We’ve seen a surprising amount of drama emanate from the normally hushed halls of One Liberty Plaza in 2013. Cleary Gottlieb, one of Biglaw’s best firms, has been the site of contention and controversy regarding irate ex-staffers, support staff stealth layoffs, and a summer associate with a dark past.
Some of our Cleary readers and sources have objected to this coverage as painting a misleading picture of goings-on at CGSH. Their general view: all this drama is limited to the ranks of support staff — who have been coddled over the years, and are finally now being forced to be more productive. When it comes to the lawyers at Cleary, it’s business as usual.
Is it “business as usual” with respect to associate bonuses? Cleary just announced….
And, in news that should shock absolutely no one, it matched Cravath’s 2013 bonus scale. Even though it is one of Biglaw’s most prestigious and profitable firms, Cleary tends to follow rather than lead when it comes to compensation.
Last year, Cleary paid out slightly earlier than Cravath, helpful to holiday shoppers. This year, Cleary is copying Cravath’s payment date of Friday, December 20.
How do Cleary associates feel about their bonuses? Said one of our sources: “I side with Elie in the debate on whether these are sufficient.”
A different tipster told us: “Cleary will never lead the market, so it’s not surprising that it matched Cravath. It is a little surprising that it didn’t wait for S&C.”
Indeed. When it comes to challenging the compensation dominance of Cravath, House Shenker (or should it still be House Rodge?) is the strongest contender. Recall that it was Sullivan & Cromwell’s generous 2011 spring bonuses that ignited a trend that spread throughout Biglaw.
With all due respect to Davis Polk and Debevoise, also fabulous firms, nobody expects them to top Cravath. Maybe we could see something from Simpson Thacher — remember that, back in 2007, STB led the charge to a starting salary of $160,000.
But if people like our disappointed Cleary tipster have any realistic hope for better bonuses, they should really be looking to 125 Broad Street.
As for that mysterious partner departure, Kristofer Hess is now a self-described “man of leisure.” There’s nothing terribly unusual about a Biglaw partner taking an early retirement to enjoy his millions. Hess is a bit on the young side for retirement — he’s class of 1997 from U. Chicago — but we hear he has family money.
* “What about devil worshippers?” Justice Scalia may think Satan’s gotten “wilier,” but that doesn’t mean his supporters don’t deserve religious representation in their public meetings. [WSJ Law Blog]
* Speaker of the House John Boehner says that if the Employment Non-Discrimination Act passes, tons of lawsuits will be filed — except that hasn’t happened in states with similar laws. Oopsie… [Reuters]
* Judge Shira Scheindlin isn’t going to just sit there and allow herself to be kicked off the stop and frisk case. In a rare move, she asked the Second Circuit to reverse its ruling and reinstate her. Go girl! [Reuters]
* Quinn Emanuel is welcoming a frequent firm-hopper (from Sidley to Clifford Chance to Cleary Gottlieb) into its ranks in D.C. to join Weil defectors Mike Lyle and Eric Lyttle. Best of luck! [Am Law Daily]
* Gibson Dunn scooped up Scott Hammond, a longtime leader of the Department of Justice’s Antitrust Division. Query just how large the dangling carrot at the end of the firm’s stick was. [Blog of Legal Times]
If so, you’re not alone. We’ve written before about how a legal career can be hazardous for your waistline. In a reader poll asking whether you’ve gained weight during your career as a legal professional, almost 60 percent of you answered in the affirmative (“yes, and I’m tipping the scales of justice”).
So what can be done? Meet a former Biglaw associate who can help you turn things around. Based on her own fit and fabulous physique, this attractive attorney knows a thing or two about getting and staying in shape….
Megan’s story is similar to that of Karen Krueger, the Wachtell Lipton partner who now teaches the Alexander Technique. Working in Biglaw can lead to big health problems, as Megan and Karen both learned before transitioning to their new ventures. Now they help lawyers and other professionals lead better, more balanced lifestyles.
Congratulations to Megan on her new venture, which is going swimmingly so far. Just a few months in, she has already built up a nice network of clients. If you’d like to learn more about her services (and perhaps get a free consultation), check out her website.
Let the “Big” in “Biglaw” refer to your paycheck, not your waistline.
