Sullivan & Cromwell

Top Biglaw Stories of 2008: #4 and #3 (Gossip)

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ATL 2008 in review.jpgNow that we’re a few days into 2009, we’re going to pick up the pace in our 2008 round-up posts. Some of you are getting impatient. Complained a commenter: “At this rate, we’re going to get to #1s sometime in June.”

So, onward. We previously wrote about the #5 gossip story in Biglaw. Today we’re going to hit two birds with one stone, announcing the #4 and #3 stories in law firm land (on the gossipy side; the hard news / business stories are on a separate list).

Although they’re not in the top two, these tales were in some respects the most fun for us to cover. Take a trip down memory lane, after the jump.

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Morning Docket 1.2.09

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* London-based law firm Linklaters was the leading law firm in mergers and acquisitions this year, taking the number 1 title from Sullivan and Cromwell. [Bloomberg]

* Former UK attorney general Lord Goldsmith says the UK should take in prisoners from the Guantanamo Bay prison camp if it will help the U.S. close the prison. [BBC News] Australia is not likely to take any prisoners says prime minister Kevin Rudd. The U.S. has asked a 100 countries to help clear the prison. [BBC News]

* Guinea pigs may smell bad but should you go to jail for owning one? Probationers in California could end up in jail for failing to report owning harmless pets like hamsters or goldfish thanks to a ruling by the California Supreme Court. [San Francisco Chronicle]

* A chinese court convicted 11 people for running a counterfeiting ring that “manufactured and distributed pirated Microsoft software throughout the world.” [The New York Times]

* Associates were not the only people in the legal community that were displeased with compensation this year. Federal judges lost their request to Congress for a pay raise to account for inflation. Chief Justice John Roberts says the frightfully low pay for judges threatens the quality of the court. [The Los Angeles Times]

* Life at law firms is not looking good for 2009, sorry to say. Lay-offs and lower bonuses will likely continue in the New Year. On the bright side–less work could help you meet that New Year’s resolution to go to the gym. [The Chicago Tribune]

Associate Bonus Watch: S&C Announces Half-Skadden Bonuses (But May Pay More Come Spring)

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law firm associate bonus watch 2008 biglaw bonuses.jpgSources at Sullivan & Cromwell confirm that the firm is going to pay (deep breath) the New York market rate on 2008 associate bonuses.

We haven’t gotten our hands on an actual memo yet, but our sources are unhappy enough that we believe it to be true. From one S&C associate: “Either the firm is in piss poor shape & Rodge [Cohen] is a liar or we are lemmings and do what Cravath does. Bonus = total BS. People are PISSED.”

Half-Skadden wins. Partners win. Cravath defenders win.

NYC associates lose. Manhattan real estate brokers lose (again). Top billers lose.

Update (6:20 PM): Am Law Daily reports that the firm promised supplemental bonuses in the spring — this time for all classes, not just senior associates — depending on market conditions:

[The S&C] memos also said the firm intends to issue all associates another check in April. The spring distribution, or supplemental bonus, will be based on the firm’s overall financial performance. The firm also issued supplemental bonuses last year, though the circumstances were somewhat different since it was the height of the dealmaking boom.

This past April, S&C’s supplemental bonus was paltry. We reported:

[W]e have confirmed with sources at the firm that S&C paid out its special “senior associate bonuses” last week. We don’t know the numbers for all years, but word on the street is that current fifth-years received around $2,500.

So maybe, if everything goes right, a senior S&C associate will get a little more of a bonus than a first year at Skadden.

So that’s positive, right?

Update (8:02 PM): After the jump, read the full version of S&C’s bonus memo.

BREAKING: Sullivan & Cromwell Bonuses Cut, But No Freeze on Pay [AmLaw Daily]

Earlier: Prior ATL coverage of associate bonuses

Associate Bonus Watch: Sullivan & Cromwell’s Super-Special Bonuses

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S&C Bonus Watch: What Does an Associate Bonus Look Like?

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S&C logo.jpgI think I speak for many ATL readers and Biglaw followers when I ask: when the heck is S&C going to announce its 2008 associate bonuses?

Because the delay is getting ridiculous. It’s December 15th. All of S&C’s peer New York firms have announced already, except for Weil — and historically speaking we can’t expect Weil to move before S&C. S&C has always been a market leader on this matter. What gives?

One tipster puts the extent of S&C’s delay in stark relief:

S&C normally pays our bonus along with our December paycheck. Today, however, my December paycheck posted to my account, but no bonus along with it. Still no announcement from them regarding the change, so this is rather surprising.

