The recent lawsuit against Kasowitz, Benson, Torres & Friedman by its former head of intellectual property brings into the spotlight a practice that some lawyers might find unimaginable: At several law firms today, the managing partner can unilaterally fire other partners.
Jeremy Pitcock, who led IP at Kasowitz Benson, filed suit against the firm June 5 after his former employer publicized that it fired him last December for inappropriate conduct. In his complaint, Pitcock says that following an inquiry by two partners, name partner Marc Kasowitz called him into his office two days later and fired him on the spot. “Pitcock was surprised at the decision, but he always understood that Marc Kasowitz had the authority to hire or fire anyone at [Kasowitz Benson],” the complaint says. According to Pitcock, the partnership agreement at the firm specifically provides for involuntary withdrawal of partners for no cause.
According to Pitcock’s complaint, Marc Kasowitz has used this authority before. Kasowitz “had previously discussed in front of Pitcock firing other partners … on multiple occasions.” The complaint says Salem Katsh, who in 2005 joined from Shearman & Sterling, where he was head of IP, was pushed out in a way similar to how Pitcock got kicked out. (Katsh, whose bar registration lists him with a New York firm named Katsh & Shapiro, declined to comment.)
Kasowitz Benson calls the lawsuit “frivolous” and says his termination was handled properly. James Cotterman, a principal at legal consulting firm Altman Weil, says the likelihood of having the manging partner in charge of terminating other partners depends on a firm’s age, culture and size. “As a general proposition it is not common for a [managing partner] to have absolute authority, but we have seen it often enough before to not be surprised by it,” Cotterman explains.
One firm that follows a similar model is Bartlit Beck Herman Palenchar & Scott in Chicago, where managing partner Sidney Herman has sole say over hiring and firing. While some lawyers might worry about joining a firm where that type of authority is concentrated with one person, partner Jason Peltz says members of the firm prefer the arrangement since it avoids committees that would sap away from their legal work.
“They don’t need to worry about success at the firm being based on what committee they are on at the firm,” he says. To his knowledge, Herman has never fired a partner, Peltz adds.
More typically, firing decisions go through at least a firm committee if not a vote of the entire firm. In May, when Dorsey & Whitney terminated Toronto-based M&A partner Gil Cornblum for insider trading, the decision was made by the firm’s policy committee.
Leslie Corwin, a partnership law expert at Greenberg Traurig, says there are many other firms that allow the managing partner to fire partners, though he declines to name examples. So long as the partnership agreement says the managing partner or chairman have that authority and the firm follows its due process rules, case law supports the structure, he says.
“I believe in benevolent despots running law firms,” Corwin says. “I do, I do. But the key to the whole thing is the partnership agreement and what’s agreed to. That’s the key.”
That could also be an issue in Pitcock’s suit. Kasowitz Benson has said that after receiving a complaint it conducted a thorough, weeklong investigation ending Dec. 7. Pitcock disputes this, saying he is unaware of any inquiry until two days before he sent an e-mail to a female associate on Dec. 5.
Notably, both Kasowitz Benson and Barlitt Beck are relatively young firms, having been established only 15 years ago. “The old-line firms, where the founders have all died or mostly died, have fairly robust partnership committees, which enforce institutional standards, and where any one partner simply isn’t that powerful,” says Pitcock’s lawyer, John Balestriere of New York’s Balestriere Lanza.
Still, other young firms follow a traditional path. At Quinn Emanuel Urquhart Oliver & Hedges, which was founded in 1986, firing a partner requires a vote of the entire partnership, says name partner John Quinn. Likewise, at Susman Godfrey, founded in 1980, the partnership agreement requires a 75 percent vote of partners to expel a member. “The managing partners have the right to veto an expulsion, but not to cause on,” says co-founder Steven Susman.