* Do you want to be a partner? These 12 simple rules are a good start. (Not featured: Rule 13. Have incriminating pictures of the other partners.) [At Counsel Table]
* The University of Vermont and Vermont Law School are considering a joint “3-2″ degree program. So if you’re 18 years old and positive you want to grow up to be a lawyer, you may soon have a lower cost option. You’re also probably a tool. [AP via Boston.com]
* Can introverts be solo practitioners? It’s an interesting question, but since Growth is Dead (affiliate link) notes that even rainmakers are tragically lacking in sociability, it’s likely that most lawyers across firms are introverted. [Lawpolis]
* St. Louis University Law School has taken over and refurbished an old building in downtown St. Louis. See, it’s possible to run a law school without spending money on MOAR BUILDINGS! [Urban Review STL]
* A poem about CLE. Wait, are there people not doing their CLE online? [Poetic Justice]
* Matthew Martens, the senior SEC attorney who ran the “Fabulous Fab” trial, is leaving the agency. Possible landing spots for Martens include Kirkland & Ellis; Paul Weiss; WilmerHale; Latham & Watkins; and Cleary Gottlieb. [Wealth Management]
* Even at the top of the in-house food chain, women lawyers are still paid less than their male counterparts. But hey, at least they’re not being forced to cry poverty like their in-house staff attorney brethren. [Corporate Counsel]
* Neil Barofsky, the former King of TARP in the United States, is making the move to Jenner & Block, specifically because as opposed to all other firms, “Jenner took the side of really getting to the truth of the matter.” [Reuters]
* Luxury fashion is fun: four Biglaw firms, including Cleary Gottlieb, Cravath, Torys, and Proskauer Rose, all took Tim Gunn’s mantra to heart to make it work for the $6 billion sale of Neiman Marcus. [Am Law Daily (sub. req.)]
* If you want to try some lawyer, we hear that they taste great when poached this time of year. Speaking of which, Troutman Sanders just reeled in three attorneys from Hunton & Williams. [Richmond BizSense]
* Are you ready for some tax law?! The NFL and other professional sports leagues might lose their nonprofit status if new tax reform legislation makes it through the House and the Senate. [Businessweek]
Yesterday, the drama at One Liberty Plaza continued. A terminated employee rose from the cyber-grave to haunt the living — before he was electronically exorcised by the powers-that-be….
At around 9 a.m. on Tuesday, everyone at Cleary Gottlieb received a lengthy email from an individual we’ll call “HR” (his initials) or “Angry IT Guy.” In his email, totaling about four single-spaced pages, HR claimed he was wrongfully terminated, defended his job performance, and called into question the qualifications and competence of his former supervisors and colleagues. He also offered some thoughts on the stealth layoffs of support staff at Cleary, as well as what he called the “bully[ing]” of staff at the firm.
It seems that the higher-ups at Cleary weren’t fans of Angry IT Guy’s after-the-fact departure memo. Shortly after it was sent, Cleary’s IT department magically deleted it from everyone’s inboxes, including any replies and forwards. “Feels kind of big brothery,” said one of our sources.
Furthermore, any message mentioning Angry IT Guy by name got automatically bounced back to the sender, instead of transmitted to the recipient. When we emailed Cleary yesterday for possible comment, our message, which mentioned HR by name, got bounced back to us with this explanation: “This message violates our email policy.” When we resent our message after replacing HR’s full name with his initials, our message went through.
(Cleary declined to discuss Angry IT Guy, explaining that “[a]s a policy, we do not comment on personnel matters.” We also emailed Angry IT Guy, but he did not get back to us.)
UPDATE (8/9/2013, 9:30 a.m.): After the firm made the message from Angry IT Guy disappear, Sheldon Alster, whose reign as New York managing partner we have discussed before, sent out this email:
We are aware that many of you received an email this morning from a former employee, conveying his perceptions on a variety of subjects relating to his employment by the Firm. It is not appropriate for us to provide a substantive response to that email, but we do wish to assure you that, in all circumstances – including with respect to this employee – the Firm takes very seriously its obligation to treat its employees fairly and respectfully, and to follow the Firm’s written policies and procedures in matters of this kind.
Please do not hesitate to contact me or [Administrator] Kelly Stevens if you have any questions or concerns.
What do we know about HR aka Angry IT Guy? Not a huge amount. One of our tipsters told us that he was a network engineer at the firm who was fired a few months ago and was “freaking pissed” about it. This source described HR as “a nice guy generally, a little full of himself.”
That sounds about right, at least based on his ex post facto departure memo (reprinted in full on the next page, with initials in place of names). The email goes on at great length about HR’s technological knowledge and prowess and describes a number of situations in which HR warned about a problem and was subsequently vindicated. Most of the message amounts to IT inside baseball, but a few sections address broader issues at Cleary.
We’ve previously discussed staff being treated less pleasantly at Cleary, perhaps in an effort to encourage attrition. Angry IT Guy claims to have suffered such treatment:
They attempted to make me quit by stripping me of my responsibilities and isolating me from my tasks in hoping that I would become bored and quit. Unfortunately for them, none of these tactics worked. As to my understanding of the Cleary policies, this should have been deemed a form of harassment. I complained and was told that it was not….
