New York employees of beleaguered Dewey & LeBoeuf collected their belongings on May 11 and said goodbye to colleagues on their last day after the firm laid off scores of non-attorney personnel.
Some staffers described the mood in Dewey's offices as somber and like a "funeral." Others expressed anger at firm management, blaming them for orchestrating what is shaping up as the largest law firm failure in history.
"People have been thrown under the bus," a woman who described herself as a Dewey staff member said outside the firm's Avenue of the Americas offices but declined to be identified. "It's very sad." Lawyers and staff "are bursting into tears," she added.
Meanwhile, the firm's downward spiral continued with the announcement that Martin Bienenstock, a Dewey partner in the office of the chairman, was joining Proskauer Rose as a partner in the corporate restructuring and governance practice. Five partners said they would follow Bienenstock to Proskauer.
Two other members of the chairman's office, Richard Shutran and Jeffrey Kessler, also announced last week that they were leaving.
By late afternoon May 11, only one partner in the chairman's office had not announced his departure: L. Charles Landgraf, managing partner of the Washington, D.C., office and chair of its legislative and public policy practice.
Dewey sent employees a notice on May 4 that their jobs could be terminated. Last week, the firm confirmed to many associates and staff members that they were being laid off ... . May 11 would be the last day for many non-legal staff, while some associates were told their last day would be tomorrow.
The timing of the notice has prompted an employee lawsuit ... . The suit, filed on May 10, claims the firm failed to provide enough advance notice for the terminations, as required by federal and state Worker Adjustment and Restraining Notification Act (WARN) laws. The suit is seeking class certification.
At least 450 employees are members of the proposed class, which includes associates and staff in the firm's New York office, said Rene Roupinian, a partner at Outten & Golden who filed the action along with Jack Raisner. However, she said that most members of the class are non-legal staff.
Vittoria Conn, 55, the named plaintiff in the suit, said in an interview that the firm is not providing severance pay. Employees' last pay check will only include the final weeks of pay and unused vacation time, she said.
"We're landing completely without a cushion," said Conn, a document specialist who has worked at Dewey for more than 12 years. "As an employee, what I need now is what the law provides."
"I'm pay check to pay check, like so many other people," she said. "I get one more pay check, and then what? I won't make rent next month."
She said employees were put in a tough position of seeing news and blog reports, without any internal communication by the firm.
"For two to three months we've been wondering who do we listen to? Do we get our truth from blogs, from newspapers," she said. "Or do we get our truth from internal communications, which were all sunshiny and optimistic. You can't really make a decision on your future with conflicts like that. You don't really know."
Employees interviewed outside Dewey's offices on May 11 described similar financial straits [ ... ]. Three said they believe most people in the New York office have not found new jobs.
"I'm scared to death," said one, who worked in the firm's IT department and who would only provide her first name, Karen. "I don't know if I'm going to lose my home. I can't believe this is happening."
Another who declined to be identified said lawyers "have not been active" in bringing staff with them to new firms. But she said she had seen partners cry about the firm's deteriorating circumstances.
Employees described an office scene in which records were in boxes, furniture had been removed while fax machines and firm services, such as the cafeteria and mail room, were not functioning.
"It's disgusting. There are thousands of boxes. It's pandemonium," said the woman who declined to be identified of conditions at the firm's midtown offices, which take up several floors at 1301 Avenue of the Americas.
Not all employees were leaving. Staff members said a skeleton crew would remain to help clean up and collect supplies.
Conn's lawsuit, filed in the U.S. District Court for the Southern District of New York, seeks to recover at least 60 days of wages and benefits, under the federal law. The firm has not responded to requests for comment on the layoffs or the lawsuit. Conn v. Dewey & LeBoeuf, 12 cv 3732, has been assigned to Judge Laura Taylor Swain * * * .
Resolution of the lawsuit likely would turn on whether the circumstances of the layoffs trigger narrowly drawn exceptions to otherwise required notice. Among those circumstances might be the unexpected loss of a major contract or an unanticipated dramatic economic downturn.
"We feel strongly that the firm is liable and responsible for these wages and benefits," said Roupinian, who estimated that the collective total of wages and benefits owed would run into the millions of dollars.
By late May 11, the firm had not announced a dissolution vote or a bankruptcy filing, but Roupinian said wages and benefits are priority claims under the Bankruptcy Code.
"We do have a priority claim if the company files for bankruptcy," she said. "Among the unsecured creditors, the employees would be at the top of the list."
However, secured creditors, including lenders owed money by the firm, would come first.