New York law firm Dewey & LeBoeuf is shaking up its management structure after the recent departure of nearly 40 of its 300-plus partners — including the managing partner of its Washington office.

Dewey will go from having a sole chairman to a five-partner “office of the chairman” that includes leaders of the firm’s most profitable practice groups: head of Dewey’s D.C. lobbying practice Charles Landgraf, three practice group leaders in New York and chairman Steven Davis. Davis will relocate from New York to London to focus on the firm’s international practice.

The restructuring is pending approval of the entire partnership in a vote to be completed this week.

Since January, there has been a run of notable departures in Dewey’s D.C. office, including:

Managing partner of the District office and chairman of the tax group Abraham “Hap” Shashy Jr. left for King & Spalding

Chairman of Washington corporate practice Timothy Moran went to Sidley Austin

Securities and regulatory partner Christopher Petito moved to Willkie Farr & Gallagher

Petito is one of 12 attorneys who left Dewey for Willkie Farr in March; the group also include leaders of the firm’s corporate finance, insurance, and mergers and acquisitions groups. They were quickly followed by six insurance and tax partners jumping to Sutherland Asbill & Brennan, including head of the firm’s Chicago outpost. Then Houston managing partner left for a Texas litigation boutique, taking three associates with him.

At the heart of the exodus is a major compensation problem, former Dewey partners said. The firm ran out of cash to pay many partners after making lucrative pay guarantees to star “rainmakers” — a term coined for lawyers who generate significant business — in order to hire them from other firms, according to former Dewey attorneys. In the end, Dewey’s profits couldn’t keep up with its aggressive lateral hiring that in 2011 alone brought in 37 attorneys.

The firm’s revenue and profits per partner stayed flat in 2011 (up 2.8 percent and one percent, respectively, according to annual figures the firm reported to The American Lawyer), and the lower-than-expected financials prompted dissatisfaction among some partners, said Jeffrey Kessler, chair of Dewey’s global litigation practice and a member of the new leadership team.

“We don’t think bringing in laterals was a mistake,” Kessler said. “We had higher expectations for revenue and compensation last year than we came up with. We did have, as many firms have, some partners who had agreements that guaranteed them certain things ... But it was more that our results were largely flat and we were expecting a significant increase, that caused stress in the compensation system.”

More than half of the partner departures were expected, firm leaders said. The insurance group was not among them. Those losses hit the firm especially hard because insurance was the signature practice of Dewey’s predecessor LeBoeuf, Lamb, Greene & MacRae, which merged with Dewey Ballantine in 2007 to form its current iteration.

There are more reductions to come. Last month, Dewey announced internally that it will cut 5 percent of lawyers and 6 percent of administrative staff.

Former partners estimated the firm’s debt at more than $100 million, unusually high for a law firm, and said partners are owed millions in deferred compensation accrued over years. Dewey declined to comment on debt levels except to say the firm is negotiating a two-year credit line scheduled to end in April, and that they expect discussions with lenders to conclude successfully.

Former Dewey attorneys and legal recruiters stopped short of comparing the firm’s troubles to the demise of Howrey, the venerable Washington firm that dissolved and declared bankruptcy last year — but said if the firm cannot hang onto its remaining partners, it could face a real threat to survival.

Kessler dismissed those concerns, saying the firm posted record growth in the first two months of 2012 — up 28 percent in collections in January and February compared to the same period in 2011 — and that he sees no basis for a comparison to Howrey.