Full text of Clifford Chance memorandum

Published: October 25 2002 21:13

(This internal 13-page memo was sent by a group of six of Clifford Chance's 430 junior lawyers in the US to the firm's New York partners.)
TO New York Partners
DATE October 15, 2002
FROM
cc New York Associates
RE Associates' Concerns

This memorandum manifests the commitment of the associates of Clifford Chance US LLP to join the discussion on how to improve the quality of life for associates at the firm. The memorandum incorporates comments that associates made in a Town Hall meeting on Tuesday, October 8, 2002 (attended by approximately 140 associates), responses that associates drafted to a survey that the Personnel Committee distributed last week (as of Monday, October 14, 2002, approximately 120 associates had responded) and discussions Personnel Committee members had with many associates in the firm.

The memorandum proceeds in several parts.

Part I provides an overview and sets the context for the comments that compose the substance of the document. Part II identifies seven major problem areas at the firm: (a) the 2420 billable hour requirement, (b) the assignment system, (c) reviews, (d) poor communications, (e) pro bono, (f) partner indifference, and (g) insufficient training. Part III lists a series of other issues that we believe provide fertile ground where your attention will find purchase. Part IV articulates a list of concrete quality of life improvements that the firm should consider in the immediate term and that would probably have long-lasting benefits. Part V notes areas in which the associates believe the firm is already doing a good job. Please read this memorandum as a single response. Though the memorandum contains separate sections for convenience, we believe that many of the issues are interrelated and affect each other.

1. Overview:

The associates believe the firm's abysmal, last place ranking in the October 2002 American Lawyer "Associates Survey" (the "Am Law Survey") revealed a profound problem at Clifford Chance. In the survey, we were ranked as the worst firm in the country for associate satisfaction. Our prize was a profile under the title "In the Cellar." The magazine juxtaposed this "profile" of our firm against the "Most Improved" firm, Irell & Manella. In addition to being ranked last overall, we finished in the bottom six in ten categories (all numbers are out of 132): (a) treatment by partners (127); (b) how interesting work is (131); (c) training and guidance (132-last); (d) atmosphere at the firm (127); (e) communication re: partnership (132-last); (f) realistic billable hours (132-last); (g) attitude toward pro bono (131); (h) likelihood of staying at least two years (129); (i) if I had the choice all over again, would I come to work at this firm? (132-last); (j) most anxious midlevels (132-last). American Lawyer, October 2002. pp.101-139.

Clearly, that is terrible. Nevertheless, our research has convinced us that the Am Law Survey captured neither the breadth nor the depth of associate anger and frustration. Consequently, we am concerned about the associates' incipient reaction to two emailed messages announcing the focus groups (one from Jim Benedict and John Carroll and the other from David Taub). Though the associates collectively appreciate firm management's commitment to address the concerns of midlevel associates, many associates feel that the decision to have the outside consultant, Arnold Kanter, and his team meet initially with only third and fourth-year associates represents part of the problem and not the solution. Many senior and junior associates expressed feeling excluded from the process.

We are also concerned that the firm is looking for a "quick-fix" to salvage the 2002 recruiting season and forestall mass resignation by associates. The associates also want to attract top students to the firm and we certainly do not want to see any more of our friends leave the firm. We believe that this can be the finest law firm for associates in the world. Together we can create a business model the likes of which the profession has never even conceived, let alone ever saw.

Let us help you construct the ideal firm. If you include us in the process and share information with us, we can achieve this goal. You have assembled a stunningly talented team of associates. We have trusted you with our development, our security and our careers. Thus, obviously we believe in you. But it is time for you to start believing in us as well. Treat us like colleagues. Treat us with respect. Treat us as future partners.

Coming in last in the Am Law Survey hurt all of us. Nevertheless, let us turn that censure into a positive development. We can learn from the highest ranked firm, Alston & Bird. According to The American Lawyer, in the mid-nineties, Alston & Bird usually finished between the middle and the top top of the list of Atlanta firms (let alone nationally) in the Am Law Survey. The American Lawyer, October 2002, p,109. Respondents there, however, "complained about long work-days and pressure to rack up billable hours" and the firm chose to act. Id. The managing partner hired a consultant to instruct practice group heads in management techniques and "it paid off: Today associates at Alston & Bird work as long and hard as those at most other top firm - 2,000 to 2,100 hours a year . . . - but report that that they are pleased with their working conditions." Id.