I was forced by KB to work outrageously long hours and when I complained to Human Resources, I was told by KB and DH that because I was an exempt employee, I was to work until the job was finished and I was at the firm’s disposal at ANY given time and there was nothing I could do about it.
Sounds like par for the Biglaw course. It’s worth noting, however, that there’s a fair amount of litigation breaking out these days over whether certain employees are being misclassified as exempt from wage and hour laws. Angry IT Guy might want to consult with an employment lawyer.
We’ve written before about stealth layoffs of staff at Cleary in the past year or so. Angry IT Guy claims that there were such layoffs in the IT department in May 2012. He also alleges that the reductions have targeted older employees and minority employees:
Within the past year and a half, Cleary has eliminated staff over 40 without cause. They have used the excuse of retirement, reduction in staff or any other potentially acceptable reason. The truth is, that the largest percentage of these people were over 40 and 50 years of age, were people of color and supposedly did not fit the new Cleary image. Simply ask around and look at the person that you are aware of that has been released from their role at Cleary. The sorry fact is that the process is not over.
He suggests that age and race might have played a role in his own termination:
Giving everyone involved the benefit of the doubt; I still cannot understand the reason for my termination. When did they decide to outsource me? Was it before I challenged KB’s lack of technical ability? Was it before I challenged the poor design decisions that were costing the firm lots of money because of downtime? Or was it because I was more qualified than KB or ML but I was black and over 40? Yes. I said it. In a real world, I would not have been treated the way that I was if I was young and not African American.
(Cleary Gottlieb, consider yourself lucky. Elie Mystal is on vacation this week.)
It seems that Angry IT Guy was willing to pay the price for the ability to speak out:
I refused the Cleary separation package so that I could not be kept quiet about my experiences and other concerns at Cleary, Gottlieb, Steen and Hamilton. Someone had to be a voice to let the unknowing know what is happening in the company that they dedicate so much of themselves to everyday. I assure you, there is a hidden list of those that are accepted because they are on board with this and those who will be shunned because they refuse to be part of the process.
Cf. Shinyung Oh, the former Paul Hastings associate who wrote in her famous departure memo, “As for your request for a release, non-disclosure, and non-disparagement agreement in return for three months’ pay, I reject it. Unlike you, I am not just a paid mouthpiece with no independent judgment. I will decide how and to whom to communicate how you have treated me.”
At the same time, even while decrying the “bully[ing]” of staff, Angry IT Guy denies any sort of vendetta against Cleary:
[I]n closing, do not let these people bully you. They will only get away with it if you let them. I do not intend to let that happen.
I’d also like to add that I am not disgruntled nor am I trying to get back at Cleary or any of its staff because I know longer work there. I just need for everyone to know what has happened and what will continue to happen if no one says or does anything about it.
So that’s the tale of Angry IT Guy. He might be an outlier in his willingness to speak out about goings-on at Cleary, but he’s not alone in having grievances with the firm. Here’s what a tipster told us about the state of staff at CGSH:
They are really treating us like s**t. Probably attempting to get us to quit. Things like changing schedules, denying us vacation time when we want/need it, nitpicking.
I don’t feel I’m being disloyal at all. They deserve to have their vain butts exposed. I really believe the previous ATL articles have slowed things down sharply, termination-wise.
Terminations might have slowed for the time being, but are they over? Some sources think not. Here are some collected comments:
“The tension at Cleary is intense. Some are petrified they are going to lose their jobs, others are like, f**k it bring it on already…. [T]he associates are worried now. It is really bizarre.”
“Word Processing and Duplicating have been told there is no overtime whatsoever, even if the work cannot get done. It has to be left for the next day. And no temps. Getting the work done promptly has always been the mantra at Cleary since I started working here.”
“Cleary rented two floors at 22 Cortlandt Street about 7 or 8 years ago. They put IT, Billing, Accounting, Records, and Payroll over there. These departments are now being moved back to One Liberty Plaza, but their previous space from years ago has been converted into attorney offices and conference rooms. Some people in WP think their department will be be outsourced; some people in the Library think their department will be eliminated. The move is supposed to occur in September or October.”
Summing up the situation, one tipster told us, “It’s a shame because Cleary was always good to us. The new partners in charge really suck. They just aren’t honest with us.”
We’ll continue to monitor the situation at One Liberty Plaza. If you have information or opinions to share with us, whether critical or complimentary of Cleary, please feel free to email us or to text us (646-820-8477). Thanks.
