The New Yorker has a juicy look at the
massive collapseof the once-great law firm Dewey & LeBoeuf that portrays the former chairman Steven Davis as a deeply tragic figure.
Dewey ousted Davis in the spring of 2012 after the Manhattan district attorney began investigating him for fraud. Davis then got skewered in the press for giving massive salaries to a few star lawyers and allegedly lying about about the financial state of the firm.
It was Davis’ own colleagues who turned him in to the DA, James Stewart writes in his analysis of Dewey’s self-destruction. A source at Dewey told the legal industry publication Law360 that a group of partners at the firm asked the DA to bring criminal charges against him for embezzlement, wire fraud, and other alleged crimes.
That source, who was likely a partner at the firm, told Law360 that Davis was a “sinister character” who was “running the firm like the mafia.”
Dewey suffered after the recession of 2008 as did other law firms. But it may have suffered more because it promised star partners huge compensation packages even with declining profits. In 2010, Davis and other partners lied to the American Lawyer Magazine about its revenue — a decision “justified as a marketing effort,” Stewart writes.
Davis seemed extremely devoted to the firm despite those missteps. He’d cut his own salary so it was the same as the lowest-paid partner in good standing, according to Stewart. He personally borrowed $US1.8 million to support the firm. In April, Davis agreed to pay more than half a million dollars to settle allegations that his shoddy management caused Dewey to collapse.
He has not worked since Dewey ousted him, and he had surgery for prostate cancer last year. “The firm failed,” Davis told Stewart. “But it didn’t fail for want of me trying.”
Both Davis’ supporters and detractors have described him as an “affable, low-key leader” whose vision helped make Dewey the huge successful firm it once was, The New York Times’ Peter Lattman has reported. He’s also been praised for taking a courageous step in his personal life. In 2001 he separated from his wife of 24 years and came out as gay.
“Steve dealt with this part of his personal life with grace and courage,” his Yale Law classmate Tom Bernstein told Lattman. “I’ve known him for over 40 years, and to me, he’s the same Steve Davis.”
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.