Kaye Scholer was founded in New York in the (Russian) revolutionary year of 1917 by Benjamin Kaye and Jacob Scholer. (Kaye was also a Broadway playwright.) The firm established its labor department in 1947 and its antitrust practice in the 1950s. In the '70s and '80s, the firm expanded by opening offices in Washington, DC, Hong Kong, and Los Angeles. Kaye Scholer now has more than 350 attorneys in six offices including an office in West Palm Beach, focusing on trusts and estates work, and an office in Shanghai, opened in 1998.
Kaye Scholer was the talk of the legal community in the early 1990s, as federal regulators punished the firm for its involvement with client Charles H. Keating's infamous failed S&L: Lincoln Savings and Loan Association. Kaye Scholer had represented the savings and loan in its hearings with bank regulators prior to its failure, which eventually cost taxpayers $2.6 billion. The Office of Thrift Supervision (OTS) subsequently sued Kaye Scholer and three of its partners in March 1992.
In a move that would prove controversial, OTS decided to freeze the accounts of both the firm and the charged attorneys. Thus strong-armed, Kaye Scholer agreed to pay a $41 million fine to settle the charges; the firm's partners paid a full $16 million not picked up by insurance. The three partners agreed to no longer represent financial institutions.
Ultimately, the OTS faced much criticism over its decision to freeze the firm's accounts, both in the press and legal community. Legal experts, such as the New York State court system's lawyer disciplinary panel, questioned the OTS' charges, arguing that the firm had acted responsibly. Despite this eventual (partial) vindication, Kaye Scholer was hurt by the OTS episode, with a few partners leaving the firm because of the turmoil.
The firm's signature practice is antitrust, a department launched in the 1950s by Professor Milton Handler. Handler, who represented Pepsi when it sued Coke over the right to use the word "cola," was President Franklin D. Roosevelt's chief adviser on antitrust matters and served as the first general counsel to the National Labor Relations Board. He helped draft some of the nation's best-known laws, including the National Labor Relations Act and the G.I. Bill of Rights. At Kaye Scholer, Handler represented clients like Pepsi, Xerox, Texaco, and the American Tobacco Company. As a professor at Columbia University Law School, he was widely considered the dean of antitrust law. Handler died in November 1998. His daughter, Carole Handler, who joined the firm's Los Angeles office as counsel in 1997, continues to co-chair the firm's entertainment group. She had been the senior VP of litigation at MGM Entertainment.
Kaye Scholer continues to develop its strength in this area, notably by representing R.J. Reynolds in its antitrust lawsuit against Phillip Morris. (Its representation of RJ Reynolds prompted complaints from corporate raider Carl Icahn, who used Kaye Scholer, and who, for years, had been attempting to break up the tobacco and food businesses of RJR Nabisco. The firm denied any conflict of interest.) In 1998, the firm was tapped by longtime client PepsiCo in another antitrust action against nemesis Coke. Pepsi alleges that Coke pushed it out of restaurants and movie theaters by prohibiting distributors from selling both brands.
Kaye Scholer also offers an impressive litigation practice. Recent matters include the representation of Marvel in its litigation with major film studios relating to the ownership of film rights to the "Spiderman" character. The firm also has also handled Garry Shandling's highly publicized $100 million conflict of interest suit against his former manager Brad Grey. Outside of the media and entertainment world, Kaye Scholer has represented investment bank Kidder Peabody in litigation matters for the past five years, most recently a suit over Kidder's investment advice to Community Hospital of Springfield & Clark County in Ohio.
Other strong groups include bankruptcy (thanks to its acquisition of Levin & Weintraub) and a well-respected white collar crime division that defends corporate directors. Overall, about 20 percent of the firm's business comes from non-U.S. clients. The firm counts Pfizer, PepsiCo, Novartis, Estee Lauder, Onex and Chase Manhattan among its major clients.