(Flip to the next page to read Angry IT Guy’s email message in all its glory.)
* Judges on the Third Circuit bench must really ♥ boobies. Breast cancer awareness bracelets can’t be banned by public schools if they aren’t lewd and if they comment on social issues. [Legal Intelligencer]
* A bevy of Biglaw firms were involved as advisers in the sale of the Boston Globe, Newsweek, and the Washington Post, including Cleary Gottlieb, Cravath, and Morgan Lewis, among others. [Am Law Daily]
* After surviving a motion for disqualification, Quinn Emanuel will continue to represent Snapchat. A short video of John Quinn laughing his ass off will be available for the next 10 seconds. [TechCrunch]
* Alex Rodriguez, the only MLB player who will be appealing his drug-related suspension, has hired Reed Smith and Gordon & Rees to hit it out of the park during arbitration proceedings. [Am Law Daily]
* Don’t say we never did you any favors: Here are the top 5 mistakes new in-house counsel make from the perspective of outside counsel. Take a look before you make them yourselves. [Texas Lawyer]
* We saw this coming back in June (seventh item), but now it’s official. Prenda Law has dissolved after posting six figures in bonds for various ethical sanctions. Next step, bankruptcy? [National Law Journal]
We’ve just entered August, so you know what that means: the start of on-campus interviewing season. If you’re a law student researching firms or a lawyer involved in your firm’s recruiting efforts, check out Above the Law’s law firm directory, where law firms get letter grades in different categories. Law firms might look alike on the surface, but there are very real differences between them, as our grading system reflects.
For example, law firms diverge when it comes to diversity. While every firm gives lip service to diversity, some firms have the goods to back up their claims, while others do not.
Let’s check out the latest diversity rankings, from two different news outlets, to see which firms are truly diverse….
Here are the top ten firms for diversity, according to the latest Vault rankings (i.e., the 2014 rankings):
Not much movement here, as you can see when comparing this list to last year’s top ten. Congratulations to Carlton Fields, which took top honors for the fifth year in a row. Congratulations to Ropes & Gray, Littler Mendelson, Debevoise & Plimpton, Jenner & Block, Shook Hardy & Bacon, and Baker Donelson, all of which remained in the top ten. And congratulations to Schiff Hardin, Cleary Gottlieb, Alston & Bird, and Paul Hastings, who broke into the top ten.
Who fell out of the top ten? Three firms, but they didn’t fall far, and they deserve kudos for remaining in the top 25: Paul Weiss (from #7 to #11), Foley Hoag (from #10 to #12), and Fenwick & West (from #8 to #13). You can check out the full list of top firms for diversity here.
Meanwhile, in June, the American Lawyer issued its latest Diversity Scorecard. The Am Law rankings diverge from the Vault rankings because they focus on different factors, as we’ve explained before: Am Law focuses exclusively on the percentage of minority lawyers and partners at a firm, in terms of racial and ethnic minorities, while Vault looks at diversity as it relates to minorities, women, LGBT individuals, and individuals with disabilities.
Here are the top ten firms from Am Law’s Diversity Scorecard (click to enlarge):
Congratulations to Lewis Brisbois, for taking the #1 spot yet again, and congratulations to the other top 10 firms, all of whom made the top 10 last year too: White & Case, Wilson Sonsini, Curtis Mallet, Fragomen, Munger Tolles, Kenyon & Kenyon, Fenwick & West, Bowman and Brooke, and Morrison & Foerster. You can access the complete Am Law list, which ranks 228 firms, over here.
No firm made both the Vault and Am Law top ten lists, but these ten firms made the top 25 on both:
Cleary Gottlieb: #7 for Vault, #13 for Am Law
Paul Hastings: #10 for Vault, #18 for Am Law
Paul Weiss: #11 for Vault, #21 for Am Law
Fenwick & West: #13 for Vault, #8 for Am Law
Munger Tolles: #17 for Vault, #6 for Am Law
Davis Polk: #19 for Vault, #18 for Am Law
Hughes Hubbard: #20 for Vault, #12 for Am Law
Irell & Manella: #22 for Vault, #20 for Am Law
Finnegan Henderson: #23 for Vault, #15 for Am Law
Weil Gotshal: #24 for Vault, #14 for Am Law
Congratulations to all of the firms honored by Vault and by the American Lawyer for their diversity. We’re not quite there yet when it comes to diversity in Biglaw, but thanks to these pioneering firms, we’re getting closer by the day.
