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King & Spalding: More DOMA Drama, Plus Salary and Bonus News

Paul Clement and John Boehner: now out of King & Spalding's hair.

Some people, including crisis communications experts, think that King & Spalding should just shut up already about the DOMA debacle. The firm agreed to represent the House of Representatives in defending the controversial Defense of Marriage Act, and then almost immediately turned around and withdrew from the representation. This prompted the departure from the firm of star appellate litigator Paul Clement, former Solicitor General of the United States, who took the DOMA matter over to his new firm, Bancroft PLLC.

The decision to drop DOMA defense also led to the defections of King & Spalding clients, like the NRA and the state of Virginia. It generated criticism of the firm from diverse quarters — everyone from Ken Cuccinelli to the New York Times editorial board. [FN1]

Despite the advice of the communications experts (with which I personally agree), King & Spalding continues to discuss the DOMA debacle. The firm is starting to sound like a therapy patient that won’t relinquish the couch, and just wants to yap and yap and yap. Are you listening?

Let’s look at the latest revelations — and also some compensation news out of K&S….

Here’s the DOMA disclosure, from Meredith Hobbs of the Fulton County Daily Report:

Two lawyers within the firm who spoke to the Daily Report on condition that they not be named because King & Spalding has prohibited its people from talking publicly about the controversy, as well as a third person familiar with the situation, said that the DOMA matter was not submitted to the firm’s business review committee before Mr. Clement signed the engagement letter with the House.

They said the committee, composed of five partners from different offices, immediately began reviewing the case on Tuesday, April 19, the day after the firm learned of the contract, and rejected it the next day.

“The firm did not back out. We never agreed to take it,” said one of the King & Spalding lawyers.

Maybe so. But this was still a screw-up on someone’s part — perhaps Clement’s, for signing the contract, or perhaps the partnership’s, for not making clear that nothing should be signed without the business review committee’s approval.

Only the business review committee can create a matter file, said the sources. Without one, an engagement effectively does not exist, since there is no way to bill hours to it. The sources said nobody at the firm has the authority to override the decisions of the business review committee.

King & Spalding, like other large firms, is managed by practice groups, not offices. Partners submit a potential matter to the business review committee with approval from the practice group leader. A conflicts check must be performed and, if a case checks out, the business review committee facilitates further vetting, said one of the sources.

“Any matter that is controversial in any way or where there is a discounted rate goes through the business review committee,” said one of the sources, noting that the DOMA engagement was both controversial and had a discounted rate.

Last month, I had a debate with some commenters about whether King & Spalding was discounting on the DOMA case. I took the position that the blended rate of $520 an hour “represents some sort of discount from K&S’s normal rates.” It appears that I was correct. (Sorry to gloat, but it’s not often that one gets to lord it over the commenters, who always seem to get the last word.)

All of the King & Spalding sources said that there was adamant opposition to the DOMA case from within the firm. One of the sources said there has never been such opposition by the firm’s partners to an engagement: “never in these numbers and vehemence to this magnitude.”

“It sticks a finger in the eye of people,” said one of the sources, referring to the firm’s gay lawyers and staff. An associate of the firm is president of Georgia’s gay legal group, the Stonewall Bar Association, while a King & Spalding partner is on Stonewall’s board.

One source said the case also did not fit the firm’s business mission. “King & Spalding is a corporate law firm, not a constitutional firm. This is not the kind of case the firm generally takes.”

(Well, when the firm picked up Paul Clement after his SG tenure, they probably should have expected a few constitutional cases.)

UPDATE (1 PM): An excellent question from Professor Jonathan Adler, of the Volokh Conspiracy: “No constitutional cases?!?! Umm . . . what were the issues in their representation of Gitmo detainees?”

There was also opposition to a clause in the contract gagging the firm’s employees from any advocacy related to DOMA, said the sources, who added that the clause was likely illegal in California, where the firm has two offices.

