Aaron Charney, Alexandra Korry, Anal Sex / Butt Sex, Attorney Misconduct, Biglaw, Eric Krautheimer, H. Rodgin Cohen, Legal Ethics, Media and Journalism, Oy, Peter Lattman, Rudeness, Screw-Ups, Stephanie Wheeler, Wall Street Journal

Sullivan & Cromwell: Because Charney v. S&C Is Just the Tip of the Iceberg

Sullivan & Cromwell S&C Sully Above the Law.jpgWell before Charney v. Sullivan & Cromwell was ever filed, the venerable law firm was dealing with some serious issues. As aptly summarized by New York Magazine’s Intelligencer, “Sullivan & Cromwell lost about 30 percent of its associates in 2004 and 2005. It might take more than a raise to fix that.”
From a fascinating rather interesting Wall Street Journal article by Peter Lattman (which we meant to write about yesterday, before we got swamped by all the pay raise news):

Faced with a surge in turnover of its associates, the prestigious law firm Sullivan & Cromwell LLP has been putting on a charm offensive to hold onto junior lawyers.

The crash course in etiquette went into high gear at a partners meeting last February. To deal with low associate morale and high attrition, a confidential slide presentation reviewed by The Wall Street Journal urged partners to say things like “thank you” and “good work” to associates they supervise.

What else should partners do? “Return associates’ phone calls as quickly as you would a partner’s or client’s,” said one bullet. “Be sensitive to not canceling associates’ vacations,” said another.

Additional bullet-points made these helpful suggestions:

“Don’t tell gay associates that they like taking it up the ass (because they might be tops rather than bottoms).”

“Refrain from subjecting associates to profanity-laced tirades in which you tell them they should be fired.”

Guess Eric Krautheimer and Alexandra Korry missed that meeting.
Discussion continues after the jump.

The Intelligencer blog item about the WSJ piece describes S&C as “bleed[ing] associates.” This seems to be accurate:

[T]he New York firm, now with about 625 lawyers, lost 31% of its associates in 2004 and 30% in 2005. The average associate attrition rate for law firms of about that size or bigger for 2004 was 21%, up from 16% in 2002, according to a study by the National Association for Law Placement.

Another slide showed that in American Lawyer magazine associate-satisfaction surveys, Sullivan compared unfavorably with peers like Davis Polk & Wardwell, Cleary Gottleib Steen & Hamilton LLP and Debevoise & Plimpton LLP. In 2005, Sullivan ranked 155 out of 160 law firms in a survey of midlevel associates.

But Sullivan is taking steps to address these problems:

Another effort to improve morale involved rethinking the performance-review process. One Sullivan lawyer considered borrowing from an approach used by the firm’s biggest client, Goldman Sachs Group Inc. Stephanie Wheeler, a Sullivan litigation partner and co-head of a new committee on associate morale, sent a memo in June to her two co-heads, entitled “Sample Goldman Sachs 360 Degree Reviews.” Attached were four reviews of Goldman employees, including three of partner managing directors…..

Ms. Wheeler told her colleagues that the papers might be helpful examples of ways to revamp the firm’s review process. She noted in the memo: “I’ve redacted the names on the reviews for confidentiality, but I’d still urge you to treat these with the utmost discretion.”

Ms. Wheeler redacted the full names of the Goldman employees on the front page, but either didn’t black out their first names or their positions through the rest of the review. It’s unclear whether Ms. Wheeler sought Goldman’s permission to circulate the reviews — neither firm nor Ms. Wheeeler would say. The reviews, seen by the Journal, were obtained by Sullivan in its representation of Goldman in a regulatory investigation. The identities of the people were easy to determine, a fact that individuals close to both Goldman and Sullivan describe as embarrassing.

WHOOPS!!! But we do like the understated, gentle way in which Lattman handled this S&C screw-up. As one correspondent observed to us: “Note how casually [Lattman] mentions what seems to me to be a pretty serious ethical lapse at S&C.”
(Note: The seriousness of this lapse is debatable. But its mortification value is not.)
Near the end of the piece, there’s a quick shout-out to Aaron Charney:

Issues of associate morale were noted in a sexual discrimination lawsuit filed against Sullivan last week by a fourth-year associate, Aaron Charney. Mr. Charney, who is gay, accuses the firm’s partners of lewd and illegal behavior. Sullivan “categorically denies Mr. Charney’s allegations,” said Mr. Cohen in an email sent out to all Sullivan employees last week. The firm is conducting an investigation with an outside law firm related to new allegations in Mr. Charney’s complaint, according to people familiar with the situation.

Here’s the $64,000 question: Which outside law firm is examining Eric Krautheimer’s documents for s**t stains conducting the internal investigation of S&C?
Does ‘Thank You’ Help Keep Associates? [Wall Street Journal]
Legal Ethics Quiz: S&C and Goldman’s 360-Degree Reviews [WSJ Law Blog]
Sullivan & Cromwell and Associate Morale [WSJ Law Blog]
Sullivan & Cromwell Bleeds Associates [New York Magazine / Daily Intelligencer]

(hidden for your protection)

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