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Founded 127 years ago, Shearman & Sterling is one of the oldest and largest law firms in the world. Shearman has built up a top-notch mergers and acquisitions department and formed relationships with numerous financial institutions. The firm plans to continue its impressive international expansion but not at the expense of associate happiness. In 1999 Shearman unveiled a set of groundbreaking retention policies designed to improve its somewhat "sweaty" reputation. Marching through history Shearman & Sterling's story began on November 17, 1873 when Thomas Shearman, 34, and John Sterling, 24, opened a law practice together at No. 20 Nassau Street in New York's Fourth National Bank Building. The offices had a staff of seven - two partners, three law clerks, a bookkeeper, and the ever-helpful office boy. Shearman, a former law reporter for The New York Times, and Sterling, who graduated No. 1 in his class from Columbia Law School, had both previously worked for David Dudley Field, head of the New York bar. Together they brought over a major client from Field's law firm, industrialist Jay Gould, who would become Shearman & Sterling's principal client. Other high-profile 19th century clients included Jonathan Thome, a wealthy Quaker merchant; Charles Osborn of Osborn & Chapin, one of the largest Wall Street brokerage houses; railway magnates George and Donald Smith; and the Rockefellers. Soon Shearman & Sterling began representing banks, including the corporate ancestor of Citibank, thereby firmly establishing itself as a player in the New York legal community. Shearman opened its first branch office in Paris in 1963, followed by offices in London (1972), Abu Dhabi (1976), and Hong Kong (1978). In 1979 the firm began its domestic expansion with a San Francisco office. In 1987 it established a Washington, DC branch, and in fall 1998, it opened a Menlo Park outpost to cater to the needs of Silicon Valley clients. Within the last decade or so, Shearman has pushed its international presence to new heights, setting up offices in Tokyo (1987), Toronto (1989), Frankfurt and Dusseldorf (1991), Beijing (1993), and Singapore (1995). At the end of May 2000, the firm stood poised to acquire most of the German firm Schilling, Zutt & Anschutz (which counts Daimler-Chrysler AG, BASF AG, and SAP AG as clients) in another step towards globalization. In a move to expand its influence in the Bay Area, in July 2000 the firm announced that 11 lawyers from its Toronto and New York offices would relocate to the Menlo Park and San Francisco offices. Perky Shearman In January 1999, Shearman announced a new set of perks for its lawyers. First, the firm set aside a minimum of $2 million annually for an associate benefit fund. Associates will accrue bonus shares after three years at the firm and start getting payoffs in their fourth year. But Shearman's reforms aren't just centered around money - they also affect quality of life issues, often regarded as a notoriously weak aspect of the New York law firm experience. The new initiative allows any associate who has spent at least two years at S&S to shift to a part-time or flextime schedule without hurting his or her partnership chances. Corporate powerhouse Shearman & Sterling has become a leader in all facets of corporate law. The firm's corporate lawyers represent U.S. and international companies in everything from mergers to proxy contests to joint ventures. The firm's global reach and its solid reputation abroad enable it to handle complex cross-border transactions, including those involving multiple jurisdictions and practice areas. In fact, Shearman helped negotiate NAFTA and played a key role in a number of legislative developments in Central and Eastern Europe. In October 1999, Privatisation International and Thomson Financial Securities Data ranked Shearman the number one firm in terms of the value of closed projects, with 21 completed deals valued at a total of $13.9 billion. Marrying off SmithKline An insider describes the M&A department as "a fraternity of tough guys and girls that work hard and feel like tough guys because of it." In one major deal, Shearman lawyers Creighton Condon, Stephen Volk, Michael DeFranco, and Mark Roppel advised pharmaceutical giant SmithKline Beecham on its $76 billion merger with Glaxo. Merger negotiations were thrown off course in 1998 due to a power struggle between top executives, but the deal finally got back on track in January 2000. The new entity, Glaxo-SmithKline, will be the world's largest drug maker, providing stressed-out lawyers with such products as Tums antacids and the ulcer medication Zantac. S&S also represented Viacom in its $40 billion acquisition of CBS in September 1999. The biggest IPO The Shearman corporate finance team represents companies and governments who have been in the markets for years as well as those entities seeking to enter the capital markets for the first time. In 1999 S&S topped European equity rankings, working on 42 transactions totaling $31.8 billion. Partner Bob Treuhold advised Merrill Lynch on its role in the world's largest IPO. Merrill served as a global coordinator (with Mediobanca) in the $18.6 billion sale of shares in Italian state-owned electricity company Enel at the end of 1999. Treuhold also advised French bank Credit Lyonnais on its 1999 privatization and stock exchange listing. According to Treuhold, the bank's privatization presented complications because 90 percent of the bank - a much larger portion than usual - needed to be sold. Global litigation Shearman's litigation and dispute resolution practice handles trial and appellate work in federal, state, tax, and bankruptcy courts throughout the United States, France, and Germany. The group has argued cases before a wide range of