The interns & the law firm

The Russell McVeagh report: what’s missing

Dame Margaret Bazley’s independent review into the sexual assaults and harassment at Russell McVeagh - and a wider culture of bullying and exploitation - hasn’t pulled many punches. But the report does have some glaring omissions. Sasha Borissenko - one of Newsroom’s key journalists who broke the story - highlights the report's shortfalls, and suggests what should have been done differently.

COMMENT: Dame Margaret Bazley’s report into Russell McVeagh’s response to allegations of sexual assault made for sobering reading.

1. Key questions glossed over

The report didn’t address how the partner and solicitor should have been dealt with other than suggesting “the firm could not have acted without following a fair process and observing the rules of natural justice”.

What we do know from the report, is that the partner had "negotiations," until he came to an agreement with the Board to leave the firm. The solicitor was "neither suspended nor stood down" during an internal investigation, and left on his own volition. Both lawyers came to the Russell McVeagh premises at some point after the complaints, causing distress to the interns. 

Staff were informed of the departures by way of email - the solicitor announced his "own departure in very positive terms", and the firm sent out a "positive (described by some as a 'glowing') farewell for the partner". 

The solicitor went on to work at Duncan Cotterill, with both firms disputing whether the severity of the incidents were portrayed in a verbal reference.

While Bazley said she hadn’t seen anything to indicate the firm actively arranged the new job, “I have not been able to speak directly to all the relevant parties, and at the time of writing this report the provision of the reference is the subject of a Law Society complaint. It would not be appropriate for me to attempt factual findings while the matter is before the Law Society”. 

The Law Society was first informed by one of the interns in October 2016, almost 10 months after the incidents. The Lawyers Conduct and Client Care rules clearly state that allegations of misconduct must be reported immediately to the Law Society. 

Bazley said the Law Society told her there had never been a misconduct report based on sexual harassment or sexual assault in the context of an employment relationship. “That suggests the profession as a whole did not see sexual harassment in the context of an employment relationship as a professional standards issue that would potentially trigger the mandatory reporting duty."

Rather than concluding that the firm ought to have reported the incident, Bazley said it was a question for the Law Society - in particular its working group headed by Dame Silvia Cartwright. ‘’As there are already processes under way at this point, I will not comment further on this issue…”

2. Accountability over handling of complaints 

Bazley found the "failings in the management of the incidents of 2015–16 were not those of the HR Director alone but of the Chief Executive, the Board, and ultimately the partnership, all of whom should shoulder some of the responsibility." A problem shared, a problem halved, it seems, with all culpability of knowledge dispersed at various times and degrees among all, and yet none, Bazley effectively concluded. 

The chief executive and human resources

Human resources informed chief executive Gary McDiarmid after the first incident. Two incidents followed. The partner and solicitor were not disciplined. The solicitor was given a verbal reference. The partner continued to work on Russell McVeagh files. No independent legal advice was offered to the women, one woman was given the offer to see a counsellor, a former HR employee who had a "longstanding professional relationship and personal friendship" with the partner concerned. Instead, the women were told to "shush" and warned about the risk of defamation. 

Collective responsibility among the partners? 

According to the report, "the firm is a parity partnership where each partner is effectively a business owner in charge of his or her own practice".

“Partners enjoy a large share of the profits; with that comes responsibility and accountability for what happens at the firm.

“I have considered whether the firm missed any warning signs leading up to them, and concluded there were such signs.”

Despite Bazley's strong statements leaning toward collective partnership accountability, her recommendations ultimately pointed to a gap in management. The report said the partners operated in “silos with low awareness of or interest in what is happening outside of their practice” with the Board - particularly the ethics committee - not knowing the full extent of the claims. 

But, “[i]n early 2017, statements from some of the summer clerks were read out at a Russell McVeagh partnership meeting where I am told the partners were very upset ... yet “the clerks did not receive substantive responses to their statements. In particular, there was no apology from the firm, or offer of support”.

During yesterday's press conference, when asked about who at Russell McVeagh was being held accountable for its failures, board chairman Malcolm Crotty said the firm was having “some difficult and sensitive discussions around that”.