It now seems likely that S&C won’t pay a dime of the 2008 associate bonus in 2008. That’s annoying. Essentially, the conversation over at S&C seems to be going like this:

S&C: I got a threshold. I got a threshold for the abuse that I will take. Now, right now, I’m a f**** race car, right, and you got me the red. I’m just saying that it’s f*#^@! dangerous to have a race car in the red. That’s all. I could blow.

ATL COMMUNITY: Oh! You ready to blow?

S&C: Yeah, I’m ready to blow.

ATL COMMUNITY: Well, I’m a mushroom cloud laying mother$^&er, mother@%^&er. Every time [I open my inbox and don't see a fair compensation message], I’m Superfly T.N.T., I’m the Guns of the Navarone!

Get with the program S&C.

Happy Monday.

Earlier: Prior ATL coverage of associate bonuses.

Legal Eagle Wedding Watch 11.30: Softball Diamond

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After another craptasticical week for lawyerdom, here’s your weekly dose of wedding cheer. Unfortunately, like many of the firms we cover on ATL, LEWW has been forced to make some difficult decisions. We had to show one set of newlyweds the door–entirely for performance-related reasons, of course, because LEWW doesn’t do layoffs.

Here are the two lucky-to-survive entries:

1. Lauren Attard and Jordan Schwartz

2. Anna Joo and Adam Fee

Read more about these couples, after the jump.

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Work Slowdown at Sullivan & Cromwell?

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S&C slowdown.JPGWhile the world waits for S&C’s bonus memo, here’s some interesting news from a person with a ground-level view at Sullivan & Cromwell: a contract attorney.

The blog Temporary Attorney has a post up about how the other half is living at S&C. An excerpt:

The economy is bad, so that means that down here at S&C, the clients are starting to dwindle, and the ones the firm has are having trouble paying their legal bills. New cases aren’t starting, which means that associates and litigation analysts don’t have anything to do. That means they’re starting to get the work that contract attorneys usually get.

This means that even “lifer” temps who have been working at S&C are being summarily dismissed, usually with little to no notice that we could lose the steady source of income that we’d come to expect. No notice, no severance. Your last day of earning is today. If you discuss this with lawyers not trapped in the temp system, or with basically anybody not on the inside, the situation smacks of outrageous and patent injustice.

Read the full post over here.

Even during good times, the work of a junior associate doesn’t differ much from the work of a contract attorney. When things are slow, it makes sense to funnel even more grunt work to your highly paid juniors — who have nothing else to do.

And we expect that work is slow all over.

But work is not so slow that it’s going to make S&C think about pulling a Half-Skadden?

Right?

P.S. Speaking of S&C contract attorneys, as we mentioned previously (see the “P.S.”), we’re also working on an item about a former contract attorney supervisor at the firm. We already have multiple sources but would like a few more. If you can help, please email us (subject line: “Sullivan and Cromwell”). Thanks.

Sullivan & Cromwell Update [Temporary Attorney]

How To Get Fired (or Asked To Resign) from Sullivan & Cromwell (Part 2)

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dont be an asshole.JPGYesterday we introduced you to DB (not his real name — please keep it that way), formerly an associate at Sullivan & Cromwell. At S&C, and in law school before that, DB became notorious for bragging about his wealth and making politically incorrect remarks.

We collected some of his impolitic quips in our prior post, and other anecdotes surfaced in the comments (e.g., here and here). For your reading pleasure, here are a few more stories:

  • In law school, at a firm reception in the Time Warner center, DB got drunk and started going on about how he was wearing crocodile shoes that cost thousands of dollars and how his brother drove a more expensive car than the partners at the host firm.
  • At an S&C firm retreat, the same one where he made his comments about the ballet, DB was placed in charge of entertainment for one evening. This included brainstorming for the “S&C Superlatives” contest, which is supposed to feature innocuous, yearbook-style items like “Miss Congeniality,” “Best Smile,” or “Most Athletic.”

    The items suggested by DB? “Sluttiest Partner” and “Partner Most Likely To Sleep With His Secretary.”

  • DB once said, to a highly attractive summer associate he encountered in the hallway, “You really aren’t that hot. Everyone thinks you are, but outside of here you really aren’t.”

    • In fairness to DB, he has his defenders and positive attributes. One tipster describes him as “a bright guy,” and another as “nice in a weird way,” as well as unusually generous and thoughtful at times. A third raves about his hotness, including “six-pack abs and amazing arms.” As for the sexist (and homophobic) quips, they may be best attributed not to malice, but to personal issues that DB is probably still working through.