Clearly, we can also improve. Reading this memorandum and responding to it will be part of that process. We realize that the contents of this document may upset or surprise you. Please realize, though, that the purpose of this document is to help you. This firm means a great deal to us. Please join us in making it the greatest place to work in the country.

II. Major Problem Areas

There were seven major areas of discontent: (a) the 2420 billable hour requirement, (b) the assignment system, (c) reviews, (d) poor communications, (e) pro bono, (f) partner indifference, and (g) insufficient training.

A. The 2420 Billable Hour Requirement

The 2420 billable hour requirement angers, worries, and harries virtually every associate in the firm. Comments in the Personnel Committee surveys and the Town Tall meeting about the requirement constituted the greatest area of discontent by far. Indeed, only a handful of surveys did not mention the billable hour requirement as a problem at the firm.

Associates stated that the requirement is profoundly unrealistic, particularly in slow areas of the firm. Moreover, associates found the stress on billable hours dehumanizing and verging on an abdication of our professional responsibilities insofar as the requirement ignores pro bono work* and encourages "padding" of hours, inefficient work, repetition of tasks, and other problems. Associates expressed concerns that the requirement promotes misallocation of work to senior associates who "need" the hours when less expensive junior associates could do the work. Associates also stated that partners care only about associates' billable hours.

Associates felt that the additional 10% of "soft billable" hours above the 2200 hours of "hard billable" was not actually counted in any meaningful way, but was rather a stick to coerce associates to do work for which they would receive no remuneration.

Associates also mentioned that few other firms (and none of the firms that management has identified as "peer firms") have articulated billable requirements. A perception exists among associates that our peer firms pay a full bonus to at least the vast majority of associates, regardless of billable hours.

Associates' comments included:
  • The billables requirement "encourages padding."
  • The requirement "makes me feel that management cares exceedingly about hours billed, but gives no thought to the quality of my work, let alone my career development."
  • "If you can't afford to pay what other firms are paying, admit it."
  • "Be a market leader with respect to compensation."
  • "The firm announced a 'Cravath' bonus, but only paid the full amount to what seems like a small percentage of associates." * Over half of the repsondents stated that they felt pro bono should count towards any billable requirements. See Below
  • "The billable hours requirement makes the enormously unhappy and mainly contributes to my negative feelings about the firm . . . The idea that I could work hard all year and bill for example 2100 hours . . . and in the firm's eye I wouldn't even meet the firm's 'expectations' is totally ludicrous, offensive, and generally makes me crazy."
Suggestions to rectify this problem were divided about 55% / 45% between people who felt that high quality work and hard work should be rewarded, and those people who felt that bonuses should be received by all associates. It is often convenient and easy (and perhaps fair) to use billable hours as a measurement of how hard an associate worked. If, however, the criticism about the assignment system is correct (see below), then those who have high billable hours may have benefited from a form of "unjust enrichment" or those with low hours may been the victim of discrimination or neglect. Thus, this memorandum advocates that the firm use the term "worked," which includes billable hours and other hours.

The group that advocated a bonus based upon hours worked stressed that those who gave more to the firm than others, should receive more than others receive. The following two plans represent the idea that the "no full bonus to everyone" group had in mind: (i) Have a multi-tier system in which an associate receives 50% bonus at, say 1800 hours worked, 75% bonus at, say 1900 hours worked and 100% bonus at, say 2000 hours worked; (ii) assign point values to three things: an associate's personal performance (qualitative, say 33.3 points), that associate's hours worked (quantitative, say 33.3 points) and the firm's overall performance (quantitative, say 33.3 points). Bonuses would then be calculated using these three clear criteria, and the calculation would be discussed at the associate's review.

Those who advocated full, across the board bonuses stressed that this is one firm and that all should be treated equally. They state that out alleged peer firms appear to pay the majority of their associates the same bonus. They also stress that work allocation problems prevent many associates from billing as many hours as their putative peers.