For many law schools, the bidding process for the upcoming on-campus interview season closed yesterday. In bidding, schools quite reasonably advise students to select potential employers that align with their aspirations and geographic preferences. For example, the section of the Duke Law web site devoted to OCI admonishes students to “thoroughly research” potential employers and to “focus only on employers in whom you are genuinely interested and that match your career goals.” Presumably, one career goal shared by all law school graduates is to eventually be free of debt. As previously and repeatedly noted, for most, a Biglaw associate position is the only employment outcome which gives the graduate a plausible prospect of paying off his student loans.
So what shapes student perception of large law firms and drives the decision of the law student in prioritizing their OCI bids? No doubt there are unique versions of received wisdom that get passed from generation to generation of students at every school. And of course there are plenty of media entities measuring firms against one another: revenues (AmLaw), “prestige” (Vault), practice area prowess (Chambers) and so on. This being the time of year where Biglaw careers are just starting to be built, we thought it would be interesting to look at how students themselves rate law firms. Which firms are the law student favorites?
The ATL Insider Survey asks law students for their perception of specific firms as potential employers . Below are the top ten rated firms. For comparisons we’ve included the firms’ AmLaw 100 ranking, Vault ranking, and the ATL Insider Survey “Overall Satisfaction” Rating (as scored by attorneys currently working at the firms).
There don’t appear to be any clear correlations among these rankings, though it appears that Vault’s “prestige” rankings hold some sway. One striking disconnect is the appearance of Sullivan & Cromwell and Arnold & Porter in the top ten – both are among the Insider Survey’s lowest rated by attorneys currently practicing at those firms. In any event, congratulations to Cleary on being our student readers’ dream firm. Looking at survey comments we’ve received from practicing attorneys at our three top firms, the students’ positive perception of them as employers finds much support. Although not all the survey comments were this rosy—far from it—the quotes below are representative of a significant swath of insider opinion:
Cleary: The culture is terrific. People are not just nice but also interesting and proactively collegial. The cases, clients, and deals are high-level and interesting. Lock-step compensation means no competition between associates or partners for hours and labor. Open practice groups means the flexibility to gain general expertise in a variety of disparate areas. Hours are long and expectations are high, but it happens in a supportive and friendly environment.
Davis Polk: Best work you can get on the street, but, more importantly, best people to be working with. You’re going to end up being in the office at 3 am one day or the other regardless of which firm you choose, you might as well like the person sitting across from you while you’re there.
Gibson: Gibson Dunn is everything you’d want from a firm, at least relative to its peers in Biglaw: everyone is really friendly and easy to work with, the work is interesting and substantive (I’ve been here 4 months and I’ve gotten to write 2 motions and a section of a brief), the quality of work here is excellent (you really can trust anyone here with anything), it’s flexible in terms of hours and working at home, and the pay is competitive (even starting associates got stub bonuses).
Finally, if you have not yet done so, please take a couple of minutes and take our Insider Survey here.
This year has seen a grim procession of law firm layoff news, which seemed to pick up momentum just yesterday with the Weil Gotshal lawyer layoffs and the Jones Day staff cuts. Are we looking at a 2008 redux, or is this just a bump in the road as the economy makes its slow recovery?
The Weil news was particularly stunning. If any firm seemed poised to thrive in the post-recession “new normal,” it was Weil, with its diversified practices and hegemonic restructuring group. Alas, with yesterday’s news of Weil’s decision to cut 7% of its associates and slash annual compensation for 10% of its partners by hundreds of thousands of dollars, it is clear that Biglaw job security is a thing of the past.
Let’s explore the reasons behind law firm layoffs, review a chronology of recent reductions, and obtain your views through a reader survey….
The reasons for law firm layoffs are legion and intertwined: the ever-increasing commoditization of legal services and the rise of LPOs, client demands for cost controls, the broken “up or out” system, and so on. And of course the law schools are hardly helping, as they continue to churn out new J.D.s without any regard for the current overcapacity or the fundamental structural changes to the profession. In an op-ed in today’s New York Times, Steven Harper blames greed and “intergenerational antagonism.”
Are yesterday’s announcements an anomaly or are they harbingers of things to come? As Lat noted yesterday, most of the year’s layoff news has concerned secretaries, paralegals, and other support staff. Weil might turn out to be an outlier when it comes to letting attorneys go. On the other hand, all those laid-off support staff might be canaries in the Biglaw coal mine. Weil’s move could inspire its peers to perform their own culls.
Here is a chronological look at all the 2013 major law firm layoffs of which we are aware. Obviously some layoffs are stealthier than others, and perfect information on this subject will never be available. If we missed any, let us know:
Obviously, we don’t know how the rest of the year will play out. Let’s hope this grim timeline above will not have to be frequently updated.
What do you predict on the law-firm layoff front? Please take our survey: