Bankruptcy bites. (bankruptcy of law firm Perito & Dubuc)

The Washington offices of Reed Smith Shaw & McClay, Pittsburgh's premier law firm, are in an unremarkable building on 18th Street NW that's now enduring the indignity of a complete facelift. It may be one of the last places in Washington where elevator operators still whisk visitors to their desired destinations.

On the fifth floor is Reed Smith's conference room. It was here on three steamy evenings in July that 20 to 30 lawyers from Washington's most prominent firms gathered in a belated post-mortem for one of their own, the defunct firm of Washington Perito & Dubuc. Pronounced dead in August 1991, Washington Perito has been mired in the legal limbo known as Chapter 11 bankruptcy for nearly two years.

There was a time when some of these same partners got together to divvy up the law firm's booty. But now they are squeezed into a conference room, forced to cough up enough money to appease a horde of angry creditors, who are owned roughly $20 million in all. Before Washington Perito can receive a proper burial, its ex-partners must decide how much each will pay to satisfy the old firm's debts. "In any bankruptcy case, you never have an identity of interest among individual partners," says Stephanie Wickouski, a Reed Smith partner and the bankruptcy expert who's representing Washington Perito. "You never have 33 people in identical situations."

Imagine a meeting with your ex-spouse three years after the breakup to hammer out all the leftover money matters, multiply that by 33, and you get an idea of what Washington Perito's bankruptcy proceeding is like. Only there's a lot more money at stake.

There's no reason to weep over the fate of the former partners in the firm. The bankruptcy may embarrass some of them; it certainly is a major-league failure for a bunch of bright, highly regarded overachievers. But it hasn't stigmatized them. Since the firm went belly-up, most of the former partners have landed top-dollar jobs at top-drawer firms: Graham & James; McDermott Will & Emery; Paul Hastings Janofsky & Walker; Powell Goldstein Frazer & Murphy; Rosenman & Colin.

Nor does Washington Perito's bankruptcy mean that the ex-partners are broke. Bankruptcy at this altitude doesn't work that way -- it stings, but doesn't cripple. One of the five former Washington Perito partners who's filed for personal bankruptcy, for example, earned $240,000 last year as a lawyer at Keck Mahin & Cate; still has his $700,000 home in Bethesda; and still plays tennis with a $5,000 racket.

For most of the ex-partners in Washington Perito, the firm's bankruptcy was deja vu all over again. Thirty of the partners had also been partners in the Washington office of Finley Kumble Wagner Heine Underberg Manley Myerson & Casey, the 700-lawyer behemoth that imploded in 1987. Finley Kumble remains in bankruptcy. The Washington Perito partners owe Finley Kumble's bankruptcy trustee $3.8 million. "Even if Washington Perito & Dubuc closes down," partner James Christian told a reporter for the Washington Post in 1991, "the $3.8 million survives wherever [the individual partners go]." So far, however, the Washington Perito partners have…