It's a government holiday, so public sector employees get the day off. And the markets are closed, so Wall Street is out today too.

But not everyone gets Martin Luther King Jr. Day as a holiday. From an incensed tipster:

[A friend] at Price Waterhouse Coopers forwarded this offensive message, which was sent from the head of PWC US to all US employees. It is one thing for firm management to decide not to observe Dr. King's birthday. It is quite another to dress up that decision, which was clearly motivated by a refusal to bear the costs of observing the holiday, as a noble gesture in honor of Dr. King's achievements.

Clearly, the firm believes that its employees (many of whom are attorneys -- hence the email to Above the Law) are unintelligent enough to believe that this thinly veiled insult was intended to honor Dr. King. Even more offensive is the fact that the firm denigrates Dr. King's extraordinary struggles and achievements by equating them with the daily work of accountants, auditors and tax professionals as they work to save tax dollars and maximize profits for mega-corporations.

The comparison is laughable and utterly offensive. I trust that ATL will not allow the insult to go unnoticed.

We'll let you be the judge. Check out the message, after the jump.

From the year-end message of Cesar L. Alvarez, CEO of Greenberg Traurig (one of our favorite firms here at ATL -- see, e.g., here, here and here):

I had a few thoughts for 2007 and 2008 that I would like to share as my year-end message.

First, 2007. As of today, Sunday, December 30, 2007, we have collected $313.5 million during our collection drive and expect to collect approximately $16.5 million on Monday, the 31st, to reach $330 million for our December collection drive. Although we expect to be short by $10 million of our goal, this is still a great accomplishment when you consider the housing situation, the subprime issues and the dislocation of the credit markets that prevented a number of deals from being completed this year.

Read the rest of Cesar Alvarez's message -- in which he spreads holiday cheer doom and gloom, jawboning down associate compensation expectations -- after the jump.

Last month, Morgan Lewis & Bockius issued a bonus non-announcement -- a placeholder memo, indicating that bonus news would be forthcoming.

Perhaps MLB associates have reason to be optimistic. The firm must be saving some money, since it's making associates pay their own way on the ski trip of Business and Finance Practice Group. Our tipster observes: "[T]his is yet another reflection of Morgan Lewis' caring attitude."

When law firms hold "destination events" -- e.g., the Boies Schiller firm meeting in Jamaica, the Kirkland & Ellis retreat at the Hotel Hershey, and other retreats mentioned here -- they often pay for their associates to attend. But there's no rule holding that they must do so, especially if attendance is voluntary (which is the case here).

And hey -- at least the firm has negotiated a special ML&B discount!

(ML&B ski trip memo, after the jump.)

The Grinch stole... my Lincoln town car! This afternoon, the following email was sent to all personnel in the New York office of Dewey & LeBoeuf:

To: "DL All NY Personnel"

Sent: 12/11/2007, 12:42 PM

Subject: Holiday Party

As a reminder, the firm will be hosting a holiday party for the New York office this Monday, December 17. The party will be held at Del Frisco's from 6:00 pm - 10:00 pm, and will include a full bar, raw bar, carving stations and a DJ. We hope you join us and enjoy the event -- as we wind down an exciting year in our history, we certainly have a lot to celebrate.

Due to the increased number of attendees this year, we kindly ask that all attendees provide for their own transportation home. Furthermore, as we welcome all personnel from all three of our New York locations, we are unfortunately unable to accommodate spouses or guests at this year's party.

We thank you for all of your hard work and dedication in 2007 and look forward to seeing you at the holiday party next week.

------------------------------------------------------------
Dewey & LeBoeuf LLP
1301 Avenue of the Americas
New York, NY 10019

A law firm holiday party without a chauffeur to ferry you home? Heresy! One tipster opines:

This seems quite ludicrous. They're offering an open bar for four hours, and yet they're telling everyone to find their own transportation home. Aside from the potential liability issues this may raise, it seems ridiculous that a firm as big as Dewey would require everyone to find their own car rides home.

Ah, but maybe size is the problem. When two already large, New York-based firms merge with one another, is the resulting behemoth so ginormous that covering its holiday party would suck up every livery vehicle on the island of Manhattan?

