Russell McVeagh faces the music

An independent review reveals numerous failings and flaws of the top-tier NZ firm

Russell McVeagh faces the music

“Since commissioning the review, the firm has done a lot of soul searching,” Pip Greenwood said when she finally spoke.

The Russell McVeagh senior partner, a commanding figure in New Zealand’s legal community, and the firm’s chair, Malcolm Crotty, both looked sombre and contemplative during Dame Margaret Bazley’s briefing Thursday in Wellington on her independent review of the firm.

The biting report of the firm’s handling of events said to have happened two and a half years ago -- when senior staff allegedly sexually assaulted and harassed young female law clerks -- revealed numerous failings and flaws of the top-tier New Zealand law firm.

“I think one of the things that we appreciate as an organisation is that the type of cultural change that she’s talking about is not a five-minute fix. Some of the things, we will be able to do quickly, and we’ve started on that,” Greenwood said. “Some of them will take longer.”

One of the leaders of the firm, she would mention asking introspective questions several times during the briefing. She would also later reflect on how in her own practice, she may have been too focused on managing her own team and clients, as well as being a role model to women in law, that some issues may have not been as closely scrutinised as needed.

One of the findings of the report, which also looked at the broader culture of the firm, was that it responded poorly when the events were brought to attention. The firm’s systems and mechanisms failed or were non-existent. The structure of the firm as a collection of practices that lacked in the area of working collaboratively in addressing the cultural and management issues also didn’t help.

“There are some really uncomfortable findings in the report,” Crotty said. “All of the partners had to face them.”

“Pip is right. We recognise that this kind of change starts with the partners,” he added. “It starts with changing the way that we lead and changing the way that we work -- and we’re committed to that change.”

Crotty said that the firm is “profoundly sorry” for the impact of the incidents that happened in the summer of 2015 and 2016 to the young women and the firm’s people. The partnership accepts collective responsibility for what has happened to the firm and the partnership, he said.

Russell McVeagh has accepted all of the findings and recommendations of the report and the firm’s handling of the events was poor, he said. The chairman, who will be speaking in this year’s Women in Law Summit, apologised for both the firm’s actions and inactions.

“We could have done much better, and we should have done much better,” he said.

Why the review was commissioned

Five women, who were summer clerks in Russell McVeagh’s Wellington office, alleged several incidents of sexual harassment and inappropriate behaviour, which they said happened during the summer of 2015-16.

These events are said to have happened during a firm-wide Christmas party in December 2015, a smaller team Christmas party later that month, and a team event in January 2016.

The two men said to have been involved left the firm shortly afterward, and the summer clerks returned to university in February 2016.

The story blew up in February when details of the alleged behaviour emerged in the media. By March, the firm picked Bazley to lead an independent review, which immediately commenced.

Unfettered access

The review took place from March to June and gathered information from interviews with a group of more than 250 people, which included present and former lawyers and staff of the firm. She also spoke to four of the five former summer clerks involved.

Interviews were conducted offsite in both Wellington and Auckland, unless the interviewee requested it to be conducted at a Russell McVeagh office. The review involved an independent contact email and phone number, which were only accessible by the review team.

Interviews were not recorded and the review team only made handwritten notes, which are private and confidential. The firm had also agreed it would not know who was interviewed by the team.

Bazley and her team also had unfettered access to all pertinent documents, she said. These documents included files related to the incident, documentation of how the firm handled the incidents, and exit interviews. The firm also provided documents for policies, systems, and standards in place at the time of the incidents.

Jill Atkinson, an experience senior executive, and Julia Spellman, a Wellington barrister, assisted in the review. Simon Mount QC was legal adviser for the review, and the administrator of the review team was Di White.

Bazley said, however, that ultimately, the review was not a formal legal process, which means she did not cross-examine the participants, who were not under oath. Although the interviews were numerous, she did acknowledge that she did not speak to all the relevant people.

She did not interview the two men concerned. However, she did have a telephone conversation with the solicitor and both of them, who have strongly denied the allegations, provided written feedback.

The incidents

Among the three different dates when the incidents are said to have happened, the firm-wide Christmas party had the most number of alleged inappropriate behaviour.

Bazley wrote of the four former clerks’ recollection of the events at the party:

  • “One was at the bar when the partner approached her, put his hand around her waist and led her away from the bar. He encouraged her to ‘skull’ her drink, and tried to kiss her on the cheek.
  • “One was on the dance floor when the partner touched her bottom and waist multiple times, and then grabbed under her breast from behind. The partner later approached her at the bar and told her to finish her drink.
  • “One was dancing when the partner danced closely, touched her bottom, and kissed her.
  • “One was dancing when the partner pulled her aside, grabbed her breast, and tried to kiss her. At the end of the night, the clerk was waiting for a taxi outside when the partner said something about spilled wine on her top before touching her breasts, waist, and hips. The partner then tried to get into her taxi before another of the clerks shut the car door on him.”

The four women were not aware of what happened to each other at the time, Bazley said.

In incident two, the partner hosted a group of the firm’s solicitors and summer clerks at his home, providing drinks and a barbecue. The partner supplied alcohol late into the evening, the review was told. The incident of inappropriate sexual conduct by the male partner is said to have happened in the latter part of the evening, although exact details of the conduct were not described.

Incident three involved the same male partner and some of the team’s solicitors and summer clerks, who went for drinks at a local café and bar. A group subsequently proceeded to a nearby restaurant for dinner, after which they went to another bar to continue to drink.

“The male partner purchased drinks for the group throughout the evening. It was later in the evening that there was a reported incident of inappropriate sexual conduct by one of the male solicitors,” the review said.