He would not confirm whether there had been any resignations as a result of Bazley’s report, citing employment law and privacy concerns, but said partners took collective responsibility for Russell McVeagh’s shortcomings. 

What was clear in the report, though, “the firm has accepted the recommendations set out in this report, and with the leadership of the current Board, I am confident it is well-placed to tackle the challenges ahead”.

3. Emphasis on alcohol consumption

Issues relating to alcohol and the lack of alcohol policies were riddled throughout the report. Although Bazley explicitly said inappropriate sexual conduct could never be justified by the consumption of alcohol, there is a sense that by way of Bazley's comments, but for the alcohol, the incidents may not have happened. 

“My sense is that the current generation of partners inherited a firm with significant elements of an old fashioned, ‘blokey’ culture where the availability of alcohol was unlimited and provided an opportunity for some to habitually drink in excess.

“This was at times accompanied by appalling behaviour of a crude, drunken, and sexual nature."

This echos the firm's response when the allegations of sexual assault and misconduct were brought to light earlier this year in an RNZ interview, where Pip Greenwood said the firm had put in place a training programme specifically for the clerks called 'Alcohol and Me' (which is a Lion developed programme). Rather than the focus on the offending, and the consequences for the offenders, the onus was placed on the interns. 

“The Wellington HR manager asked for further details. The clerk was unwilling to provide the name of the partner or the name of the clerk concerned.”

“A number of partners and the HR director told me there was a strong request for privacy from one of the clerks, which made communication difficult," for example. 

4. Historic accounts of sexual assault

The report noted: “I was not told of any recent instances of sexual harassment, sexual assault, or alcohol-fuelled behaviour.”

In the course of inquiries into Russell McVeagh's handling of the summer clerk programme allegations, Newsroom has been informed of incidents involving eight male staffers accused of sexual misconduct, harassment or inappropriate behaviour to staff dating back to 2000. Some of those implicated have left the firm.

“No Russell McVeagh staff members I spoke to described recent instances of sexual harassment or sexual assault,” the report read. 

"Some of these allegations were historic and others less so. ... I have not conducted an investigation into any of these allegations, and have not made factual findings" - which raises the fundamental question of whether Bazley had sufficient access to all information.  

5. Access to all information

Bailey said she had "full access to the files relating to the incidents along with ancillary documentation that informed the firm’s handling of the incidents”.

But, “I have not been able to speak to all the relevant people. In particular, I did not interview the two men concerned although I did have a telephone conversation with the solicitor and both provided written feedback".

Again, she wasn't able to speak to the issue of the verbal reference for the solicitor, as “it has not been possible for me to make findings about precisely what was said in the verbal reference”. Duncan Cotterill told Bazley it had no view on the matter, despite Newsroom's earlier reporting

Russell McVeagh has 330 employees across the two offices. In total 237 people were interviewed. Seventy took place in Wellington, and 128 interviews took place in Auckland. The rest were comprised of letters, phone, and skype interviews by other stakeholders.

There was no detail of how many interviews included current employees, and no break-down by age, position, gender, or ethnicity.

Bazley said the majority of interviews were positive about the firm, but how many of those positive references were made by current employees, who may or may not have an interest in the reputation of the firm. Bazley also established in her report that it is well known few women feel incentivised to come forward in instances of sexual violence. Thus a break-down of the numbers would have been useful.

Where to from here

If indeed the firm is to accept the recommendations, it could mean the introduction of overtime pay.

The report's specific recommendation: “That a fair system of days in lieu or payment for overtime be developed, applied consistently, and not left to the discretion of the partners”.

The ‘or’ is important here. “The other issue staff told me about was that in busy teams, even if they were given a catch-up day, the team was so busy they felt there was never time to take it.

“I have formed a view that, as the current discretionary system is not fair and doesn’t work in all cases, a formal system of compensation for overtime is urgently needed …. Such a change will provide a positive incentive to manage staff well and also act as an auditing system. Poor managers will feel the financial impact and quickly come into line. This could be part of an overall review of the remuneration for junior lawyers.”

Meanwhile, the offenders are no longer at the firm, sexual harassment is supposedly a thing of the past, and the partnership - who to reiterate has Bazley's full confidence to fulfil the watered down recommendations - will keep ticking along, business as usual. 

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