(Then again, a question: Does Skadden provide transportation home for people from its holiday party?)

To well-paid associates who live in Manhattan, springing for a cab may not be a big deal. But this may be somewhat inconvenient to support staff who live farther way -- e.g., hipster paralegals from Brooklyn, secretaries from Staten Island. Perhaps they will leave the festivities earlier than usual this year and take mass transit.

Does your firm provide transportation home from your holiday party? Feel free to share in the comments.

Update: Yes, we did note the dis-inviting of plus-ones (as pointed out in the comments). But that's par for the course, or "market," for New York law firm holiday parties. We believe that of the six firms whose parties we described in this piece, only one -- Sullivan & Cromwell -- allows spouses or dates.

Earlier: 'Tis the Season: A Round-Up of New York Law Firm Holiday Parties
Do Plaintiffs Lawyers Throw the Best Parties?

Late last month, we posted what appeared to be a White & Case memo, concerning requests for vacation during the Christmas week this year. There was some debate in the comments about the memo's authenticity and/or how widely it was distributed (e.g., maybe it was just for the M&A group). But the gist of the memo, which shouldn't be that shocking, is that everybody wants that week off -- so if you were hoping to take vacation that week, you might want to rethink your plans.

Down in D.C., Hogan & Hartson apparently has a much more generous holiday policy. They just announced that, since Christmas and New Year's Day fall on Tuesdays this year, the firm will be closed on both of the preceding Mondays: December 24 and December 31. The firm characterizes these office closings as "an expression of thanks for the dedication and hard work of our lawyers and staff this past year."

But are associates happy about this news? In some quarters, it's being viewed cynically:

We have been fighting with H&H regarding decent bonuses this year, especially given their usual disgraceful examples of bonuses. This seems to be their way of bonusing us (without actually paying). Give us more days off, so it is more difficult to make your minimum hours the next year. The partners are tight and don't seem to want to pay any form of market or even reasonable bonuses despite unprecedented productivity and billing rates this last fiscal year.

For those of you who are curious, the Hogan & Hartson memo appears after the jump.

Earlier: Making the Case for a White Christmas at Biglaw

Federal judicial clerkships are coveted positions -- and for good reason. They burnish your resume, enhance your connections, and give you a view of litigation from the other side of the bench.

So we'd like to bring you news of a very special clerkship position. Please keep in mind, however, that it's not for everyone. The ideal candidate will have no student loans and no kids to support. A trust fund and/or a well-to-do family are helpful.

An ATL tipster was recently offered this clerkship position:

Dear [redacted]:

Although Judge [redacted] has hired a clerk for his 2008-09 funded position, he still has an opening for his unfunded position. The unfunded position carries all of the responsibilities, prestige, and future opportunities of the funded position; the only difference is the salary.

Please let me know if you are interested in being considered for this position or if you would like more information about this position.

Thank you,
[redacted]
United States District Court, [redacted] District of Texas

Pretty insane, right? We expect many offerees tell the judge to take his clerkship and shove it.

But on the other hand, if you can afford to live without a salary for a year, it might not be a bad gig. You can get all the prestige and experience of a clerkship with a federal judge -- then make it up on the back end, by going to a law firm that pays a $50,000 clerkship bonus (roughly equal to or even more than what you would have earned in a year of clerking anyway, assuming you go straight into the clerkship from law school).

We realize we're late to the party on this one. The WSJ Law Blog wrote about it last week. We linked to it today in Morning Docket, but based on the email we've received about it, clearly many of you have more to say about it.

News flash: Wal-Mart is cheap. From the Law Blog:

Before any more law firms match the latest bump in associate compensation, they may want to take stock of this memo issued yesterday by Wal-Mart. [T]he memo raises concerns about the recent increase in associate starting pay to $160,000.

“The salaries that law firms choose to pay their junior associates are none of our concern,” writes Miguel Rivera Sr., associate general counsel for the retail chain.

Oof! But Rivera continues, “Based on the size and frequency of the rate increase requests that we have seen over the past three years, it appears that many of the requested increases are largely attributable to the steady, nationwide increases in junior associate salaries.”...

