Sullivan & Cromwell: Because Charney v. S&C Is Just the Tip of the Iceberg
Well 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]
(31) Comments
Comments
Lat - I have a hard time figuring out how this is even newsworthy, much less "fascinating" as you describe it. I think you are getting a little carried away with your anti-S&C tone.
That S&C has an attrition rate of 30% - and is freaking out abot it? That there's an unidentified outside law firm investigating the Charney case?
Of course it's newsworthy. This appeared in the hard copy of the WSJ. Trees died for this!
I think it would have been newsworthy, except that the meeting happened ELEVEN MONTHS AGO.
I can totally see why this is fascinating. It is to me. I mean, here's this giant, old powerful BigLaw. It's supposed to be the creme of the crop... what we are all aspiring toward. And yet... things just are not so great afterall on the inside and finally people are saying "forget it" or "not gona take this anymore." Plus, that WSJ article was like a PR thing by S&C to me. I mean, come on... a partner did what that woman did and all they can say is "we are embarrased" and then the head of the firm is saying things are getting better here? Now way.
Eleven months ago, but maybe the anonymous sources and illegally leaked documents are new to the WSJ? I wonder who would do such a thing?
Yet another reason why NYC is a shithole.
not newsworthy. None of the people involved were clerks or Elect.
Allegations aren't that serious.
And some of the post categories you've got are getting ridiculous
Not newsworthy to you but it is to others. I mean, what if you are a law student wondering what to do with your career after you graduate for example.
You're "fascinated" to discover that BigLaw is "not so great afterall"? You needed this article to tell you that BigLaw isn't all hugs and kisses? Come on.
As for the attrition rates, I'm glad to see Lat is so anti-S&C that he opted not to include the only piece of information from the article that isn't nearly a year old: that S&C has dropped its attrition rate down to about 22%, which seems to be about on par with other NYC BigLaw.
Sorry Lat, but you should at least pretend to not hate S&C. It's starting to make me sick.
I agree with David that Korry missed that meeting. Bur it has nothing to do with Aaron. Korry is a walking terror. I have NEVER had any problem working with any partner here at S&C besides for Korry. Anytime I've had to work with her, it's been an absolute nightmare.
I doubt that Lat "hates" S&C, or even has an opinion one way or the other. He worked at WLRK; he left. Obviously he knows what goes on in big NY firms and he didn't want to be a part of that, so we know where he stands. Rather than some vendetta against 125 Broad, Lat is writing about S&C because there has been extensive coverage of S&C of late in the media, and this is a blog that links to coverage of legal stories.
I wonder if S&C's public relations people post on blogs?
Maybe "hate" was a strong word, but I think it's safe to say that since the Charney case started, Lat has had quite the anti-S&C slant (e.g., not even mentioning that current attrition rates are back down to about 22%).
Of course Lat is going to snark on a Biglaw that's the subject of a lurid lawsuit. He'd be a pretty crappy blogger if he didn't.
Lat made fun of Cravath back when that tax lawyer was arrested for screwing underage girls. He covered "Aquagirl" at Cleary Gottlieb like crazy (maybe excessively).
White-shoe law firms embroiled in scandal will inevitably get mocked in the blogosphere. That's just the way it is.
If you want "fair and balanced," stick to the MSM. Bloggers have axes, and they will grind them.
So who is going to announce today?!!!
LOL... if you want to find out if S&C was accurtely portrayed, all you have to do is sit down with a particular litigation partner named Bill, real class A Jerk.
LOL... if you want to find out if S&C was accurtely portrayed, all you have to do is sit down with a particular litigation partner named Bill, real class A Jerk.
LOL... if you want to find out if S&C was accurtely portrayed, all you have to do is sit down with a particular litigation partner named Bill, real class A Jerk.
LOL... if you want to find out if S&C was accurtely portrayed, all you have to do is sit down with a particular litigation partner named Bill, real class A Jerk.
I'll take a job at S&C in a heartbeat. They're hiring the wrong people.
Don't use abovethelaw to libel public figures dude.
Isn't "Class A Jerk" just a non-actionable opinion?
Why is no one answering Lat's question. I don't know, but if I had to guess, the firm doing the internal investigation at S&C is most likely Paul Weiss. S&C has turned to them numerous times before for representation and were happy with the results achieved. They are a natural choice for S&C because they have a litigation department that is far superior to S&Cs own and a corporate department that is no where near the league that S&C's is at. Basically, those two firms are not really competitors of each other.
I meant private.
The assertion that Lat has a bias against S&C is ludicrous. The slant of the coverage thus far has been in favor of Charney because HE IS THE ONE PROVIDING INFORMATION AND COMMENT. S&C has been silent. No "anonymous" high-level S&C sources have called up Lat and tried to influence the coverage, I imagine. The extent of his contact with the official or non-official S&C PR apparatus has, I imagine, been zilch. The extent of S&C associates posting comments under "Anonymous" seems to be quite extensive, however, but anonymous commenters do not a credible source make.
So what's with the timing here? Is Charney playing hardball and leaking these documents to the WSJ to bolster the perception of S&C as a toxic workplace environment (with the implied threat that he could leak more)? Or is the timing a complete coincidence, with S&C just having a tough month?
12:36- What year are you at Paul Weiss?
S&C does not use Paul Weiss that often, and there are other firms around that specialize in representing law firms.
Does Paul Weiss really have a corporate department? I am straining my brain to recall any noteworthy deal they worked on in 2006.
Bottom line: S&C's jerk partners are shooting themselves in the foot. Paybacks are a b*tch, and for all of the unhappy associates (even at the 22% attrition rate the S&C associate above is trumpeting).
Here is the real question: is S&C really the worst firm to work at in NYC? And aren't the partners smart enough to fix it? Seems that the answers are yes and no.
12:36- What year are you at Paul Weiss?
S&C does not use Paul Weiss that often, and there are other firms around that specialize in representing law firms.
Does Paul Weiss really have a corporate department? I am straining my brain to recall any noteworthy deal they worked on in 2006.
Bottom line: S&C's jerk partners are shooting themselves in the foot. Paybacks are a b*tch, and for all of the unhappy associates (even at the 22% attrition rate the S&C associate above is trumpeting).
Here is the real question: is S&C really the worst firm to work at in NYC? And aren't the partners smart enough to fix it? Seems that the answers are yes and no.
Dear S&C parters... please just make this all go away.
Paul Weiss only has 200+ partners and associates in its corporate department, so I guess the answer to your question, S&C Fading Fast, is clearly no...or possibly...or yes. Why don't you do some research on thedeal.com and save us all the headache.
I work in the health care field and I can tell you that if we had a 22%+ attrition rate per year, patients would die, surgeries would be delayed, complications rate would skyrocket, and...you get the picture. While this would look appetizing from a litigation standpoint, imagine you were one the patients...
ANY professional entity with such an attrition rate has got a serious problem. Resolving this problem start with a liberal installation of mirrors in the partners offices.