The law firm of Dewey & LeBoeuf LLP is doing everything it can to keep what is left of its employees from leaving as it winds down operations. In fact, the firm is turning to cash to make sure that the final 52 employees stay with the firm until operations finally cease. The firm wants to give the 52 employees bonuses of $700,000 to reward them for their loyalty and their efforts.
Dewey witnessed one of the largest exoduses of attorneys and staff members in the history of the legal industry before it collapsed. The firm claims that it has whittled its staff down to a ‘minimum core’ group of employees prior to the firm filing for bankruptcy protection at the end of May. From that point to now more employees were either terminated or resigned from their positions. Now, the firm claims that it cannot afford to lose any more employees until operations end completely. Because of this, the law firm said it needs to pay retention and incentive bonuses to the remaining employees. The remaining employees work in information technology, collections, billing and human resources for the firm.
“The employees are integral to the efficient and expeditious wind down of the debtor’s affairs,” Dewey said in court papers filed on Tuesday. “Without the continued commitment of these employees, the debtor’s ability to complete an orderly liquidation and to make a meaningful distribution to creditors would be severely compromised.”
Dewey wants to pay a max of $450,000 in retention bonuses to all of the rank-and-file employees still with the firm. The firm did say that the amount each individual employee receives will be based on the actual date that the employee leaves the firm. Dewey said the plan is for employees to remain through August 31 at the earliest and November 30 at the latest.
Five of the employees could receive more than the $450,000 in an incentive plan based on the firm being able to collect money on client bills. Those five employees include Dewey’s director of billing and collections manager. The firm is owed at least $217 million in outstanding legal fees as of the bankruptcy filing. The incentives will end at $250,000 and will be paid out of the fees Dewey’s collection agent makes and it will fluctuate depending on how much the firm collects from the unpaid legal bills.
There are four senior managers still at the firm and they include executive partner Stephen J. Horvath and general counsel Janis M. Meyer. The four senior managers are not eligible for the retention or incentive bonuses. The request by Dewey will be heard by Judge Martin Glenn from the U.S. Bankruptcy Court in Manhattan on July 25.