“We are today announcing a moratorium on across-the-board rate increases. Until further notice, we will only consider reasonable, individual requests for rate increases for those attorneys in your firm who are performing at an exceptional level and whose experience and knowledge is adding substantial value towards meeting Wal-Mart’s legal objectives.”

Update: Due to your requests, we've placed the rest of this post -- which includes a rather disgusting picture of diseased feet, so consider yourself warned -- after the jump.

That's the debate currently raging in the Los Angeles office of Skadden. It was triggered by some exuberant, multicolored emails from a Gay Colleague, promoting the Skadden LA AIDS Walk team.

From the delicious (but sporadically updated) Skadden Insider:

[T]he e-mails weren't well received by everyone because "they are pretty aggressive and unprofessional. Just the tone of voice, the five thousand colors, the naming of names of who contributed and who didn't."

Our source continued: "And of course, some ignorant fools are going around saying, "I don't go around calling myself the 'straight associate'! Anyway, it was pretty funny. It was a gay gay gay Friday."

Check out the full post, which reprints the (literally) colorful email, over here.

And read about another instance of public shaming at Skadden, after the jump.

Toe up, that is. After our recent post about WilmerHale having "issues," multiple sources wrote in to tell us that the firm's Baltimore office is closing, effective January 1, 2008.

Once again, the firm ignored us did not respond to our request for comment (which we, like Robert Novak, don't like very much). If you have more information, about the Baltimore office closing or any other WilmerHale developments, feel free to email us.

Here are two comments that caught our eye in the last WilmerHale thread:

"the original post about the WH employee with cancer is ABSOLUTELY TRUE. this story is not a fabrication. this person DEFINATELY [sic] exists, is back at work, in a different dept, different job. for all of you who dont believe this story, pull your head out of your a***s. wcp has gone to hell, a f*cking billable hr GULAG...."

"WH is a billable hours hell, however the summer associates get wined and dined all summer, boat trips, KenCen, pool parties at partners' houses, free lunches, breakfast sessions, receptions, goodie bags full of WH items. You name it. The support staff that babysits them all summer get diddly. The personality of WCP has changed 180 degrees since merger with H&D, and not for the good. Morale among the worker bees (support staff) is lower than snake s**t. They're even asking long time partners to leave, for whatever reason. WCP used to be based in Washington, now takes orders from the Boston office of H&D....."

A billable hours "gulag" or "hell"? Times sure have changed from the 1930s! Back then, attorneys at WH predecessor firms worked under 1,500 hours a year (but for starting salaries of $1,200). See here.

Attorney Working Hours and Salaries [RumorsDaily.com]

Earlier: What's Up With WilmerHale?

Some time ago, we received this interesting tip, about WilmerHale (in D.C.):

WH continues to go downhill. Why is it that no one ever seems to write or care about this?

I'm an associate and treated fairly well. But the support staff receives brutal treatment. I heard that one of our HR people who almost died of cancer this spring was told that the firm couldn't accommodate her disability because it didn't make "good business sense." She has been here for 13 years, [with] excellent evaluations, and has been fighting for her life. Now she has to fight for her job when her doctor says she still is disabled. She [was] given six weeks by our Chief Human Resources Officer to come back full-time. After one week she was demoted and given no particular reason why.

It won't be long before they treat the rest of us the same way. By the way, lawyers and staff alike continue to leave in droves. Does anyone care that a Washington institution has crumbled into hubris and greed?

The firm did not respond to our inquiry into this item. If you have more info, feel free to email us.

A little more about WilmerHale, including some happy news, after the jump.

Greedy law firm associates view ATL as a helpful resource. But what about Biglaw partners? They're greedy too, y'know.

Well, here's something for all you partners out there. A tipster alerted us to this audio conference, taking place later this month:

*************************************************
IOMA AUDIO CONFERENCES!

ASSOCIATE COMPENSATION:

STRATEGIES TO ATTACK PAY PLANS THAT DRAIN PARTNER PROFITS

September 20, 2007 * 2:00 - 3:30 PM

REGISTER TODAY!
*************************************************

The full conference description, plus commentary, after the jump.

We're delighted to see that ATL has so many readers in ATL. And we apologize for that one time we were mean to you. (We don't know what got into us; guess it was that time of the month.)