    His colorful comments, however, aren’t what got DB in truly hot water. Find out what did, after the jump.

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    How To Get Fired from Sullivan & Cromwell (Part 1)

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    dont be an asshole.JPGAh, Sullivan & Cromwell. It’s a top law firm — not just in prestige and profits, but also blog fodder. See, e.g., Carlos Spinelli-Noseda (partner who defrauded firm and clients of half a million dollars through expense fraud); Aaron Charney (associate who sued the firm for antigay discrimination, while still employed there).

    When people leave 125 Broad Street, they go out with a bang. Today, courtesy of several tipsters, we bring you the tale of another former SullCrom employee who departed under less than ideal circumstances. Let’s call him “DB,” short for “douchebag.”

    (To those of you who find the term offensive, we say: if it’s good enough for the Second Circuit, it’s good enough for ATL. Also, we use it affectionately.)

    During law school, DB developed a reputation “as a racist, sexist jerkoff who always flaunted the fact that he was wealthy.” Here’s why:

  • His first words upon meeting his law school roommates: “Hi, I’m DB. I’m independently wealthy.”
  • In a class discussion about price discrimination and consumer choice, he said: “Sometimes when I’m in a real hurry, I am forced to fly coach.”
  • At a law firm reception, he said to the attorneys, “Don’t you miss the good old days when there were no girls at a place like this, except for hookers and strippers?”

    • This charming lad then made his way to 125 Broad Street, where he joined GP (general practice; S&C-speak for “Corporate”) at Sullivan. Now, S&C pays well — in addition to generous base salaries and year-end bonuses, they pay supplemental bonuses to senior associates. But DB was unimpressed:

  • “My allowance used to be bigger than whatever I earn from this place. I feel so poor now that I’m working.”

    • Read more about his rudeness, after the jump.

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    Skadden/DPW v. S&C: Boom Goes The Dynamite

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    wall street bull backside.jpgThe deal between Citigroup and Wachovia fell through, allowing Wells Buffet Fargo to swoop in and pick up the ball Citigroup dropped.

    Citigroup is considering whether to increase it’s bid for Wachovia or sue Wachovia according to the Wall Street Journal. They might also consider crying themselves to sleep on their huge pillow.

    But legal insiders are busy blaming people for the aborted merger between the two commercial banks. The Wall Street Journal Law Blog suggests that Sullivan and Cromwell –counsel for Wachovia on both mergers– attorneys hit the snooze button one too many times:

    We lobbed a call over to Wachovia’s lawyer, S&C’s Rodgin Cohen, to find out. Cohen declined to comment on the record. But in looking for clues this morning, we came across this National Law Journal story entitled, “Crisis mantra for sleep-deprived M&A attorneys: don’t sweat the small stuff.”

    Discussing the feverish pace of three recent billion-dollar bank mergers, the NLJ quoted Cohen in explaining how to put such deals together so quickly: “We all understood, you can’t sweat the small stuff.”

    The Law Blog claims that the “small stuff” might be an exclusivity agreement:

    Citi claims the letter of intent it reached with Wachovia contained an exclusivity agreement prohibiting Wachovia from trying to lure other bidders. …

    An M&A partner at a large New York firm who spoke with us this morning says no. “Quite often, letters of intent don’t include exclusivity agreements.”

    Additional winners and losers after the jump.

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    Former Sullivan & Cromwell Partner Resigns for Defrauding Clients and the Firm (to the tune of $500K)

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    Carlos Spinelli Noseda Carlos J Spinelli Noseda Sullivan Cromwell Above the Law blog.jpgBack in July, we were the first to wonder about the mysterious departure from Sullivan & Cromwell of Carlos Spinelli-Noseda, a rising star at the über-prestigious (and profitable) law firm. Some commenters viewed our interest in his departure as unseemly, prying, or reflecting bias against S&C.

    We don’t mean to gloat — okay, maybe just a little — but we’ve been vindicated by recent revelations. From a report by Anthony Lin in the New York Law Journal:

    A former Sullivan & Cromwell partner has resigned from the bar for billing his clients and firm more than $500,000 in fraudulent travel and entertainment expenses.

    Carlos J. Spinelli-Noseda, a banking and finance specialist who joined Sullivan & Cromwell straight out of Harvard Law School in 1994 and became a partner in 2003, was facing a disciplinary investigation over a pattern of improper billing dating from roughly July 1998 to February 2008.