Ways exist to reconcile this debate and please both camps. The firm could adopt the suggestion of many associates and include hours that demonstrate one's commitment to the firm (including, pro bono, recruiting, mentoring associates, working on articles and client development, serving on a committee, attending development and training courses, community service). Indeed, including these hitherto "Associate Non-Chargeable Time" hours (a.k.a., the "100000" hours) and pro bono hours would be a way to reward those associates who follow the instructions that Jim Moyle gives to all new hires and summer associates and "demonstrate a commitment to the firm." Given that the firm does not have enough work for all associates to bill 9-10 hour days, five days per week, counting all of an associate's time encourages her to contribute to the firm in any way that she can.

Many associates also suggested that is the billable requirement is not eliminated, it should be reduced to around 1900 or 2000 hours worked.

B. The Assignment System

A majority of associates who responded to the Personnel Committee surveys complained about the assignment system. Associates criticized the process throughout the firm, though corporate associates complained more about structural impediments and litigation associates portrayed a sense of almost chaos and abdication of authority. Indeed, many litigation associates (and a still sizable number of corporate associates) stated that they felt totally ignored when seeking assignments or help with matters on which they were working. There were many complaints about unanswered calls, and emails deleted without a reply.

Comments included:
  • The assignment system is an "old boys' club."
  • "The assigning process is largely a mystery and work seems to be doled out on the basis of favoritism."
  • "If the assigning system isn't corrupt, ask yourself: why aren't attractive female associates ever out of work?" (emphasis in original)
  • The firm feels "like a fiefdom" or a loose confederation of independent states. One cannot take an assignment that does not benefit the feudal lord of his department.
  • "The whole business of getting assignments in litigation revolves around 'schmoozing' the people who can give you work. For me, the person I was expected to schmooze to get work on one of my cases is a snake. Not only is he dishonest, but he behaves completely inappropriately with female associates working under him. I wasn't willing to 'schmooze' him and missed out on a lot of good assignments."
  • The new corporate rotation makes one associate in the class of 2001 feel like a "sacrificial lamb." Another class of 2001 corporate associate commented that the new program "is particularly frustrating, given that partners sound genuinely committed to figuring out what the firm can do to improve our experience here, that at the same time they are putting our entire year of corporate associates into an extremely difficult position while seeming to be oblivious as to what they are doing and how desperate many of us are becoming to get out of this situation as soon as possible. A good deal of this concern and desperately low morale could be relieved if we could get a true commitment on the option to try another group if we so desire after the first year. . . . I understand by our third year we may not be the ideal candidates (from an economic standpoint) for a rotation, but this is our careers we're talking about. The disadvantage to us if we are denied the opportunity to try an area in which we think we'd like to specialize is surely far greater than the disadvantage for the relevant product group in taking a MODEST hit . . . for a year on its balance sheet" (emphasis in original).
  • One corporate associate echoed the comments of many and said "I think that something needs to be done about the accounting structure within the corporate group, whereby if a securities associate works for an M&A partner, the M&A partner does not get credit for the time billed by the associate. Thus, there is an enormous disincentive for the partner to work with this associate. Obviously, in a market such as this, the system makes no sense: because M&A is slow, associates should be able to work for other groups needing associates. BUT, even more importantly, it is very disruptive to relationships between associates and partners and between associates and clients. Particularly with the M&A and securities groups having so much overlap and securities partners doing M&A deals and vice versa, to make a junior associate not only pick between the groups, but then, because of the accounting system, be almost guaranteed of being cut-off from the non-chosen groups and the partners/clients with whom they used to have relationships strikes me as being absurd."
Replace the anarchic assignment "system" in litigation with a genuine structure that ensures that all associates get equal access to work. Numerous respondents to the surveys commented that the assigning partner in litigation appears to be simply too busy to handle the requests for work or for assistance, since he does not respond to them. Thus, some associates suggested having each associate in litigation complete a weekly status report.

Other suggestions include: (i) having an assigning person for litigation and one for corporate who does nothing (except maybe reviews, see below) but manage associates' work-load; (ii) a system where junior associates receive assignments only from the firm professional in charge of assignment distribution. This would ensure an even, fair workload for all junior associates.

Associates have also suggested that the corporate department should adopt an accounting system more similar to litigation, whereby there is no internal accounting within the practice groups, or at the very least eliminating such accounting between the M&A and Capital Markets groups since even many of the partners in those two groups cannot clearly be pinned down to one group or the other based on their actual work and transactions.

The combination of the billable hour requirement and the lack of a functioning, fair assignment system leaves associates to scrounge and compete for work. At least one partner has stated that this "system" is desirable. The associates disagree vigorously and ask you to change it.

C. Reviews

The associates believe the firm has zero interest in reviewing their performance and, hence, making them better lawyers.

Indeed, many associates felt that their annual reviews were not only not annual (e.g., John Carroll's group of people were never reviewed), but were not even reviews at all. People remarked that they received no substantive comments about what they were doing right or wrong - or who had a serious problem with their work. In the interests of disclosure, two of the six authors of this memorandum were not reviewed in 2002.

Associates complained that the anonymity of the reviews was a serious defect, since many criticisms only make sense in context. One associate applauded the courage and good sense of a reviewer who told her about his complaint before he submitted it. Associates also indicated that the reviews are too infrequent (even when they do take place).

Comments included:
  • An associate mentioned that "receiving negative feedback for the first time in a review" was a problem. "Criticism of one's work is never easy to accept, but it is a great deal more palatable (and helpful) if it is delivered in the proper time and context."
  • An associate implied that that reviews are meaningless: "despite my consistently excellent reviews, I have been denied opportunities to work on marquee cases in the past in favor of someone who was buddies with the right person or people."
  • "I think that for training purposes, for professional development purposes, and just for overall peace of mind, I wish that I had access to candid information tracking my progress. I understand partners view it as a pain, and reviewing summer candidates/summer associates alone is a little burdensome, but if there could be anything I would change, this would be it."
The associates call on you to improve every aspect of the review process. First, review us more often. Some associates have asked for a review every quarter. Another potential solution would be to give an associate a review every time the associate works more than 80 hours on any single matter.

A practice that has worked well at Alston & Bird, the number one firm, is a requirement that a person completing a review must explain how and how much he has mentored the associate in question.

Many associates also favored upward reviews. This will help associates identify partners, counsels, and senior associates who are failing to meet their obligations to teach and mentor associates. It will also identify those who are doing well. Those who succeed should be rewarded and those who fail should have consequences.

D. Poor Communications

Complaints over poor communications from partners to associates were widespread. Associates felt unsure of what the firm expected of them that year or over the course of their careers, or what the firm even expected of itself. They felt it was unclear if they would be fired unexpectedly. They felt unnecessarily kept in the dark about where the firm was going (both metaphorically and literally), or, in many instances, where the matter they were working on was going.

The surveys indicate that associates feel that partners have little interest in talking and even less interest in listening. The associates depicted partners as aloof. A few surveys even complained about partners not being physically present to the great detriment of the associates, who received no training from that partner.

Specific examples include:
  • Associates mentioned that it bothered them that they read about the 2001 bonus in the media before the firm announced it to associates.
  • An associate mentioned that at the all-associates meeting in June, Doug Benson stated that the firm was going to send a questionnaire to all associates about the firm's office move. Not only does it appear that this was a misstatement, rumors are rampant that the partners have already voted on moving the office to Madison Avenue (and still not announced it to associates).
  • Associates commented about the email that both Jim Benedict and John Carroll signed prior to the firm announcing that John Carroll will be the new managing partner.
To illustrate the lack of communication, associates pointed to the fact that they do not know what career options besides equity partner exits at the firm if any. One possible way to address this issue is to make a concerted effort to share information with associates. Can associates still be named counsel or is this position reserved to chose already named counsel? What is a staff attorney or a non-equity partner? How do associates attain these positions and what do they entail?

E. Pro Bono

Many called the current treatment of pro bono work at Clifford Chance US LLP "a disgrace." Given that the firm has decided to focus on large matters and labor intensive projects such as second request document reviews, many associates believe that the only way associates can got practical "lawyering" training is through pro bono matters. At the all-associates meeting in June 2002, Dick McDermott stated that in "my day we did pro bono because it was the right thing to do." We agree. Nevertheless, with a requirement of 2200 hours, one simply has no time to bill, take a pro bono matter and still have any life at all outside the firm. Indeed, it is a testament to the associates' conviction that pro bono is still "the right thing to do" that anyone here does it at all.

