Behind The Russell McVeagh Partner Firing . . A Tough & Expensive Call

John Bowie

Give Russell McVeagh in their annus  horribilis one major credit: they “exited” the partner most recently found responsible for bad behaviour with rather more decisiveness than they handled the earlier sexual harassment claims.

The cries of ‘too little too late’ will doubtless be heard far and wide, but the firm has front-footed the latest incident, involving a drunken partner behaving in an oafish and inappropriate manner, by removing him from their number.

And – at the end of the day – removing a high-earning partner who scores high on the firm’s mighty moolah metre is a big call.

Of that, make no mistake.

Malcolm Crotty

In a statement today, firm chair Malcolm Crotty, who must be ruing the day he accepted the seat, said that “the partner  concerned let the firm down and we have now lost trust and confidence in him. The Board determined that his conduct has fallen below our expected standards and we have accepted his resignation.”

The statement issued by the firm today said that the firm had conducted a thorough investigation which had substantiated the complaints and that the partner had apologised and tendered his resignation.

“We are deeply disappointed in the partner at the centre of the investigation,” he said in the statement.

>> The Problem With Jerk Partners

The incident occurred at a firm function for clients where the partner had returned from an out-of-office lunch in an intoxicated state and reportedly had made in appropriate comments to at least one woman.

“Our firm is committed to changing the culture of our organisation and we all recognise that change requires collective and long-term commitment. All partners in the firm agreed to uphold and lead the change.

LawFuel understands that the partner has been involved in previous incidents of poor behaviour  and that on this occasion, notwithstanding the Crotty statement, he was evidently less than contrite about what had happened, showed a poor reaction to being questioned by his partners and/or the ‘investigator’ who reported on the incident, and appeared to show little remorse or understanding of what effect his behaviour had on those affected, let alone the firm as a whole

What will be understood by the firm will be the effect on its bottom line, something that the previous, much publicised sexual harassment situation has already brought to bear.

The tarnishing of the firm’s reputation has probably not significantly affected its bottom line to any great extent, but the ongoing efforts to combat ‘bad behaviour’ will now be having some impact, particularly given the removal of a big name partner with big money power.

The firm recently farewelled constitutional lawyer Andrew Butler, for entirely professional reasons, who left the firm to join Thorndon Chambers.

The shrinking of partner numbers in the firm has been signficant.  In 2005 the firm had 38 partners, being the fifth largest in partner/principal size in the country.  Today it has 33, including its most recent departee whose name has already been removed from the firm website.

The downsizing of Russell McVeagh, described by one leading commercial lawyer as a “super boutique” has continued with some planning . . and some obviously unplanned exits.  The firm, for one, will be hoping the partner-bleeding has stopped – at least so far as bad behaviour is concerned.

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