Dewey holds back profits to create 'cash cushion'

Partners at Dewey & LeBoeuf have not received their monthly distributions since August due to pressures bought on by the global economic downturn.

Dewey's executive committee took the decision to hold on to the monthly share of annual profits in order to bulk up the firm's cash reserve.

Partners at the firm are understood to be receiving their monthly fixed payments as per normal.

However, it is expected that the distribution will be made as usual this month after a strong showing in October.

Firm managing partner Steve Davis (pictured) told Legal Week: "We have decided to build up a significant cash cushion. As the global economy remains full of uncertainty, we feel it would be imprudent not to do so. The partnership fully understands and supports this.

Before their 2007 merger, Dewey Ballantine operated a quarterly distribution, while LeBoeuf Lamb Greene & MacRae handed out 10 payments a year.

Davis added: "October was actually a very strong month for the firm, and distributions will resume this month. We constantly monitor the situation as part of our responsibility to all of our global partnership."

"Having a cautious approach to financial management in such times is imperative for a responsible global partnership."

The news comes after last week Legal Week revealed that Eversheds had suspended two quarterly profit distributions to partners.

The profit distributions have been delayed in a move that will see all equity partners miss out on two quarterly payments due in November and February 2009.

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