A large percentage of associates believe the current firm animosity to pro bono is deplorable and violates the ethical principles of our profession.

Specific examples:
  • One partner said, "if you want to do pro bono, that's fine, but I don't want to know about it."
  • One associate wrote: "We should 'meet the market' with respect to pro bono credit. Even if we're not going to be market leaders in commitment to community service (although that would be a tremendous morale boost), we are currently distinguishing ourselves negatively(emphasis in original) with a lack of appreciation for pro bono mutters that borders on contempt. It's not just that we're just like other firms on this front. We are particularly and deliberately uninterested in pro bono, which is a significant minus in recruiting - and frankly, in my own perception, of firm culture. I'll be able to make this a major selling point if we grant at least the market average in pro bono credit for minimum hours/bonuses."
Thus, the associates recommend that the firm demonstrate its commitment to pro bono immediately. If you choose to keep the billable hour requirement, then credit pro bono to that requirement. If you discard the requirement, then make pro bono a component of the associate's review. Remember: we finished second to last in the country in commitment to pro bono!

F. Partner Indifference

Although some associates described good relationships with the partners for whom they work, the authors of those comments distinguished themselves as atypical. Associates stated that many partners have demonstrated a lack of interest in mentoring. There are many partners at the firm that like associates. But, it seems there are many partners at the firm who do not.

In addition, associates believe that many partners have abdicated their responsibility for associate training or even for managing associate life. Partners leave training to senior associates, often having so little contact with junior or midlevel associates that they do not even know the names or faces of the people working for them.

Comments included:
  • The partners "hate" the associates.
  • The partners deeply resent paying the associates' salaries and bonuses.
  • Some partners have lashed out at associates because of Am Law survey results.
  • "Being yelled at and told 'we own you' was also a winning moment."
  • "I remember one instance where a partner introduced himself to an associate at a drinks party not realizing that the associate was (a) in his group and (b) had worked for him for 3 year!"
  • Another associate was invited to a partner's party, then asked by that same partner what he was doing there.
  • One associate wrote in a Personnel Committee survey that if he could change any one thing at the firm it would be "many a partner's attitude and manner of approaching/ working with associates, but that's impossible. They don't seem to really care here."
We disagree about it being impossible, but it will be difficult and will take commitment. One suggestion is to bring in a management consulting firm to train partners. This approach worked quite well for Alston & Bird.

We have sacrificed a great deal to have these jobs (jobs for which we are grateful) and we sacrifice a great deal for you every day. Thus, we would like to see you spend more time with associates. Allegedly, partners have a monthly budget for socializing with associates. We call on all partners to spend it. If you choose to do one thing to improve partner-associate relations, at least say "hello" in the hallways. It sounds like a small thing, but simply talk to us. Get to know the associates; you might even like a few.

G. Insufficient Training

Many associates feel that you are failing to train them to become better lawyers. Indeed, we finished in last place in the nation in this category in the Am Law Survey. Moreover, complaints about inadequate training showed up again and again in the Personnel Committee surveys.

Comments included:
  • "No amount of dull brown bag lunches . . . can substitute for actually learning by doing."
  • Absent partners cannot provide informal training.
  • "There seems to be little effort to involve associates in the 'representation' of clients (as opposed to merely enlisting someone to produce the necessary papers for a transaction)."
Ways exist to train associates. Even if she cannot bill the time, include associates on calls and bring them to meetings. You should also encourage us to use pro bono matters to foster legal skills.

We find it ironic that a British firm ranked last in training. Some of the more junior associates and laterals chose to join the firm exactly because the British influence would encourage training. It appears that we were wrong.

III. Secondary Problem Areas

A. Atmosphere

Many associates described the firm as having a terrible atmosphere in which to work - full of unhappy, hostile people, from the support staff to the partners. One way to fix this is to walk the halls, enter the suites, and spend time with the associates.