Each of the Kaye Scholer's offices handles its own recruiting efforts. For callbacks, candidates begin the day with an "informal, non-evaluative session" with two associates. They then have four interviews (two with partners and two with associates) and are generally taken out to lunch, again with two associates. Note that insiders at the firm's New York office say the firm hires more first-year law students than many of its competitors; one associate reports that the firm hired "six or seven" first-years in the summer of 1999.
Hired into departments
Kaye Scholer hires first-year associates into specific departments. Insiders say that while the firm makes an effort to give them a sense of which department the firm would like to place them, it does not make this certain until after the offer is accepted. "They give you a general sense, 'We think you would be an asset to such and such,'" reports one insider. Summer associates who accept offers are asked to rank three practice groups, but not all get their top choice. Says one first-year: "I know some people wanted to do labor but ended up doing litigation." Says another associate: "Usually it shakes out OK. The only people who get frozen out are people who want to work in smaller departments. "In a class of 30 there may be one or two who aren't too happy."
Decent hours, no face time
Insiders at Kaye Scholer agree that the firm is not a sweatshop. Says one corporate associate: "Kaye Scholer has historically expected fewer hours than other big NY firms. Nobody works 2,700 or more." Says another corporate associate: "For the most part, the hours have not been overwhelming." Reports yet another: "Hard work is definitely required, but family life is not totally disregarded."
"I tend to get in at 9:30 or 10 o'clock," reports one litigator, who describes himself as "pretty average." "If I'm out by 7, I'm happy. I'm here till 9 to 10 at least once a week, and I'm here one day on a weekend, at least half of the weekends, but that's because I've got stuff to do, not because I feel like I have to come in." Continues that contact: "A lot of times this place is like a ghost town on a Saturday and Sunday."
Some contacts fear that the firm is placing greater emphasis on hours. "While Kaye Scholer is still the kinder, gentler law firm, it's started to change a bit over the years," says one mid-level associate. "For example, billable hour totals are becoming more important." Still, says one insider: "Overall, it's not a sweatshop. If you're busy you'll work long and hard hours, but otherwise you go home. There is no face time."
Centralized assignment system
Kaye Scholer utilizes a centralized assignment system in each of its departments. In the firm's reputable New York litigation group, assignments are doled out by one partner: Andrew Macdonald. "I think it works really well," says one litigator. "It keeps it from being really unfair to any one person. You don't watch one person stay all the weekends while everyone else takes off. [Macdonald] does a good job of spreading it around." Of course, because assignments all go through one partner, associates know who to avoid if they don't want the work. "There are some people who try to duck him on Friday. They don't take his calls," reports one insider. "The guy's not stupid, he's been doing this a long time. He knows what's going on. Those people don't tend to stay around for very long."
The corporate department has two assignment partners in New York. "They're usually junior partners, one specialized in general corporate practice and one in finance," reports one insider. "They sort of collect all the work that's available and call each of the first-year and junior associates and ask them if they can take on work. We have a Monday morning meeting where we discuss what we're working on. Depending on whether we have time, they'll give us work."
Powerful women partners
"The firm makes a great effort to hire minorities," reports one associate. "The firm recently brought in a diversity consulting firm to investigate diversity issues and to conduct diversity training," reports one litigation associate. Says another insider: "I have never been received negatively from any member of this firm regarding my status as a minority or as a woman."
The firm boasts a couple of powerful women partners. Susan Rahm heads the firm's international practice and is a member of the executive committee; Alice Young heads the firm's Asia practice. However, says one associate: "The firm is concerned about the fact that a female partner in the New York office hasn't been made in years, partially because some women have left the firm before their partnership year." (Actually, the firm made a woman partner in January 1998.) And when asked about the firm's flex-time policy, one associate notes that while "there is a gender neutral flex-time policy, a miniscule number of people use it."
Wendy E. Evans
Director of Legal Personnel
Paul, Weiss, Rifkind, Wharton & Garrison;Proskauer Rose;Rogers & Wells
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