This morning's post about the Alston & Bird raise, which will take effect shortly before your kids enter law school, generated robust commentary. It also earned us another shout-out in the mainstream media. From an Atlanta reader:

"Above the Law was mentioned in the Daily Report article on the Alston & Bird raise. In fact, the reporter confronted A&B's hiring partner with some of the comments to your post."

[A]ssociates posting anonymously to the Above the Law blog, a gossip and news Web site about big law firms, were not happy with Alston’s pay increase. They contended that associate pay in Atlanta still lags behind that in other comparable markets, such as Houston and Dallas....

Several blog posters criticized Alston for pay compression, pointing out that the firm is not increasing pay for more senior classes at the same $15,000 rate as for first-years.

“A&B did raise today. Starts at $145K, tops at $190K. So much for solving compression. Folks are devestated [sic],” wrote “Anonymous” a scant hour after Alston announced the increase last evening.

“First years get a 15K raise. I get 5K,” groused another.

When told of the comments, [A&B hiring partner Jonathan W. Lowe] responded: “If this is true, I am certainly disappointed to hear that our associates are unhappy with this pay raise. We try to determine what the market is with respect to associate salary in each of the cities where we have offices, and this was our best effort at determining the market in Atlanta at this time.”

We agree with our reader's take on on Jon Lowe's response:

"His reaction to the negative comments seemed to catch him off guard. You almost get the impression he expected to hear only the sound of Cristal corks popping."

But hey, A&B associates, it's not all bad. Remember the firm's special generosity, back in May?

If this isn't ringing a bell, your recollection may be refreshed by two emails, reprinted after the jump.

A quick reminder: We want your memos. We hear rumors of associate pay raises at particular firms all the time, but we generally don't treat the news as official until we see a memorandum (assuming there is one). Please send them to us by email.

We reprint below two memos that arrived in our inbox not too long ago. First, there's a memo from LeBoeuf Lamb, placing their associates in Hartford -- recently covered here -- on the $160K scale.

Second, there's a memo from Foley & Lardner. It has raised its starting salary to $160,000, but not effective until September 2007, and it's not following the standard $160K scale all the way up the ladder. Our source wrote:

Attached is the memo Foley & Lardner circulated today regarding adjustments to compensation. This was circulated a day after a separate memo from management announcing the increases and advising that management would review compensation prior to the beginning of the next fiscal year and would consider making modifications to amounts and structures at that time.

Management also referenced in the memo "exploring alternative career paths for associates," but provided no additional information as to what that means.

Sounds a tad Orwellian to us. "Alternative career paths" = flipping burgers in the Foley cafeteria? But maybe we're just being paranoid.

If you're interested, you can check out the memos after the jump.

From the Department of Astute Observations:

"Some former Steel Hector partners suggested it may have been unwise to make a large loan to a partner allegedly on the brink of bankruptcy."

Ya think?

Firm Sues Estate of Dead Lawyer for Loan Repayment [Daily Business Review (Miami / South Florida)]

Over the next few weeks, hordes of summer associates will arrive at top law firms around the country. And many full-time associates -- or at least the less harried and/or curmudgeonly ones -- will rejoice, delighted by the opportunity to take summer associates out to fancy lunches, on their employer's dime.

But maybe not at Pillsbury Winthrop. Earlier this month, someone posted as follows, over at Infirmation/Greedy NY:

If you think things are tight in NYC, listen to this: Pillsbury Winthrop (NoVa/DC) just sent out a memo limiting associates to one meal per week, "and in no event should meals cost more than $15/person."

I s**t you not, they actually sent out that memo this afternoon!!!!!

We haven't verified this rumor; maybe it's apocryphal, or a joke. But if it's true, please file it under "hilarious" and "pathetic."

On a budget of $15 a head, you can maybe dine at Au Bon Pain or Cosi. Just don't indulge in (1) a cold beverage with your meal, AND (2) a post-meal coffee drink.

If you can confirm, or have a copy of the memo to share, please email us (subject line: "Pillsbury Winthrop Is Cheap"). Thanks.

(We wouldn't be completely surprised if this rumor is true. After all, Pillsbury Winthrop is one of the firms that is publicly dragging its feet on associate pay raises.)

