Interview with Steve Davis, Chairman of Dewey & LeBoeuf: It's All in the Feeling
According to Steve Davis, it all went pretty smoothly and quickly: negotiations in July and August, a preliminary agreement the last week of August, votes last Wednesday, September 26, and on Monday of this week, he became chairman of Dewey & LeBoeuf, the newest megafirm in the global law firm firmament, with 1300 lawyers, 26 offices in 12 countries, and a billion dollars in revenue.
So what accounts for this dramatically better outcome, compared to the Dewey/Orrick debacle-in-the-making that first hit the press last year this time?
For starters, Davis credits the two firms’ long-standing familiarity with each other. No East Coast/West Coast mystique to decipher and reconcile in this case: the two firms were only two floors apart at 140 Broadway for years and had dealt with each other on myriad matters. With good relationships long established, people at both firms, Davis contends, “quickly understood the underlying strategic rationale” for a combination.
Davis also believes Dewey & LeBoeuf enjoys another advantage that other recent megamergers did not. Both Dewey and LeBoeuf had high concentrations of lawyers in the same key markets—New York, London and Washington D.C. That’s an advantage? The beauty of the Dewey/Orrick merger was thought to have been little overlap, promising to produce that far-flung “globalness” instantly. Overlap, Davis contends, works in the firm’s favor. Unlike the “Noah’s Ark” that some combinations are left with—two of everything, with 1 in LA and 1 in Boston--Dewey & LeBoeuf’s geography is more likely to force the people and cultures at each key location to mesh.
D&L's executive committee of 22 is composed of 11 partners from each firm, and includes Morton Pierce, Dewey’s Managing Partner, with Davis in the chairman’s seat. After the Dewey/Orrick talks failed, Pierce’s management style was the subject of some bruising commentary, with particular notice given to the fact that he billed 3300 hours that year. See our February 7, 2007 entry “Talking to the Troops.”
So what will management at Dewey & LeBoeuf be like? Davis is often described as managing “like a CEO,” a role which, perhaps in a reflection on the famous independence of lawyers, one LeBoeuf partner characterized as an “elected dictator.”
Davis points to firms like Linklaters, highlighted in a recent American Lawyer article on Magic Circle firms, as being notably well-run while also decidedly not a democracy. “What other billion dollar business is run like a democracy?” he asks.
Once the chair of LeBoeuf’s prized energy department, Davis cut his client time in half when he became LeBoeuf’s co-chairman in 1999. After becoming chairman in 2004, Davis devoted full-time to management. “That is a fundamental difference,” he acknowledges, between LeBoeuf’s management philosophy and Dewey’s, which he diplomatically declines to characterize as either “right or wrong.”
The full-time focus is conscious and necessary, Davis says, to effectively manage firms as large and complex as his, which are presented with issues, at least in terms of proportion, that a firm like Cravath, with 95% of its lawyers in one office, is not.
Davis anticipates that he will be the only full-time manager at D&L. "At LeBoeuf, we moved away from partners doing administration," Davis says, finding that keeping partners focused on clients while relying on professional administrators, often with law degrees, made for better results.
Whatever discussion there may be about style, one thing you can’t quarrel with is Davis’s results. In the five years from 2001 –2006, LeBoeuf’s profits per partner doubled amid an influx of star talent.
One result of that influx was that by 2006, a fifth of LeBoeuf’s equity partners had been at the firm less than two years. What has Davis learned about integrating laterals that may help now in his efforts to integrate the two cultures and their lawyers? “Treat people with respect and dignity, which often means really listening to them, giving them a fair hearing even if you don’t decide in the end to do what they want.”
What are his biggest challenges ahead? Organizationally, Davis is working on the firm’s practice structure and plotting future growth. Now the 5th largest firm in NY, D&L has 550 lawyers in NYC and 180 in London, making it also the 5th largest firm in London. Davis intends to grow that London office, where he sees the greatest potential payoff, anticipating soon spending two weeks a month there.
But his biggest challenge is, he says, an old one: how to give people in the firm a sense of ownership. “Law firms are pure personal services organizations-- it’s all about people and motivating them, so that they feel that they matter, because they do.” And his concern is that the bigger the firm, the harder that may be to do.
An article by Lucy Kellaway entitled "Just Say No to the New Managerial Cult of Yes" in the July 23, 2007 Financial Times pointed out that a lot of the job of management involves saying “no,” but the critical part, according to Davis, is "saying 'no' in a way that respects people’s dignity. How the person feels when they walk away is what’s important.”
And Davis admits he’s not immune to needing some reinforcement himself. A recent talk he gave to the Boston office produced an email from a college intern that he returns to when he could use a boost: “I have a very important job—it’s the only job I have, and you made me feel appreciated.”
Any question that Steve Davis is one of the more enlightened of the law firmus managementus species? No question.
