Do Some Law Firms Need AFAs From Lenders?

Peter Lattman of the New York Times continues that paper’s excellent coverage of the corporate legal space. Here’s a headline from last night, and the subject is Dewey & LeBoeuf:

(Click on the image to see the article, but please come back…)

Mr. Lattman details the ongoing travails of that firm, and even quotes the expert and always engaging Bruce MacEwen of Adam Smith, Esq. According to the Times, Dewey is allegedly in negotiations with its lenders over compliance with loan covenants due to partner departures.

In this case, AFA refers to Alternative Financing Arrangements, and Dewey may need some soon. Hopefully this can work out, and Dewey can recede a bit from such a prominent position in the press. When one of your banks is forced to put out a statement like this, it’s obvious you’re in a tough spot:

“Dewey & LeBoeuf is a client in good standing with Citi Private Bank,” said Dan Di Pietro, the chairman of the law firm group at Citi Private Bank. “Citi has had a banking relationship with the firm dating back to the early 1970s and continues to provide banking services to a significant percentage of the partners and associates.”

One part of this article really caught my eye, however. It was a statement about how much of the firm’s rebound strategy relies on certain key partners:

Among the so-called rainmakers who are crucial to the firm’s survival, these people say, are Jeffrey L. Kessler, the head of the litigation department and a prominent sports lawyer; Richard E. Climan, a Silicon Valley mergers and acquisitions lawyer; Berge Setrakian, a corporate lawyer with a large international practice; and Martin J. Bienenstock, a bankruptcy partner.

See if you can find the rainmaker here:

I highlighted “rainmakers” because I think that term is becoming outdated. We all know what it has meant historically. But the relationship between law firms and key clients is no longer what it was and is changing rapidly.

Next week, I will outline some reasons why law firms should think carefully about marketing their “rainmakers” as such, and then expand upon what that term has come to mean to many clients.