US firm Dewey & LeBoeuf has told RollOnFriday that discussions with its bankers "are proceeding as expected", as rumours circulate that its enormous debt might be called in.

The firm's financial woes are well known on both sides of the Atlantic. Despite having plenty of work (an internal memo sent to partners on Monday claimed that revenues for January and February were up 28% on the same period last year), the firm has to service debt running into nine figures. $125m of this is a bond issue which it raised in 2010 and matures next year. But it also has a line of credit from its bankers, and sources have told RollOnFriday that could be withdrawn in just two weeks.

Getting bills paid is the bane of many firms in this market, as clients sit on invoices until the last possible minute. And whilst Dewey's lawyers may be busy, they're clearly not collecting enough to keep all their partners happy. 37 partners have left since the start of the year: that's 12% of the entire partnership. This week a coup d’état was launched. The firm's remaining partners will vote on appointing a new Executive Partner, moving the current Chairman to London and sharing his role with a further four partners. And presumably on sending the bailiffs round to their clients.

    That'll cover the first amends to your side letter

Whether this will be enough to appease the firm's bankers remains to be seen. Watch this space.

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Anonymous 30 March 12 09:59

Deweys is toast. big debt, poor collections, finances up the creek; palace coup with junta taking over, head in the sand "all is fine we have lots of work" then bang - one ex law firm.