arbitration panels and tribunals worldwide, including the International Chamber of Commerce, the London Court of International Arbitration, and the Iran-U.S. Claims Tribunal at the Hague. In the spring of 2000, Shearman lawyers helped clear the legal hurdles to a $40 billion plan to unite the operations of Viacom and CBS Corp. Chris-Craft Industries, Viacom's partner in the United Paramount Network (UPN), brought a challenge to the scheme, arguing that by engaging in the CBS merger Viacom would be violating its contractual duties to UPN. (Viacom had promised to build up UPN as a fifth major network.) In March 2000, Shearman's Stuart Baskin successfully persuaded the court that Viacom had both properly structured the merger and honored its obligations to UPN. The ruling paved the way for Viacom to buy out Chris-Craft's 50 percent stake in UPN, making Viacom the first-ever owner of two broadcast networks. Shearman and the big blue bank Shearman's century-long relationship with Citigroup, one of the world's largest banking institutions, has propelled the firm to first-tier status. For decades Shearman relied on Citigroup for a significant portion of its revenue, and the bank remains one of the firm's top five clients. Shearman is currently defending Citicorp in a more than $80 million lender liability case brought by two architects in Oakland, CA Superior Court. The suit alleges that Citicorp committed fraud in connection with the construction loan agreement for a renovation project. On the first go-round in December 1999, the jury deadlocked. Partner Paul Wickes is leading the Shearman litigation team and is assisted by associates from the firm's New York and San Francisco offices. Tech smarts Shearman handled a large number of technology-related transactions in 1999. On the M&A front, the firm took part in Beyond.com's $140 million purchase of BuyDirect.com in March, Synetic's $1.3 billion purchase of Medical Manager Group in July, and Raychem's $2.97 billion acquisition of Tyco International Ltd. in August. It also worked on public offerings of Looksmart, Active Software, and eBay, among others. But the firm's tech focus is not limited to its clientele. Shearman was one of the first large law firms to give its attorneys laptop computers and stays on the cutting edge by replacing them every year and a half. Under the guidance of Director of Information and Professional Systems Eugene Stein, it has also built an extensive technology infrastructure that can be suited to every Shearman lawyer's unique preferences and work style.
Grades matter Even in this tight job market, insiders report that Shearman is still highly selective. Sources tell Vault.com that grades are more important than the candidate's law school. "I know people who went to better schools but did not get interviews here because they had mediocre grades," says one source. A litigator notes the presence of "lots of smart people in litigation" with both law review and clerkships on their resumes. One DC insider, however, sees more flexibility. "The firm sets high standards in recruiting but sometimes compromises them to get people they like. The firm finds it has to compete hard for the best candidates." Another associate provides this sound advice: "If you know of a department which is especially short of associates at the time you interview, expressing interest in that department may help balance out areas of your resume where you are relatively weak." One source comments that "it helps to be Australian. The firm is now recruiting many male associates from down under." In fact, several associates note that the firm seems to prefer "to take top candidates from second-tier law schools." One M&A contact explains, "They are hungrier, need the job more, and tend to work harder." A corporate finance contact agrees that "the firm seems to prefer to hire someone at the top of a second-tier law school than in the middle or bottom of the so-called five top-tier schools." That insider qualifies that "there is, however, a consensus that the last few summers have brought more intense recruiting of Harvard students from many levels." Mechanics: in and out For prospective new associates and summer associates, the first interview is typically on campus with a partner or an associate. The firm is big enough to have several alumni from each school who are organized into teams to conduct recruiting. Says one contact, "I think they just want to get a sense of who you are and whether you meet certain requirements like being able to speak well and having a good attitude." Offers: please, please, please accept Job offers are given anywhere from a few days to a week after the interview. If you are lucky enough to receive an offer, expect to be "hounded" until you tell the firm whether you accept or not, according to sources. "The contact person will call you every week until you accept or decline," an applicant who turned down an offer from the firm says. "They'll ask you, 'Well, why can't you accept?'" "I told the firm I couldn't decide on the offer yet because I hadn't spoken with an M&A associate, my preferred department," another offeree recalls. "So the firm had a third-year M&A associate call me almost daily, often past 11 p.m., from the office - I don't know how that helps sell the firm. Since I was stalling for more time, I played strategic phone tag, which was difficult since this associate seemed to be at work all the time. I called at 3 a.m. and left a message, 'Oh, I must've just missed you.'" Another applicant who turned down Shearman reports that the firm did not take the rejection well. "They told me that I was giving up an incredible opportunity," the source says. The firm contends, however, that the associates who make follow-up calls usually get the job done and typically with less of a hard sell.
