In 2012 we looked at how a bad judgment and a toxic, dysfunctional culture killed off the 113-year-old premier law firm of Dewey & LeBoeuf.

But having read the latest I have to revise what I said.

In addition to bad judgment, think gross stupidity.

I suppose I should say “alleged,” but the evidence leaves little doubt regarding just how stupid these bosses were.

Consider the smoking emails between Steven Davis, Dewey’s former chairman; Stephen DiCarmine, the firm’s former executive director; Joel Sanders, the former chief financial officer; and Zachary Warren, a former client relations manager.

Four men, who were charged by New York prosecutors on Thursday with orchestrating a nearly four-year scheme to manipulate the firm’s books to keep it afloat during the financial crisis, talked openly in emails about “fake income,” “accounting tricks” and their ability to fool the firm’s “clueless auditor,” the prosecutors said.  (…) One of the men even used the phrase “cooking the books” to describe what they were doing to mislead the firm’s lenders and creditors in setting the stage for a $150 million debt offering…  

And ignorance isn’t a viable excuse for lawyers by any stretch of the imagination.

The global number one rule in our post-Enron world is that you do not write anything in emails that you wouldn’t want to see on the front page of your newspaper.

In case you aren’t familiar with them, the Darwin Awards “are cautionary tales about people who kill themselves in really stupid ways, and in doing so, significantly improve the gene pool by eliminating themselves from the human race.”

Perhaps there should be a special award for people who kill companies through acts of excessive stupidity.

Image credit: Tombstone Generator

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

What do Wal-Mart, Dewey & LeBoeuf and NewsCorp have in common?

Cultural deficiencies manifested in bad judgment, lies and executive shilly-shallying.

What was not previously known until the Times report on the bribery scandal is that at about the same time Mr Scott began the offensive to improve Wal-Mart’s image in the United States, he also rebuked the company’s internal bribery investigation in Mexico for being overly aggressive. The investigation was soon dropped. (Wal-Mart)

“The [compensation] guarantees were extremely corrosive culturally because they were divorced from individual or firm performance, which shatters the whole notion of a partnership,” Mr. MacEwen said. “And they were promiscuously awarded.” (Dewey)

The negotiations were so tightly held that only Mr. Crone, Mr. Myler and Mr. Murdoch knew about them, said two company officials. The officials said that even employees who were typically involved in legal decisions did not learn of the settlement until it leaked in a newspaper. (News Corp)

What does Google have in common with them?

Cultural deficiencies manifested in bad judgment, lies and executive shilly-shallying.

The report, which was first published in its unredacted form by The Los Angeles Times, also states that the engineer, who began the project as part of his “20 percent” time that Google gives employees to do work on their own initiative, “specifically told two engineers working on the project, including a senior manager, about collecting payload data.” (Google)

I guess that question is answered now.

But I have to say, I find it sad to see Google all grown up and playing in the same class as Wal-Mart, Dewey and News Corp; I honestly thought they were better than that.

Flickr image credit: Djenan Kozic