This so-called “gag rule” is what seriously stuck in the craws of the K&S sources we heard from. Firms represent controversial clients all the time, including big bad companies and white-collar criminals. But taking the additional step of barring lawyers and staff from advocating against a law that many find reprehensible and discriminatory was one step too far.

So K&S decided to make it up to its associates with… a pay raise? Last week, a tipster told us:

K&S DC had a meeting to discuss the DOMA debacle at which they also announced we were (finally) going back to market salaries — retroactively to January 1 too, which is sweet!

This makes me think of guilty parents who, after having an ugly fight in front of their son, try to make it up to him — and erase the unpleasant memory — by buying him a new video game. And, to be honest, it’s a pretty good strategy!

Here’s corroboration from a second source:

Yes! They announced last week that DC and NYC are going back up to market (160, 170, 185, 210, 230, 250). Payable today, back paid to January 1.

As far as we know, the pay raise to the market-level, $160K scale went to the D.C. and New York offices. Did other offices — e.g., the northern California outposts — get pay bumps too? If so, please alert us, by email or by text (646-820-8477 / 646-820-TIPS). We will update this post with what we learn.

(For example, is there any action out of Houston? Earlier this year, a Houston K&S lawyer complained to us: “Salaries here are compressed, with the range between first and fourth year associates being only 15k (160-165-170-172,500-175-180).” But, on the bright side, you live in Texas — you have a good cost of living and no state income tax.)

One K&S source added:

Re: spring bonuses, they said they are still evaluating.

So the firm might even be doing spring bonuses — they must feel really bad about the DOMA debacle. King & Spalding associates, please send your thank you cards to Speaker John Boehner, c/o House of Representatives, and Paul Clement, c/o Bancroft PLLC.

In other bonus news, we never covered K&S’s regular or year-end bonuses for 2010 (which were announced quite late, well into 2011). Here’s what one tipster told us:

While other firms have been announcing spring bonuses, King & Spalding didn’t even announce year-end 2010 bonuses until a few weeks ago. They’re on the same scale they’ve been on for the last couple years, which is roughly the 2010 Cravath bonus scale, without spring bonuses. You only get a bonus if you get 2050 billables, which is pretty steep for DC. (I think that is a firm-wide requirement, and I think the bonuses are the same throughout the firm.)

And another:

Bonuses were paid at the end of March according to the scale that has been around for a while, which has a billing threshold of 2050…. Memos were distributed individually announcing bonuses and showing the calculation. Associates receive an hourly bump for hours billed above 2050.

Here’s a third, from the mother ship in ATL (Atlanta, not Above the Law):

K&S paid out bonuses in its Atlanta office on March 31st based on the same scale as last year and the year before. Bonuses in Atlanta are set at a flat amount for achieving 2,050 hours and a variable amount for each hour in excess of that.

So there you have it: all the King & Spalding news that’s fit to print. Hopefully we can move on from K&S’s DOMA disaster. But if you have other info about the firm that might be of interest, we’d love to hear it.

[FN1] In fairness, word on the street it that the NRA and the state of Virginia hired King & Spalding in order to hire Paul Clement — because clients hire lawyers, not law firms. When Clement left, these clients were of course going to leave — not because of the DOMA debacle, but because the partner who drew them to the firm had departed. Of course, they couldn’t resist the opportunity to score public-relations points with a noisy withdrawal from the K&S client roster.

As for the firm’s awkward handling of the DOMA situation, K&S did have some defenders — such as Professor Deborah Rhode, the prominent legal ethicist. Professor Rhode argued that in the civil context, it’s not that problematic to dump a client, as long as the client won’t be prejudiced.

‘Misunderstanding’ Blamed in Firm’s DOMA Withdrawal [Fulton County Daily Report]
Report: DOMA Contract Had Not Been OK’ed By King & Spalding Ethics Committee
[Poliglot / Metro Weekly]
King & Spalding was right to withdraw [National Law Journal]
“Mea Culpa,” Says King & Spalding D.C. Partner [The Careerist]

Earlier: Paul Clement and King & Spalding Defend DOMA — at a Discount

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