The bad

Bazley found that the firm handled the incidents poorly, and that the firm’s failures had serious consequences on the people involved. During the briefing, Crotty acknowledged the finding that the firm failed to investigate enough, or at all. This was a mistake, he said, and the firm accepts that and apologises for the failing.

Bazley also said that Russell McVeagh had a work-hard, play-hard culture. This involved “excessive drinking and in some instances crude, drunken, and sexually inappropriate behaviour.” Junior lawyers, as well as younger staff, were encouraged to drink in excess.

She also found that there was a lack of leadership in the Wellington office. There was no clear leader overseeing the functioning of the team and the culture of the office at the time of the incidents, she said. The board and the chief executive were aware of some drinking issues, she said, but these issues were not adequately addressed or monitored.

Some staff members were also bewildered by the lack of communication of the firm, even in general terms, that the men involved were leaving because of behaviour not aligned with the firm’s culture. It appears the firm sought to limit how many people know what happened, initially at the request for privacy of some of the affected people, she said.

Some of the interviewees questioned why the firm did not act more summarily to discipline and publicly condemn the men involved. Bazley said, however, that the firm could not have acted without following a fair process and observing the rules of natural justice.

Bazley found failings in the firm’s governance, structure, management, policies, standards and systems in its response to the incidents. The firm also lacked a code of conduct. Handling the incidents was largely left to the HR director, who she said was not equipped with the appropriate expertise to deal with the matters. These failing contributed to the poor management of the incidents, she said.

In reviewing the broader culture of the firm, she found pockets of bullying, poor work management that resulted in excessive work for junior staff, and fear of repercussions for speaking up. The firm does not stand alone in needing to confront bullying, she later said.

Bazley also lamented the fact that many women lawyers still leave the firm rather than progress to senior roles, despite the firm having a partnership consisting of 30% women. This is a big loss for the firm, she said.

Progress have been made in the LGBTII and diversity areas, but more work needs to be done to address sexism and unconscious bias, she said.

“I consider any form of discrimination against women to be a serious issue because it inhibits the change that is needed to achieve the complete elimination of sexual harassment and sexual assault,” Bazley wrote.

In terms of the effect of the scandal on Russell McVeagh, it appears to not have had an effect on recruiting, as Greenwood acknowledged that there has been no change in the number of applications received by the firm. Crotty said, however, that the firm has been having and is expected to continue to have “difficult conversations” with clients who have questions about the incident.

The good

Bazley said that the firm has been under a microscope.

“I think one thing that is clear is that Russell McVeagh has every wrinkle exposed in the public gaze, which is most unusual,” she told the press during her briefing.

Bazley said that Russell McVeagh moved decisively to address the issues and change its culture once the issues were known.

“The firm had moved after the incidents two and a half years ago to put in different regimes. They’ve exited anyone doing inappropriate things. Generally, in those two areas, they have a clean bill of health at this time, which probably not many firms in the country could boast of,” Bazley said.

She also said that during the interviews, she was not told of any recent incidents of sexual harassment, sexual assault, or alcohol-fuelled misbehaviour.

Russell McVeagh was also quick to work on addressing bullying, she said, adding that in her experience, once a light is shone on bullying, it stops. This is which is why she believes the firm has dealt with the issue.

“I spoke to the partners last weekend. Bullying was being done by a small number of senior people,” she said. “Most of the partners who treat their staff admirably had no knowledge that that had been going on. We certainly do not want all partners as being branded as associated with bullying.”

Bazley also noted that there were counselling services available to staff members during the time of the incident, after it, and also during the review.

She also said that while policies either did not exist or were not good enough, the review has prompted the firm to develop extensive firm-wide policies to address matters brought up in the review.

Bazley also said that during the course of the review, most interviewees said Russell McVeagh is a great place to work, that they had a fantastic experience in the firm, that they enjoyed working with the top-quality lawyers, and that they had excellent training while working on complex and leading-edge issues. She was heartened to meet many talented and motivated lawyers during the review, and she also spoke to many hardworking and dedicated staff, she said.

In terms of the effect the review is having on the wider legal community, it has caused an awareness of the current problems in the sector, Bazley said.

“I’ve heard that other firms are going flat out in getting their policies up to scratch,” she said.

What Russell McVeagh is doing

“We are very clear about what it’s going to take to be a partner of this organisation and we’ll be holding people to account for that. If there are people in this organisation that do not meet those standards, there will be consequences,” Greenwood said.

In its statement about the review, Russell McVeagh said that the firms failings have undermined their commitment to a zero tolerance of sexual harassment and bullying. The firm has also been misguided in the belief that it had a “speak-out culture,” which it intends to make a reality. The firm said that it hopes to be defined by the response to the findings and expects that the changes underway will redefine the culture of the firm.

The firm has committed to ending bullying and harassment by putting in place mechanisms for feedback and reporting that ensure staff are confident providing observations and complaints and that these will be treated confidentially and taken seriously.

Clients will be looking to the future, Crotty said, to see whether the firm does what it says it is doing for its transformation. He said that the firm is very grateful for clients being supportive throughout the ordeal, but did not detail the financial impact the scandal has had on the firm.

“We don’t want to just get back from this, we want to move on from it and be a better firm,” he said.

Thanking Bazley and her team for the hard work they put into the review, Crotty said that the firm expected the process to be exacting and challenging.

“It has been, and it will be,” he said. “She has left no stone unturned and has shone a spotlight on every corner of our firm. While this has forced us to see some things that are difficult to see, it will enable us to build a better firm.”

“We know that we have work to do to fundamentally change the culture of our firm,” Crotty said. “We need to move from a hierarchical and siloed firm to an open and collaborative culture. We will not shy away from the issues raised by Dame Margaret’s report and we will move immediately to address them.”


Related stories:
Full statement on Dame Margaret Bazley’s review
Firm picks eminent public servant to oversee independent review


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