International feel Attorneys describe Shearman as an "old-school," "white shoe" firm. But Shearman attorneys say they can't imagine practicing law anywhere else. "For the most part I have enjoyed my time at S&S. The work is very challenging and most of the people are very supportive," a Shearman attorney reports. A New York lawyer says the firm is "professional yet open and approachable." Associates also say Shearman has "a very international feel, even in the U.S. offices." Naturally an attorney's take on Shearman depends a lot on their department. One corporate lawyer characterized some of Shearman's different groups this way, "M&A people tend to be aggressive and cocky (they demanded a meeting with the Executive Group to find out when salaries would be raised), Project Finance people are very international and stylish, Corporate Finance people are all about business, and Leasing people are extremely smart but low-key." Grading the boss Associates rave about the upward review process that gives them an opportunity to review partners anonymously. Shearman has had associates rate partners since 1997. The reviews may actually have made a difference in the lifestyle at the firm - the attrition rate decreased from 24 percent to 17 percent within a year of the first review. "This seems to have made a real difference," opines one insider. "After all, nobody wants to be the guy that everybody hates." In 1998 Shearman added a little bite to the review process by making the evaluations a factor in partner compensation. Neither nightclub nor monastery Most associates say their social lives do not revolve around the firm. "Everyone has lives outside the firm, and when they have time off they would rather not spend it with their co-workers," remarks one lawyer. A source in the New York office says, "The atmosphere is friendly but a little distant. People tend to want to do their work and go home." Others note that some associates will make efforts to have lunch together and go out after work every once in a while. One insider summed the social scene up this way: "It's not like we're at a nightclub, but it's not like we're in a monastery either. Overall, though, I think it could be more sociable." Turnover turns low The turnover rate at Shearman has dropped significantly in recent years, insiders report. They have numbers to back up this assertion: according to New York Lawyer, 11 percent of associates left the firm in 1999, down from 17 percent the previous year and 24 percent in 1997. Sources say the perks and programs such as the retention bonus and rotation program have successfully stemmed the tide of defection. "Part-time arrangements are skyrocketing," according to one lawyer. "I think the retention package works, not only because of the economic incentive to stay, but also because it shows that the firm is aware and concerned about the (former) problem and ready to act on it. It shows a lot better management than the general whining about uncommitted associates heard at some other places in the city," according to another associate. In addition, insiders report that most defectors do not leave to go to other firms but to work in-house for investment banks or at startups. Hours grow more manageable Although insiders report working long hours, many associates now find Shearman to be livable. "Associates at Shearman work a lot, but it is manageable. It is still possible to have a life outside the office if you are focused and efficient. There is no face time requirement. Just get your work done." The firm does not have a minimum hours requirement, and bonuses are not tied to hours. Another attorney reports, "S&S used to have a reputation as a sweatshop. Nowadays, it's nice to see how few people are around after 7:30 to 8:00 each night." But one lawyer says it's hard to keep the work from piling up. "No is the wrong answer to a new assignment request." Pro bono barrage Shearman has a full-time pro bono attorney who farms out projects to the firm's attorneys. Insiders report that e-mails go around everyday with new pro bono assignments for those who are interested. "All firms say they are committed, but Shearman actively solicits its associates on a regular daily basis to take on pro bono matters," boasts an attorney. In addition, pro bono is treated like billable work. One attorney reports that he spends 20 percent of his time on pro bono work and the firm has been supportive of his efforts.
Halle Schargel Manager, Professional Recruiting (212) 848-7546
Cleary, Gottlieb, Steen & Hamilton;Cravath, Swaine & Moore;Davis Polk & Wardwell;Skadden, Arps, Slate, Meagher & Flom;Simpson Thacher;Sullivan & Cromwell More Company Profiles For more career information, go to Vault.com ©2000, Vault.com Inc
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