Troubled Law Firms

Marc Dreier, litigator, founder and managing partner of a prominent law firm, Dreier LLP, was arrested on fraud charges for allegedly swindling two top hedge funds of what a U.S. prosecutor now estimates to be $380 million. Prosecutor Jonathan Streeter called Dreier a "Houdini of impersonation." Firm attorneys said in court papers that Dreier spent as much as $40 million on artwork to decorate Dreier LLP’s offices in New York and five other cities. In light of these news, "the court-appointed receiver, Mark Pomerantz, a partner with Paul Weiss Rifkind Wharton & Garrison LLP, warned remaining attorneys not to expect any more paychecks." This began the collapse of the once lucrative practice and forced majority of the lawyers to move on.

New York Times reported that people left at the firm have said that the firm "could not make its payroll, the Christmas party at the Waldorf-Astoria was canceled and the firm lacked the ability to pay the rent at its Park Avenue offices."

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Philadelphia-based law firm, Wolf Block LLP, has reportedly let go 15 associates and staff members last week. The layoffs were first reported by an online blog Above the Law. According to Above the Law, the reductions were based on firm finances and not performance.