    In a June 3 affidavit of resignation he submitted to the disciplinary committee of the First Department, Mr. Spinelli-Noseda admitted he could not successfully defend himself against charges of professional misconduct. Such resignations are frequently tendered when further proceedings are almost certain to lead to disbarment.

    Read more, after the jump.

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    Meltdown Fees Trickle In, But Do They Trickle Down?

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    wall street bull backside.jpgAm Law Daily reports that H. Rodgin Cohen of S&C is making serious money as the markets collapse.

    Cohen has been the man in demand by companies struggling to ride out the latest subprime-related rollercoaster roiling the capital markets. His work this past week alone includes advising Lehman Brothers on its limited options prior to filing for Chapter 11 bankruptcy protection on Monday and counseling AIG in its $85 billion bailout by the Federal Reserve on Tuesday. The longtime S&C partner was on a roll even before these events unraveled last weekend–Cohen advised Fannie Mae on its seizure by the federal government on September 7.

    Does that “H” stand for “hurricane?” We’ll see if Cohen brings rain to associates come bonus time.

    We’ve covered a lot of the law firms that are dancing in the ashes of Wall Street. But new winners are emerging everyday. Simpson Thacher advised the AIG board of directors. Millbank, Paul Hastings, Cravath, and Kelley Drye are just some of the firms that are in on the party known as “creditor actions.” And Clifford Chance handled part of Barclay’s acquisition along with Cleary.

    Even government lawyers will get in on the fun, now that Andrew Cuomo doesn’t know the difference between New York State and the power of God.

    It looks like there is going to be a lot of work floating around this fourth quarter as people try to make their hours.

    But it’s not all candy and coke for big firms these days.

    Read about the downside after the jump.

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    A Silver Lining to the Wall Street Cloud: More Work for Lawyers (at Shearman, Sullivan, Wachtell, Weil, etc.)

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    Wall St Wall Street investment banking finance financial.jpgIn case you hadn’t heard, Wall Street is in meltdown mode right now. Our colleagues over at Dealbreaker have been working over the weekend and around the clock to cover all the latest developments.
    Here are the two big stories from the financial world. First, the top-level parent company of Lehman Brothers, Lehman Brothers Holdings Inc., is filing for Chapter 11 bankruptcy protection. (But no sleeping in for Lehmanites; they have been informed that they’re still expected to show up to work this morning.)
    Second, Merrill Lynch, the investment bank that some feared might be next to go down the Bear Stearns / Lehman Brothers path, has reached a deal to sell itself to Bank of America, for $50 billion.
    What do these deals mean for lawyers? Well, at least in the short term, they bring good news: more work. (Over the long term, of course, the news may be less good, as current and potential future clients vanish from the landscape on Wall Street.)
    For its bankruptcy, Lehman is turning to Weil Gotshal & Manges, long known for its top-notch bankruptcy practice. From Dealbook:

    Weil.gifLehman has hired Weil, Gotshal & Manges, the law firm that handled Drexel [Burnham Lambert]‘s bankruptcy filing [in 1990]. Harvey Miller, the head of Weil’s restructuring practice, is known as one of the deans of the bankruptcy bar.

    In addition, Lehman is trying to sell its more valuable assets, including its broker-dealer and asset-management operations. It appears to be represented in those efforts by Sullivan & Cromwell, according to TheDeal.com (subscription).
    Wachtell Lipton Rosen Katz WLRK AboveTheLaw Above the Law blog.jpgMeanwhile, Wachtell, Lipton, Rosen & Katz, a powerhouse in financial-institutions M&A, is getting a piece of the action on the Merrill deal. As reported by the Wall Street Journal, the Merrill / B of A deal was hammered out in “a marathon series of meetings at Wachtell, Lipton, Rosen & Katz, the law firm which has long represented Bank of America in its deals.”
    Shearman & Sterling logo Above the Law blog.jpgWachtell isn’t lending out their offices for free. As TheDeal.com reports, WLRK is indeed representing Bank of America in the transaction (for a fee that will be well into the eight figures — Ed Herlihy doesn’t come cheap). Merrill Lynch is being advised by Shearman & Sterling.
    If you’re aware of other winners and losers from these deals, please share what you know, in the comments.
    Lehman Announces Bankruptcy Filing For Holding Company [Dealbreaker]
    Bank of America Reaches Deal To Buy Merrill Lynch [Dealbreaker]
    What a Lehman Bankruptcy Filing Might Look Like [DealBook]
    Bank of America to Buy Merrill [Wall Street Journal]