While law firms once had economic incentives to keep allegations of misconduct quiet, the same incentives now push them to take bolder action.
By Dan Packel
In a span of two weeks earlier this month, both Mayer Brown and Orrick, Herrington & Sutcliffe showed the door to partners over what the firms described as inappropriate personal conduct. What’s more, they weren’t secretive about their actions: In statements provided to press, the names of the partners were acknowledged, and both firms said they were acting to protect their “values.”
Credit the #MeToo movement. Several years ago, law firms might have handled such cases far more quietly—perhaps with a confidential settlement. At K&L Gates, for example, an ALM investigationfound a pattern of such settlements between the firm and women who alleged sexual misconduct and discriminatory behavior between 2002 and 2012.
New York employment lawyer Douglas Wigdor said in the past cases brought by his clients against law firms had resulted in confidential settlements, while those tagged with improper conduct remained partners in their firms. But things have changed, he said.
“Now, with these cases and others, the alleged wrongdoers are terminated and pushed out,” he said. “Law firms are now understanding that it’s a serious liability to have someone going to work as a partner or employee who’s engaged in this kind of conduct.”
The public firings suggest a new calculus, not necessarily a moral awakening.
“Firms are really concerned about bad publicity. They realize how interested the press is about this issue,” said Minna Kotkin, a professor of law at Brooklyn Law School. “One woman who comes forward can do a lot of harm, both for retaining clients and recruiting new lawyers.”
That’s altered the cost-benefit analysis for firms, which in the past may have been willing ignore evidence of misconduct, protect their rainmakers and keep fees flowing in.
If money explains why firms were willing to sit on their hands in the past, it also explains why they’re taking action now, according to Wigdor. They face “significant ramifications,” not just liability to the person who’s come forward, but the economic repercussions of clients heading elsewhere.
This dynamic is magnified by the fact that even prior to the rise of the #MeToo movement, many multinationals and banks had grown more attuned to the consequences of letting individuals accused of sexual misconduct and harassment stay put and were quicker to take steps to cut ties with them. These businesses are likely to have the same expectations for their outside counsel.
“You would think law firms would be leaders in this area, but unfortunately, they’re not,” Wigdor said.
Signs of change
The changing incentive structure doesn’t mean that the pivot is easy for firms. ”I think it’s taking a lot of serious conversations,” said Gwen Mellor, a partner with the Zeughauser Group.
Continue reading: https://www.law.com/americanlawyer/2019/03/28/as-mayer-brown-orrick-oust-partners-signs-of-a-post-metoo-standard/