Additionally, laterals, clerks, and new hires who were not summer associates have stated that they often feel like strangers at the firm. The firm appears to take a "sink or swim" mentality with these associates, who would be better served by some sort of formal integration system.

B. Lack of a Grievance Mechanism

About one-third of all respondents referred in one way or another to the lack of a grievance mechanism. Many associates either do not know to whom to turn or do not trust the person in charge of a particular issue.

C. Socializing

Many associates would like to see the firm have more social events. This would be an inexpensive way for partners and associates to spend time together. An associate suggested that the firm could sponsor dinners where groups of 10-12 could go out together. The person mentioned that it would be a good idea to have as many groups choose the same night as possible; this would make it more likely that partners and senior associates would be willing to let associates go on the dinners.

D. Lack of a Coherent Firm Culture

Some associates lamented the lack of a coherent firm culture, comparing it to the beloved (to some) Rogers & Wells culture. Others maligned the dissipation of the Clifford Chance culture. Others commented that the firm spends a lot of money on elaborate (and, to some, unseemly) advertising campaigns, but nothing on internal identity issues.

Associates also complained about comparison to "peer" firms (such as Wachtell Lipton, Cravath, S&C, Davis Polk, Cleary, Skadden) that they believe nobody actually considers are currently our peers.

E. Concerns Expressed by Fewer than Five Respondents:

  • Juggling work and family
  • Ineffective secretarial support
  • Being unable to move into better empty offices
  • Recruiting falls to a small number of associates
  • Lack of clear policies for staff/part-time attorneys
  • Poor quality of work
  • Laterals feel isolated
  • Composition of Personnel Committee (too many junior associates)
  • Practice groups should sit together
  • The administrative and secretarial staff is often rude.
  • Unavailability of computers on Sunday mornings.
  • No use of know-how/precedents.
  • Preferring suits to business casual.
  • It is difficult to get assignments in some groups unless you go drinking.
  • Lateral partners tend to yell and behave inappropriately.
  • The "Chance . . . Clifford Chance" advertising campaign is embarrassing, "geeky" and inappropriate for a putative top-tier law firm.
  • Not enough word processing available during the day.

IV. Concrete Suggestions From the Surveys to improve Quality of Life (in addition to those mentioned above):

  • Put plates and utensils in the pantries, so that people working late can avoid eating out of containers.
  • Get an online food delivery system, such as Seamless Web, so that people working late can order food easily, bill it online, and have it delivered to their office. This will save time and annoyance.
  • Have people submit nominations for staff members who have done a particularly good job, draw one nomination at random, announce what was written (perhaps in "Americas Today" or of a firm social) and give the winner $100.
  • Reinstitute the monthly social.
  • Have monthly practice group meetings.
  • Set up a recreation room with a TV. This could also be a place where people could eat meals together.
  • Have monthly Personnel Committee Meetings with associates and partners.
  • Put free fruit and bottled water in the pantries.
  • Bigger refrigerator on 52.
  • Give a modest office-decorating budget. - Get rid of the shabby office furniture and buy ergonomically correct chairs. Many associates have commented that the chairs they have hurt their backs.
  • Get concierge service for things like dry cleaning.
  • Have summer-type social events in other seasons.
  • Reimburse brokers fees for people who move from out-of-town.
  • Free shoe shines.
  • Give out corporate accessories and toys.
  • Give a prize to associates who publish scholarly articles.
  • Let associates who publish articles publish them in their own names.
  • Streamline travel reimbursement.

V. Associates Praised:

  • The LDC program.
  • The technology-sharing program.
  • Subsidized gym membership.
  • No requirement that associates must eat their "post 8:00 p.m." meal at the office.
  • The Diversity Committee and the Diversity Training Seminar. The firm has started to take appropriate steps in this area, but should remain committed to attracting, training and retaining a diverse family of associates
  • The decision to go to business casual dress.
  • Summer Program
  • What seems a genuine desire to improve the quality of life far associates.

Thank you for reading our memorandum. We hope that you will reflect on the associates' concerns. Please remember that the driving force behind this memorandum was the associates' conviction that we can build the finest law firm in the world and move from worst to first.
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