23 Jun 2015

Dewey former rainmaker testifies on shock at 50pc pay cut

A securities specialist has told a New York court about the tense atmosphere of a meeting in which 17 of Dewey LeBoeuf's rainmakers were told their pay was being halved as a way of keeping the firm afloat in 2012.

Ralph Ferrara was giving evidence at the Manhattan Criminal Court at the criminal financial fraud trial of three senior former executives. The meeting took place in February 2012 and the 1,000-lawyer firm went bankrupt three months later. 

Keeping going

Most of the 17 did agree with the reasoning behind the cut, feeling that it was needed in order to keep the practice going 'right to the end', Mr Ferrara said. He was earning about $5m a year at the firm. He now works at Proskauer Rose.

Other pay arrangements

The 17 partners were particularly taken aback when the news was broken to them as about 100 other partners had been receiving income without it being pegged to the firm's results. 

The three men on trial - former chair Steven Davis, former chief financial officer Joel Sanders and former executive director Stephen DiCarmine - say that they have not done anything wrong. The trial is expected to last six months. Source: ABA