Update: Lots of dispute in the comments over the accuracy of this rumor. We will gladly accept corrections and clarifications by email. Please provide us with your real name; we keep our sources anonymous, but we need real names so we can confirm that you actually work at Pillsbury.

One thing we can confirm, from a verified source in Pillsbury's San Francisco office:

I am an associate at Pillsbury and just read the posting about Pillsbury lunch limitations to $15 once per week. It's not true! Of course, we can take summer associates to lunch as often as we like, and they ask that we keep it to $25 per person, but can exceed that for special occassions.

But the rumor in question concerns Pillsbury's offces in northern Virginia and Washington, DC -- not San Francisco. If you work in one of those offices, we would be especially interested in hearing from you. Thanks.

Further Update: The consensus in the comments appears to be that the rumor of a $15 lunch limit IS true, but ONLY for northern Virginia (Tysons Corner).

Cheapest Lunch Date EVER? [Infirmation / Greedy NY]

Earlier: Nationwide Pay Raise Watch: In a Holding Pattern?

In response to our coverage of "Sectiongate" up at Harvard Law School, one commenter wrote:

To see how dumb this topic is, imagine replacing "Harvard" with "Boston University."

Yes, that would be dumb. Because Boston University School of Law has its own stupid pseudo-scandal, and it's not Sectiongate. Say hello to... Bagelgate!!!

Date: Tue, 6 Mar 2007 17:24:00 -0500
From: BU Law Student Affairs
Reply-To: BU Law Student Affairs
Subject: Journal issue
To: [1L, 2L and 3L classes at BU]

Dear Students,

We wanted to ask your help with an issue that may seem minor but is causing understandable frustration. Our law journals often collect dues from the members for certain things such as refreshments for the morning since they spend so much time in the journal offices putting out the journal books.

Unfortunately, one of the journals which has an office in room 545 has noticed that often students who are not journal members find their way into the office and take refreshments that the journal members have purchased with their journal dues for journal members. This may reflect a misunderstanding on non-journal members' parts, in that students might think the school is paying for the refreshments.

However, that is not the case -- they are paid for out of journal member dues and are only for the journal members. We greatly appreciate your assistance in refraining from going into the journal offices and partaking of refreshments that are for the journal members and paid for by their dues.

Many thanks!

In other words: Thank You For Not Stealing.

Before some of you start railing against the caste system that unfairly separates law review members from the rest of the class -- showering the former with lucrative law firm jobs, coveted clerkships, and free breakfast food, while shafting the latter -- we should note that the bagel-raid victim was not THE law journal, i.e., the Boston University Law Review. We're told it was the Journal of Science and Technology Law.

So there is no broader social lesson to be drawn here -- other than that law students like free bagels.

(We realize that Bagelgate, like Sectiongate, is "dumb" -- and that's why we like it. We have a weakness for the ridiculous, the petty, and the inane -- especially when law schools are involved. See, e.g., the mystery smell in the NYU Law library, and the sex-in-the-stacks scandal at Washington University Law School.)

We now have some reliable intelligence about yesterday's Vague and Unsubstantiated Rumor About Paul Hastings.

Here's the original rumor:

"Apparently today an entire department at Paul Hastings LA (attorneys, assistants, etc.) got escorted out of the office by security. No concrete details have surfaced yet."

As it turns out, reality is considerably less exciting than, say, the sacking of a half-dozen U.S. Attorneys. Here's what actually happened:

"Sources confirm that a group of secretaries was terminated. No attorneys were laid off, and it wasn't department-wide."

More detail from a tipster at the firm:

PH went to 4:1 ratio of attorneys to assistants nation-wide; it used to be 3:1. Headcount was eliminated mostly in LA and DC offices. No attorneys were eliminated. Pretty funny rumor though...

The partnership has not explained why they made the switch. Maybe it's to reduce salary to pay for our bonuses next month? LOL.

The funniest/sickest part was that the announcement came at approximately the same time the memo regarding firm revenue (up 21%) and PPP (up 22%) was distributed.

Crappy timing indeed. And one assistant for four lawyers strikes us as suboptimal, too -- at least for private practice.

