Dewey & LeBoeuf has overhauled its leadership, faced with deepening financial troubles that are prompting partners to defect en masse.  The troubled New York law firm had no choice but to take drastic action. Change #1. Chairman Steven Davis was stripped of his title, is relocating to London, and will join 4 other lawyers in an "office of the chairman." There will be 5 co-equal members representing the heads of the firm’s most profitable practice areas. This new chairman’s office will be responsible for “carrying out the firm’s strategy to restructure its organization and concentrate on our core strengths.”  In addition to Mr. Davis, the following 4 partners will join the office:

• Martin Bienenstock, head of the firm’s restructuring group.
• Richard Shutran, head of the firm’s corporate practice.
• Jeffrey Kessler, head of litigation.
• Charles Landgraf, managing partner of the Washington office.

Noticably absent from the “office of the chairman” are Dewey’s 2 vice chairman and longtime top producers - M&A partner Morton Pierce, and securities lawyer Ralph Ferrara, who's based in Washington. Change #2. Corporate partner Stephen Horvath III, who's based in London, was named as the firm's Executive Partner, a new position that will have control of day-to-day management of the firm.  In that post, he effectively replaces Stephen DiCarmine, a non-practicing lawyer who has served in that role.  Mr. DiCarmine will remain at the firm and report to Mr. Horvath. "An overwhelming consensus" favored the changes, according to an internal memo.  However, the changes won't be official until voted on by the entire partnership. While business reportedly has picked up during Q1 of 2012, and revenue is up nearly 30% over the same period last year, significant balance-sheet issues remain.  To address these issues, the firm us renegotiating lines of credit with bank lenders, and taking measures to deal with a $125 million bond issue, raised in 2010, that will begin to mature in 2013. Other Issues to be Addressed. Having lost 37 of its 300 partners since January, the firm should probably plan on further defections, although that's not a certainty.  The firm also must address, where possible, the factors that led to its disappointing 2011 financial results.  The shortfall in earnings prevented the firm from being able to meet tens of millions in salary guarantees that had been extended to many of its star lawyers.  Perhaps the biggest casualty of this problem was the loss of 18 partners from Dewey’s insurance group - one of its most respected practice areas. For additional details:  [Dealbook, 3/27/12].