Once again, it is confirmed that law practice is a business. As I’ve been saying since I received the registered mark for The Business of Law®, law practice is a business. Yes, it’s a profession AND also a business, a service business. Dewey & LeBoeuf confirms this.
This large, national law firm has just retained outside bankruptcy counsel. Why? To consider whether they can create a controlled bankruptcy … filing a bankruptcy application with creditors and potential acquirer already in place. The beauty of such a filing is that it will i) stop the bleeding of lawyers leaving the firm a few at a time, ii) eliminate the unfunded pensions that would be a drain on the firm assets and future revenue, and iii) enable another firm to complete an outstanding acquisition quickly with a clean balance sheet and revenue stream intact. A side benefit of eliminating the unfunded pension obligations would be to avoid generation warfare that frequently arises between retiring partners and younger partners left with the responsibility of using current revenue to pay for the old debt.
This process is precisely the same process used by so many other companies, including some of the large companies in the recent financial crises that survived, but in different configurations. This is the same process as the airlines are implementing today … to reduce their obligations to labor. This is the same process being contemplated by a number of prominent government entities (cities and counties) to get rid of their unfunded pension obligations that are expected to require more than 60% of their current tax revenues.
So what is different about Dewey? Nothing. We are in the world of business, The Business of Law®.