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By listing “outside advisers” and a “headhunting firm” as defendants in his $45 million suit against Pillsbury Winthrop, ex-partner Frode Jensen has cast an uncomfortable spotlight on the way law firm managing partners use and allegedly misuse consultants and recruiters to help guide firm strategy. In his complaint filed Tuesday in Connecticut Superior Court, Jensen, who worked in Pillsbury’s Stamford, Conn., office, claims that the San Francisco-based firm issued its controversial Sept. 4 press statement on his planned departure to Latham & Watkins partly on the advice of a headhunter. “[T]he headhunter advised defendants that Jensen’s departure to Latham would be viewed in the legal community as a serious blow to Pillsbury, and that it would make it difficult for Pillsbury to recruit lateral partners from other law firms in the future, and that Pillsbury had to take some action to counter the consequences to Pillsbury of Jensen’s departure,” Jensen alleges in his complaint. In Pillsbury’s statement, which the firm said was in response to a Sept. 3 press release from Latham announcing that Jensen was joining its New York office, Pillsbury Chairwoman Mary Cranston said Jensen had likely been guilty of sexual harassment and had experienced a decline in productivity. Los Angeles-based Latham & Watkins later asked Jensen to withdraw his partnership bid. Along with Cranston, Vice Chairman John Pritchard, Managing Partner Marina H. Park and the firm itself, Jensen’s complaint lists outside advisers and headhunters as defendants “John and Jane Does 1 though 5,” a prediscovery tactic that permits a claimant to show there are additional defendants that the claimant has not been able to definitively locate or identify. Sources close to the matter said the role of one headhunter in particular was being examined, but that headhunter said on Wednesday that Pillsbury was not a client, that the headhunter had never before spoken to either Cranston or Park, and that the last contact with Pritchard took place several years ago. The headhunter declined further comment. Kenneth A. Caruso, a litigation partner at New York-based Chadbourne & Parke, said it was “unremarkable” for third parties like headhunters and consultants to be named in a suit like Jensen’s. Their liability, he said, would turn on whether or not they provided “substantial assistance” to the firm’s management team in implementing its decision to issue the press statement. “If they simply said [Jensen's] departure would hurt them, that’s probably not enough,” said Caruso. “If they helped draft the statement and advised them on wording, that’s a different story.” WAKE-UP CALL Within the small, albeit not exactly close-knit world of Manhattan legal recruiters, the idea that one of their own could be sued for giving advice to lawyers has been greeted with apprehension. “It’s a wake-up call to everyone in the business of search,” said Lynn Mestel, the head of legal recruiting firm Mestel & Co. “It’s about making sure all advice you give has been given serious thought, because their are consequences.” An informal exchange of information between recruiters and firms is a vital part of gathering intelligence on market conditions, several recruiters said, and market intelligence is their stock and trade. “If a recruiter expressed concern about a partner’s departure, that could just be a way of trying to figure out what’s going on with that firm,” said Ann Israel of legal search firm Ann Israel & Associates. Several recruiters said that, regardless of what advice, even bad advice, a recruiter may give a firm, lawyers at the nation’s most prominent firms should know better than to blindly follow a recruiter’s advice, particularly on what most regarded as a public relations issue. “Since when do headhunters tell these law firms what to put in these announcements they send out?” asked Israel. “That’s totally not in the bailiwick of what a legal recruiter does,” said another headhunter, who asked to remain anonymous. LAW FIRM CONSULTANTS Of course, legal recruiters are not the only ones giving advice to law firms these days. In the face of the rapid consolidation of recent years, law firm managing partners have increasingly turned to consultants of various stripe to explore the nexus between marketing, recruiting, expansion and profitability. “It’s all part of law firms being run more like businesses today instead of like traditional partnerships,” said Alisa Levin, a principal at Greene-Levin-Snyder Legal Search Group. Few firms have been more eager to cast aside the image of a traditional partnership than Pillsbury Winthrop. Both San Francisco’s Pillsbury, Madison & Sutro and New York’s Winthrop Stimson Putnam & Roberts were regarded as among the most conservative, “white shoe” firms in their respective markets prior to their 2001 merger. Sources close to Pillsbury’s New York office said the firm relied heavily on outside advisers in its continuing efforts to reinvent two relatively staid regional firms as a one high-powered global player. In his complaint, Jensen blasts those efforts as “relentless” and “unfocused.” He also references a strategic study conducted by McKinsey & Co., the consulting firm. According to Jensen, that study identified lateral partner hiring as a key initiative in improving the firm’s profitability. One source familiar with the study said the McKinsey consultants often showed little understanding of the way law firms operated and drew conclusions that were obvious for all to see. “In my experience, CEOs hire McKinsey to bless a decision they’ve already made,” the source said. Another source close to the New York office said Pillsbury’s desire to position itself as a favorable destination for lateral partners played a major part in the firm’s recent decision, not yet finalized, to move its New York office from the wood-paneled lower Manhattan offices of Winthrop, Stimson, Putnam & Roberts to new, considerably more expensive office space in Times Square Tower, which is still under construction. “They were advised lateral partners would not go downtown,” the source said. One former partner said Pillsbury’s management team was highly focused on strategic issues, but the partners should not be faulted for such efforts or their inclination to turn to outside advisers. “Isn’t everybody doing this?” he asked, referring to the firm’s hiring of various consultants and experts. Indeed, in Caruso’s view, the competitive challenges Jensen cites in his complaint are the key to Pillsbury’s defense against Jensen’s claim of interference with business relations. Parties have a common law privilege to speak and act in defense of their economic interest, said Caruso. Pillsbury’s statement, characterized as a response to Latham’s announcement that it had hired a major partner away from Pillsbury, clearly falls within that privilege, he said. The advantage of this defense is that it does not depend on the absolute truth of the statements at issue, Caruso said. The privilege is defeated only if the claimant can show that the statements were motivated by malice. Whether or not there was malice may have to be determined at trial, Caruso said. “It’s clearly deeper within the situation than an outsider can get,” he said.

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