In the week after Mishcon de Reya hit the headlines for the size of its fees, Robert Lindsay looks at the deeper problems that beset the firm.
Mishcon de Reya was advertising for assistants last week with a bold half-page advert announcing it as: 'Not just any law firm.'
The firm which famously advised Princess Diana is certainly unlike any other but whether it is unique in ways that are positive is another question.
Our story about a litigation assistant who lasted at the firm for only one week before scurrying back to his old home (The Lawyer, 6 January 1998) sparked a typical response a phone call from a former Mishcons lawyer saying that the assistant's experience was not untypical.
Whilst The Lawyer regularly gets unsolicited calls of this sort from former lawyers at all kinds of firms, and we know there are two sides to every story, the number and the venom of such calls from former mishcons lawyers is unprecedented.
Why is this? The response of Anthony Julius, who told a national paper last week that nobody had left the firm directly because of him, is that it has created jealousy because of the media attention it got during 1995 and 1996 when it advised Princess Diana and other high profile media people.
This is certainly part of the answer. With around 30 partners, Mishcons is a medium-sized firm which, through Lord Mishcon, had society contacts such as Lord Palumbo which helped its client base. It was Lord Palumbo who introduced Princess Diana to the practice. Lawyers in rival practices may resent the attention the firm and Anthony Julius, in particular, receives. But there is more to it than that.
Its management style is said to be 'confrontational'. In 1992, it replaced its lockstep profit share with a guaranteed minimum draw of £100,000, with top-up supposedly based 100 per cent on merit to be decided by a remuneration committee. This led to disputes over who should get what.
In addition, Mishcons is ruthless with those who consistently do not perform. They find themselves edged out of the firm.
The departures over the past couple of years tell a sorry tale. Five partners left at the end of 1995 in an acrimonious dispute which is still rumbling on. The partners were unhappy that the firm had, in October of that year, taken four new people into the partnership from Rabin Leacock and from Brechers with what they regarded as no consultation.
In the past 12 months, Mishcons has lost six partners: banking partner Stephen Davis; commercial partners David Harvey and Paul Millett; litigation partner Paula Feldman; and property partners Tim Southern and Nef Jandu. Not all have left for performance reasons. Some are likely to have gone because they felt they were not getting the remuneration to which their billings entitled them.
There have also been numerous defections at the assistant level and among support staff.
Several staff have taken action against the practice. Paula Feldman, who has just joined Richards Butler, was in the midst of an internal grievance procedure, understood to be over the way she was being confronted about her performance, when she left of her own accord and commenced unfair dismissal proceedings which appear to have been either settled or dropped.
Gillian Barker, Mishcons marketing head, became a part-time consultant for the firm after disputes with the partnership. Personnel manager Norma Williamson won an out-of-court award from the firm following her dismissal in September 1996. Her immediate superior Carol Hoodless resigned the following spring. Max Rassoff, the firm's accountant, left at much the same time.
Even Kate Day, Gillian Barker's successor as business development manager, resigned last week, although she has departed on friendly terms.
Former Mishcons lawyers say that Julius, who is de facto managing partner although he does not assume the title, has his favourites. When in October 1996 the firm replaced the management committee with a three-strong executive committee, Sandra Davis, said to be Julius' favourite, was a nominee for election. She was ousted by property partner Ronnie Hooberman, who put himself forward at the last minute. The other two on the committee are Julius and corporate head Kevin Gold.
Another accusation is that the firm is 'gullible' and that lawyers from outside are taken into partnership too easily. One named a partner who was taken on after he promised to bring in big clients and who 'produced next to no clients and was gone within a year'.
One complaint, particularly in the property department, is that the ratio of partners to assistants is too high, leading to too much work for the assistants. There are now eight property partners (plus two property litigators) and eight assistants.In the past two years, assistants Fiona McPherson has resigned after only three months, Jonathan Wiese resigned after nine months and Philippa Cobb departed some time after the arrival of the Rabin Leacock partners.
There is no doubt that the profit share structure makes for a ruthless 'sink or swim' existence at the firm. Rumours are that Julius is thought to be considering taking a consultancy role at Mishcons to devote more time to his lecturing and research at University College, London. A change of personalities at the top may alter the atmosphere, but a lot of the office culture must be blamed on the profit share system.
This is a culture in which some can thrive and others find abhorrent. Anyone tempted to respond to Mishcons recruitment advert last week should think hard about which type of person they are.