Reuters reports that the crippled law firm of Dewey & Leboeuf LLP filed for Chapter 11 bankruptcy protection Monday night and will seek approval to liquidate its business after failing to find a merger partner, marking the biggest collapse of a law firm in U.S. history.
In the movie Wall Street, Gordon Gekko, played by Michael Douglas, said, “Greed is good.” Greed is not good, Mr. Gekko. Greed kills.
There is the long-shot chance that politicians, many of whom think they were elected to spend as much of their constituents’ money as possible, will learn a lesson from this record collapse. The law firm paid compensation to its employees that was too high, put too much money into retirement plans, and ran up unsustainable debt. If that sounds like any country you could name, you are on the right track.
I will bet that the law firm partners had the “it can’t happen here” attitude, just as many of our Representatives, Senators, and President do. Don’t kid yourself. When the money runs out, and it already has, a collapse in some form has to come. Raising the debt ceiling so the country can print more money only delays the inevitable. In the meantime, it would be better to learn from the mistakes of others, such as the law firm of Dewey & Leboeuf LLP, than to continue to make the same mistakes that they have made.