(When we were at a firm, we shared an assistant with one other lawyer. It wasn't until we entered government work that we shared an assistant with four other attorneys.)

Earlier: Breaking: Vague and Unsubstantiated Rumor About Paul Hastings!

We've been covering the latest round of law firm associate pay raises largely from the perspective of the associates. But what about the people who have to pay for all this largesse: the partners?

Several recent articles offer a partners'-eye-view of the compensation arms race. We've collected the links below.

Despite the cheery announcement memos they've been sending out, partners aren't happy about having to cough up more dough. From New York magazine:

[I]t’s estimated that at a big firm like Simpson (which has about 500 associates and 155 partners), average per-partner profits run about $2.4 million a year. To pay for this raise, each partner will take an approximate personal hit of $40,000 to $70,000 a year. “It’s horrible,” said one partner at a big firm.

Horrible indeed! For that kind of dough, you could get ten bespoke suits, a decent luxury car, or a house in the Hamptons for a month.

But before you start shedding tears for your benefactors, dear associates, consider this information, from the National Law Journal:

[C]omparisons from 1996 to 2005 indicate that as partners have made more, first-year associate salaries have not kept pace.

At law firms with 501 attorneys or more, median associate salaries were $125,000 in 2005. At the same time, profits per partner at the nation's 100 highest-grossing law firms in 2005 averaged $1.07 million.

Consequently, associates were making 11.7 percent of the amount partners pulled in for 2005, the smallest percentage in the last 10 years.

By contrast, associate salaries in 1996 at the nation's largest firms equaled $70,000, or 14.3 percent of the profits per partner, which that same year averaged $489,753 among the Am Law 100, the 100 highest-grossing firms.

As we wrote in these pages back in August (which feels so far away right now, given the snow and freezing temperatures):

"Associates of the world, unite! You have nothing to lose but your Blackberries."

But revolution may not be necessary. Things may get better naturally on their own. From the NLJ piece:

William Johnston, a vice president of Hildebrandt International, a law firm consultancy, expects the gap between associate salaries and profits per partner to narrow in the next few years.

"Overall profitability will start to plateau," he said. In addition, law firms will continue to feel the pinch for qualified law school graduates from their own competitors and from hedge funds and investment banks offering attractive alternatives, he said.

Firms must also compete with the opportunities offered by insider trading. If you do it right (and don't get caught), you can earn profits that make $160K look like a pittance.

The Partner Tax [Intelligencer / New York Magazine]
Starting Pay at Top Firms Falls Farther Behind Partners' [National Law Journal]
In the Law-Firm Pay Race, Who’s Really Ahead? [DealBook / NYT]

We like your idea of drawing up a list of major law firms that have not (yet) joined in the latest round of associate pay raises.

Such lists have been floating around in the comments over the past few weeks. But we thought we'd try and prepare an "official" LIST OF SHAME.

Law students, law clerks, and potential lateral associates:

When thinking about whether or not to accept an offer from a particular Biglaw shop, consider whether they appear on the List of Shame -- along with all the non-compensation-related variables that should be considered when choosing a firm.

But do hold their presence on the List of Shame against them. That's why we call it the List of Shame!

After the jump, our stab at a List of Shame.

Yesterday we invited those of you with firsthand knowledge of Aaron Charney to share what you know with us -- whether pro- or anti-Aaron. We received some absolutely intriguing responses.

Neither of these comments is "firsthand firsthand," so please file them under "rumor" rather than "news." But they are both extremely interesting.

Both are somewhat negative about Charney. But, interestingly enough, they support different responses to this question:

Who is the real Aaron Charney: a crusader for justice with a sincere belief in his cause, or a money-hungry opportunist seeking to shake down his former (and deep-pocketed) employer?

The first comment we received:

I have a friend who knows Aaron Charney -- and could not STAND him. Aaron is one of those people who is very opinionated, to a fault, and unnecessarily combative.

Once Aaron almost got into a fight with someone over -- get this -- a seat at a CLE presentation. Aaron was firmly convinced that the other guy had stolen "his" chair. The argument almost escalated into fisticuffs. Over a f***ing seat at a CLE seminar.

I'll spare you the stupid details. But you get the picture. Aaron is easily offended, firmly convinced that he is right in all things, and willing to go to the mat for them.

