about the state of the firm's finances and ran what was, in effect, a Ponzi scheme. Morton Pierce, a former vice chairman of the firm, has claimed it breach Mick coulas