By Terry Baynes and Leigh Jones
NEW YORK (Reuters) - Twelve partners from Dewey & LeBoeuf's insurance transactional team have left for Willkie Farr & Gallagher, the latest set of departures for the troubled law firm.
The loss guts Dewey's transactional and regulatory insurance group, one of the firm's key practice areas. Dewey has lost 19 other partners since the beginning of the year.
Partners Alexander Dye, Michael Groll, Robert Rachofsky and John Schwolsky led the team of attorneys jumping ship.
They joined Willkie on Saturday, firm spokeswoman Antoinette McGovern said in an email. "We have worked closely with this team in a number of transactions over the years," Willkie's co-chairman Thomas Cerabino said in a statement.
The departures were the latest setback for Dewey, which has suffered thinning attorney ranks and reports of financial woes.
Created in 2007 through the merger of Dewey Ballantine and LeBoeuf, Lamb, Greene & MacRae, the firm has about 1,000 attorneys in 25 locations. The insurance group originally came from LeBoeuf, Lamb.
Dewey's largest offices are in New York, London, and Washington.
Other partners who have left this year include leveraged-finance attorney John Cobb, who became a partner in the capital markets practice at Weil, Gotshal & Manges in New York.
Earlier this month, Dewey chairman Steven Davis said internally that the firm was cutting its attorney ranks by 5 percent, as first reported by law blog Above the Law.
The New York Times cited anonymous sources this week who said the firm is deferring tens of millions of dollars in payments to partners and reducing compensation to others. The moves stem from a financial shortfall after promising lucrative pay guarantees to new recruits, the report said.
Angelo Kakolyris, a spokesman for Dewey, said most of the recent departures were part of the firm's initiative to improve its performance.
"The firm is undertaking a number of measures to increase profitability," he said. "The firm is managing itself prudently."
Kakolyris said the insurance group's departure would reduce the firm's revenue by roughly $22 million in 2012. But he said the move would have a "neutral financial impact" because of the expenses of maintaining the group.
Dewey's gross revenue increased slightly in 2011, to $935 million from $909.9 million in 2010, according to The American Lawyer. Profits per equity partner rose 1 percent.
In a statement, Alexander Dye, one of the departing lawyers, said, "We see terrific synergies with the firm's world-class private equity, M&A and asset management practices, as well as its long-established and substantial insurance practice."
Another reason the group may have chosen Willkie is because Dye has a twin brother, William Dye, who is a partner in Willkie's corporate and financial services department.
(Reporting by Terry Baynes and Leigh Jones; Editing by Noeleen Walder and Martha Graybow)