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The reverberations are continuing from the surprising Sept. 4 announcement by San Francisco’s Pillsbury Winthrop that a corporate partner who was leaving for Latham & Watkins had been accused of sexual harassment while at Pillsbury. [Editor's note: The partner, Frode Jensen, announced on Sept. 16 that he would not join Latham. See related article at right.] Whether the allegations are true or false, the fact that they were made — and that Latham’s managers, by their own account, hadn’t heard about them before making the hire — has sparked discussion among law firm leaders nationwide. The key questions: Can this happen to us, and what can we do to prevent it? “We have never done formal background checks [of prospective laterals], but after reading these stories, there’s a part of me that says perhaps we should,” says Carter Phillips, D.C. managing partner of Sidley Austin Brown & Wood. Phillips, who just brought in a group of 33 international trade lawyers from Atlanta-based Powell Goldstein Frazer & Murphy, says Sidley has been “pretty lucky” in the past. That means the firm has never found out too late that a new lateral has a serious drinking problem, a history of personal bankruptcy, a pattern of sexual transgressions, or some other type of troubled past. But Phillips says the due diligence procedures that most major firms use may be fundamentally flawed. “It’s tough, because you can’t go to the most obvious source,” says Phillips, noting that a prospective lateral normally wants his or her job search to remain confidential, and that hiring firms are reluctant to tip off the firm that will lose a lawyer. “And the headhunter won’t tell us, and in any case the lawyer won’t tell the headhunter. On the other hand, formal background checks are both expensive and intrusive.” The potential for trouble exists even at the largest firms with the most elaborate vetting procedures. Latham & Watkins, with more than 1,400 lawyers in 21 offices throughout the world, is one of the nation’s top law firms. It is known for checking and double-checking its prospective lateral partners before ever making a job offer. Leaders of both Latham & Watkins and Pillsbury Winthrop declined to comment for this article. But the episode has other firms considering their own due diligence procedures. Law firm managers have concluded that no vetting process is totally foolproof, but that firms can do more to make sure they are not blindsided by embarrassing and potentially costly revelations about new partners who come in from other firms. At D.C.’s Finnegan, Henderson, Farabow, Garrett & Dunner, comprehensive background probes have been required for years for all new employees, including lateral partners. These investigations, says managing partner Christopher Foley, are designed to turn up lawyers who have serious credit problems, pending criminal or civil cases of any sort, personal bankruptcies — even people who have padded their r�sum�s. “It has been time-consuming,” Foley concedes, “and in some cases we’ve lost prospective candidates [because of the delay]. On the other hand, for some younger lateral hires, we have found some bad things — falsified r�sum�s and the like — and the result in those cases was that they were not given an offer.” Foley says Finnegan Henderson’s policy, and the safest course for any law firm, is to hire relatively few laterals and to look primarily for lateral partners who have been in-house counsel at the firms’ client companies and are thus known to the partners. “That provides a degree of safety,” Foley says. At D.C.’s Crowell & Moring, which has done a lot of lateral hiring in the last few years, chairman John Macleod also relies extensively on personal contacts. Many of Crowell’s laterals are people who are already known to the firm, either as friends of a partner or two or as co-counsel on a case with Crowell lawyers. “This gives us some comfort,” says Macleod. “But there is no absolutely foolproof system. It would be hard to catch an instance where someone had a harassment problem, in a case where we didn’t have a partner who knew the person already.” Macleod says Crowell has never felt the need to conduct a formal background investigation or even to use basic online resources such as Lexis-Nexis. “But we may see much more of that as time goes on,” says Macleod, who believes that r�sum� fraud and financial transgressions by lawyers are increasing. Some firms have already found those searches useful. At New York-based Thelen Reid & Priest, which has brought in several lateral groups lately, D.C. managing partner Andrew Ness says he “will occasionally run a candidate through Nexis and Google. It’s amazing what you can find sometimes.” Baltimore, Md.-based Venable, where two-thirds of the D.C. lawyers came to the firm as laterals, does Internet checks frequently — but only toward the end of an elaborate three-step process. The most important question in the due diligence inquiry, says D.C. managing partner William Coston, is the first one: “How did the candidate get to us?” If the candidate is vouched for by a current partner, “that starts the process of credibility right away,” says Coston. “The same is true if the candidate comes through a headhunter, but only if it’s a headhunter who is known to do due diligence.” The second step at Venable is an in-depth personal interview, keyed to the second important question: “Why is this person leaving his or her law firm?” “We as lawyers are trained to be good listeners,” Coston says. “If the story we hear doesn’t make sense, we have to go beyond that to get more facts. If the initial story makes sense, you have already done some of your due diligence.” Coston says that three-quarters of the time, the firm cuts off the hiring process, for one reason or another, after the second step. The third step is to circulate the prospect’s name among all the firm’s partners, who can flag any issues they are aware of. Reference checks and Internet searches are performed at this time. Finally, just before the offer is made, Venable requires the applicant to fill out a questionnaire seeking information on taxes, judgments, and other financial issues, as well as a credit report that only one partner is allowed to see. But no matter how lengthy a procedure a firm wishes to use, there are practical limits to how far it can go in the due diligence process. Beyond the fact that full background searches are expensive and time-consuming, some observers caution that too much vetting can seem heavy-handed and can annoy a prospective lateral partner and scotch the deal. “It’s a delicate dance between a firm and the lateral candidate,” says D.C. legal recruiter Stuart TenHoor. “If there’s too much due diligence, it can turn a person off.” Richard Wiley, senior partner of D.C.’s Wiley Rein & Fielding, says it’s often just too uncomfortable to ask a mutual acquaintance whether an applicant is a sexual harasser or a heavy drinker. “You just ask general questions about character and personality. Maybe you pick up some vibes. But I don’t know how you’d necessarily find out this kind of thing [alleged against the former Pillsbury attorney],” says Wiley. No reasonable due diligence process can prevent all embarrassments, many law firm leaders say. Says Tower Snow Jr., the former chairman of San Francisco’s Brobeck, Phleger & Harrison who took dozens of Brobeck lawyers with him to Clifford Chance earlier this year: “Every law firm in the world has brought in a lateral who was a mistake.”

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