Biglaw, Google / Search Engines, Litigators, Partner Issues

In Defense Of Cleary Gottlieb

Is this elite law firm getting a bum rap?

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As we noted in today’s Morning Docket, the American Lawyer just published an interesting article with a provocative title: Cleary’s Litigation Slump. In the piece, Michael Goldhaber notes some high-profile defeats recently suffered by Cleary Gottlieb, which he cites in wondering whether the super-elite law firm might be losing its courtroom mojo.

The article struck me as a bit unfair to Cleary. Here’s why….

First let’s lay out Goldhaber’s thesis. He writes:

In the past six months Cleary Gottlieb Steen & Hamilton litigators have lost a string of historic cases for clients Russia, Argentina and Google Inc., including July’s $50 billion loss in the high-profile Yukos arbitration, while the firm was publicly embarrassed for advice that it reportedly offered to another major client, BNP Paribas. Powerful entities routinely ask Cleary to push the envelope in international law. Lately it hasn’t worked out well.

“While we can’t comment on ongoing matters,” a Cleary spokesperson says, “the firm is proud of the work Cleary lawyers do every day to achieve success for our clients involved in complex litigation around the globe.”

That’s a very diplomatic response — exactly what you’d expect from a dignified, white-shoe firm like Cleary. A more candid response might have been, “We’ve become the go-to firm for very naughty clients with unwinnable or almost unwinnable cases, so of course we’re going to lose a lot.”

That wouldn’t be a nice thing to say about one’s clients, but it would be the truth. Let’s look at the cases. Goldhaber cites Cleary’s work on behalf of Argentina, in various cases against the investment community; Google, in the “right to be forgotten” litigation in the European Union; BNP Paribas, in litigation with the Justice Department that culminated in a $9 billion settlement; and Russia, in the Yukos Oil arbitration that resulted in a $50 billion award against that nation.

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Argentina is a deadbeat sovereign with a stubborn streak; of course its lawyers are going to get smacked around in the U.S. courts (which I witnessed firsthand when I covered the Second Circuit argument in the NML Capital case). Google’s loss in the EU was due mainly to the wackiness — to put it charitably — of the EU Court of Justice, not any missteps by Cleary. BNP Paribas, as Goldhaber notes, allegedly ignored warnings by Cleary that the conduct that got the bank in trouble might run afoul of the law. Finally, Russia is, well, a bunch of thugs masquerading as a nation-state Russia.

In fairness to Goldhaber, he mentions this possible defense briefly, at the very end of his piece:

Cleary represents some of the biggest clients in the world in the biggest cases—especially in disputes involving sovereign countries. Representing nations that are arguably the world’s leading political pariah and the world’s leading financial pariah can be a challenge. Russia and Argentina sometimes take actions that are tough to defend, and each may take aggressive litigation positions in the knowledge that they may never be held to account…. Clients like these need very good lawyers. Sometimes that’s not enough.

Exactly: sometimes very good lawyers aren’t enough. Just as card players must be evaluated based on the cards they’re dealt,[1] lawyers must be evaluated based on the clients and cases they have to work with. We’ve all seen awful lawyers win cases because the facts and law were on their side, and we’ve all seen great lawyers lose cases because the opposite was true. In reasonably close cases, the quality of lawyering can affect the ultimate outcome; but in some cases, one side is simply going to lose, and lose big, no matter how good their legal counsel.

And this is, to be honest, something I didn’t enjoy about being a practicing litigator. Litigation wasn’t like high school or college debate, largely a contest of skill where the best man or woman would win, at least most of the time. In real-world litigation, these pesky things called laws and facts intervened, allowing terrible lawyers to prevail, simply because their clients were in the right, and causing amazing lawyers to go down in defeat, simply because their cases were dogs.

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Now, there are many points that could be made in response to these observations, which I’ll mention but won’t discuss in detail. Yes, good lawyers can exercise discretion in picking their cases and clients (unless the lawyers are, for example, court-appointed counsel to indigent criminal defendants). Yes, good lawyers can advise their clients about how to stay out of legal trouble (but sometimes the clients don’t listen, like BNP Paribas allegedly didn’t). Yes, good lawyers can advise their clients when settlement might be better than litigation (but sometimes the clients are staunchly opposed to settlement, like Argentina).

Sometimes being a good lawyer involves getting a “less bad” result for your client. Take public defenders. One wouldn’t say of a public defender, “He’s terrible — most of his clients end up going to prison.” Of course most of his clients end up in prison; prosecutors (usually) don’t go around hitting innocent people with criminal charges, and they like to pick cases where the evidence is strong. So a “victory” for a public defender might be negotiating a favorable plea agreement, or winning a disputed issue at sentencing; getting the client off was never a real possibility.

For any law students or young lawyers out there who are still trying to choose a practice area, issues related to winning — how often does a certain type of lawyer win, what does it mean to “win” in a particular area of law, and how much do you personally care about winning — merit consideration. If you have a competitive personality and don’t like losing, you might want to head towards specific jobs. This is why I enjoyed doing appellate work for the U.S. Attorney’s Office. When you represent the federal government in criminal appeals, you win — a lot — and if there’s a good chance you might lose, perhaps because you have a case with a terrible record, you can try to avoid the loss by confessing error.

That terrible lawyers win meritorious cases and that great lawyers lose weak cases is great news for, well, the rule of law — a testament to the ability of the legal system to generate just outcomes. But it does make litigation less fun for hyper-competitive types who just want to win.

And less fun for the litigators at Cleary Gottlieb. But $3 million in profits per partner is a nice consolation prize.

[1] This statement does not apply to extremely skilled poker players. I agree with Judge Jack Weinstein that poker “is not predominately a game of chance” (at least under the right circumstances).size>

The Global Lawyer: Cleary’s Litigation Slump [American Lawyer via Morning Docket]

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