Dewey & LeBoeuf is a law firm; it was born in 1909 and is dying in 2012.
Its death is the result of a culture in which money replaced values—
“Because the partnership lacks any shared cultural values or history, money becomes the core value holding the firm together,” said William Henderson, a law professor at Indiana University who studies law firms. “Money is weak glue.”
and a toxic star system.
Even as Dewey’s performance flagged, the firm doled out lavish multiyear, multimillion-dollar guarantees to its top partners and star recruits. The guarantees — there were about 100, with several over $5 million a year — created compensation obligations that the firm could not meet.
Of course, they aren’t the only law firm or other type of business to founder and sink on the rocks of unfettered growth, mergers, aggressive hiring, outsize pay packages and compensation disparity that creates an internal us vs. them mentality.
In short, 103 years down the drain.
The Dewey & LeBoeuf failure provides glaring proof of the importance of a strong shared-values culture and testimony to the mantra I evangelize—people who join for money (or perks or stock) will leave for more money (or perks or stock).
Image credit: Tombstone Generator