Jurors and others unconvinced Dewey & LeBoeuf management was a crime
After four months of trial and more than three weeks of jury deliberation, a fraud and larceny trial against three former leaders of a shuttered BigLaw firm ended badly Monday from the prosecution’s standpoint—not a single conviction on any of the approximately 100 counts collectively faced by the Dewey & LeBoeuf trio.
While it’s easy to point fingers after the fact, observers question the wisdom of pursuing such a complex case concerning Dewey accounting practices that didn’t appear to be clearly criminal and some jurors told the media they had been overwhelmed in detail.
“It’s unclear the alleged wrongdoing was even illegal,” columnist Reynolds Holding wrote in an opinion piece for Reuters’ Breakingviews blog. “Backdating checks, counting partner contributions as revenue and other shenanigans may cross the line but don’t stray far from typical number-crunching methodologies. Few rules govern law-firm accounting, and criminal charges of breaking them look like overkill.”
Meanwhile, it was a challenge for the prosecution to translate a deluge of business documents into a compelling narrative, law professor Alafair Burke of Hofstra University told the New York Times’ DealBook blog (reg. req.). As a trial concludes, jurors must feel “at a gut level that a crime was committed, not just a shady business practice,” she said.
Testimony by seven lower-level Dewey workers who previously took pleas was persuasive to some jurors, the Wall Street Journal (sub. req.) said.
But juror Edith Hines, a 64-year-old retired state worker, said she didn’t see a scam. “I see a law firm that folded over and made a whole lot of mistakes. I don’t see a crime in those mistakes.”
The case focused on what happened near the end, as Dewey was about to implode after a global financial downturn and a series of management decisions that, in retrospect, were not successful, said Richard Rosenbaum in a video interview earlier this month with Bloomberg BNA’s Big Law Business blog. Rosenbaum is CEO of Greenberg Traurig.
But before that, the defendants—former chairman Steven Davis, executive director Stephen DiCarmine and chief financial officer Joel Sanders—were seemingly running Dewey in much the same manner as counterparts at other BigLaw firms, according to Rosenbaum.
“I don’t know if those people did bad acts, let alone criminal acts,” he said.
Building bigger firms through mergers, measuring success by growth and rising partner profits, taking on a substantial debtload and making hefty multi-year payment guarantees to individual partners may not be good management practices but were and remain commonplace, he said.
“All of the things that are being alleged … you see today some firms doing the same thing,” he stated, citing an emphasis on money and growth for its own sake, rather than a shared law firm culture. “Believe me, if Dewey did 10 things wrong—and I’m not talking about criminal things, I’m talking about their basic business model—if they did 10 things wrong, there are plenty of firms today doing eight of them.”
The three defendants were acquitted on some charges before a jury deadlock resulted in a mistrial Monday and hence can’t be retried on those counts. It isn’t clear whether the Manhattan district attorney’s office will pursue a second trial concerning the counts on which the jury deadlocked.
Related coverage:
ABA Journal: “How Dewey management’s rosy picture masked an ugly truth”
ABAJournal.com: “Without calling any witnesses, defense plans to rest in case against former Dewey & LeBoeuf leaders”
ABAJournal.com: “Dewey prosecution was based on ‘fantasy fraud,’ lawyer says in closing argument”
Big Law Business (Bloomberg/BNA): “Are the Dewey Defendants Guilty? Who Cares?”