Although negative, this comment does support a picture of Charney as someone with a genuine (some might say narcissistic) belief in his cause. It suggests that Charney truly thinks that he has been wronged -- and that S&C must be brought to justice.

Here's the second, even more juicy comment:

Here's the reason Aaron went pro se. Aaron retained a lawyer initially and had bargained with S&C for a settlement, but he wasn't happy with the amount of money they were offering him. So he fired the lawyer, thinking that a small amount of money would be bigger if didn't have to split it.

But apparently, after Aaron fired the lawyer, S&C withdrew the offer. That's when Aaron decided to escalate things by going public.

WOW -- this is FASCINATING!!! If you can provide further confirmation, please email us. At this point, it's just rumor.

But we wouldn't be surprised to learn that it's true. It would explain a lot:

(1) the mysterious period in between the initial incident of alleged harassment, in May 2006, and Aaron's filing a pro se Complaint in New York Supreme Court, in January 2007;

(2) Aaron's general skittishness about discussing his prior representation (and the circumstances of its termination); and

(3) S&C's initial statement that it rejected his demand for a "multi-million dollar" settlement (i.e., they were willing to fork over a few hundred grand, but not seven figures).

Let's say that the "small amount of money" was a few hundred grand -- which, after you take a third of it out for fees, doesn't go very far. This is especially true if it results in you leaving your firm under mysterious circumstances, thereby impairing your ability to land another Biglaw gig. So perhaps Aaron thought that he could go it alone, "cut out the middleman," and save himself some dough (maybe $100,000 on a $300,000 settlement offer).

Unfortunately for him, Aaron may have miscalculated. After he dropped his counsel, S&C yanked its settlement offer. So it was erroneous for him to assume that he could have gotten an identical settlement offer without being represented by counsel (and coughing up fees to said counsel).

Then, after going commando pro se, Aaron arguably erred again. He played his cards too quickly, launching a public relations blitzkrieg. He broadcast his allegations against S&C, down to the tiniest detail, to the largest audience possible. Obviously that pissed off the S&C partners, presumably hardening them against settlement.

Now Charney finds himself in a difficult position. Because S&C has filed a countersuit, he's a defendant as well as a plaintiff. He could end up paying a settlement rather than receiving one.

And once again, Charney has lawyers -- a whole team of them, at two different firms. His net recovery, if any, will be reduced substantially to pay their fees. His original goal, eliminating the middleman, has clearly been frustrated (unless they're handling the case pro bono -- and we have no reason to believe they are).

So today Aaron Charney is arguably worse off than before, when he first hired a lawyer. Now he faces an angry and antagonized defendant -- one of the nation's biggest and richest law firms, with nothing to lose at this point.

Charney has spread his dirt about Sullivan & Cromwell far and wide. He no longer can engage in blackmail derive leverage from potential disclosure of that information; he has shot his proverbial wad. At this point, having been reduced to a Biglaw "Punchline of the Month," S&C may have decided that it needs to fight back, take this thing to trial, and steamroll Aaron Charney.

To put it another way, in terms of his S&C scuttlebutt, which was his main bargaining chip, Aaron Charney may have "opened the kimono" prematurely. In fact, he arguably went much further:

"Aaron Charney opened the proverbial kimono, then flung it to the ground. He gave the world of Biglaw an enthusiastic, multimedia lapdance. Finally, he 'bent over,' and closed his act by dramatically producing a Lionel train set from his 'special hiding place.'"

Aaron Charney, you got greedy. Then you made S&C mad -- very mad. And now they will make you pay.

(Caveat: That preceding sentence -- included for stylistic reasons, to give this post the requisite punchy conclusion -- assumes the truth of rumor #2. As noted at the outset of this post, however, at this point the story is only an allegation. It's just hearsay, mere rumor. You can believe or disbelieve it; it's your choice. We're just passing it along to you for your consideration, as we have previously passed along a great deal of pro-Aaron information.)

Update (12:28 PM): The WSJ Law Blog has an interesting post up about Aaron Charney's ability to land another Biglaw gig.

Earlier: Prior ATL coverage of Aaron Charney and Sullivan & Cromwell (scroll down)