Reuters: Financial Services and Real Estate: UPDATE 1-Law firm Dewey & LeBoeuf loses 5 more partners

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UPDATE 1-Law firm Dewey & LeBoeuf loses 5 more partners May 3rd 2012, 00:51 Wed May 2, 2012 8:51pm EDT * Partners go to Jones Day, Vinson & Elkins * Partners told to send out bills to get paid By Nate Raymond and Nick Brown May 2 (Reuters) - Five more partners have left Dewey & LeBoeuf, the struggling U.S. law firm coping with partner defections, high debt and a criminal investigation of its former chairman. The latest defections include Ira White, co-chair of Dewey's private equity practice. Jones Day announced on Wednesday it hired White for its New York office. Separately, at least four other partners left Dewey's London office for outfits including Vinson & Elkins and KPMG. Angelo Kakolyris, a spokesman for Dewey, declined to comment. White did not respond to a request for comment. Dewey has lost more than 90 of its 300 partners since the beginning of the year. The latest departures came two days after Dewey & LeBoeuf distributed a memo to partners in which they were "encouraged" to find new jobs. Ed Morrison, a bankruptcy professor at Columbia Law School, likened the memo to "putting employees on life boats." "You don't put people on life boats unless you think the ship is sinking," Morrison said. Partners were told to send out all of their bills to clients in order to receive their monthly draws from earnings due to be paid Thursday, according to a current partner, who spoke on condition of anonymity because he was not authorized to speak publicly about the matter. BANK NEGOTIATIONS The condition followed negotiations with a bank group led by JPMorgan Chase & Co over an extension of a $100 million credit line, on which Dewey had drawn down $75 million. The banks on Monday granted Dewey a two-week extension on a deadline to avoid defaulting on the loans. In London, Dewey leaders are considering putting the British office into an insolvency proceeding under British law, a person close to the discussions said. The discussions were described as preliminary. Amid these talks, Dewey removed the names of four partners in London from its website between Tuesday and Wednesday. Those included Nabil Khodadad, who co-headed Dewey's project finance and infrastructure practice. Khodadad confirmed on Wednesday that he had joined Vinson & Elkins. Khodadad, who declined further comment, was joined by Andrew Neiland, a "local," or non-equity, partner in Dewey's London office. Another London lawyer, Julio Castro, became the third Dewey tax partner to join accounting firm KPMG. Castro left Dewey on April 27, according to Dewey spokesman Duncan Miller. Dewey also removed corporate partner Stephen Walters from its website. Miller said he could not confirm the departure. Walters did not respond to requests for comment. Link this Share this Digg this Email Reprints

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