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From intense cases and deals to a hushed office culture, Sullivan & Cromwell is all business. A serious mien and "tomb-like" silence pervading the hallways haven't impacted the firm's bottom line - average partner compensation at the firm has exceeded the $1 million mark for more than a decade, S&C's corporate practice is among the very best in the legal field, and the firm maintains a reputation for expertise and professionalism in all of its endeavors. An unsullied history Sullivan & Cromwell gets its name from its founders, Algernon Sullivan and William Cromwell, who founded the firm in New York in 1879. The firm took on some of the blockbuster deals of its day, such as the formation of Edison's General Electric Company in 1882 and the United States Steel Corporation in 1901. Sullivan & Cromwell also took an early lead in the international finance market. The company represented European financiers of America's railroads and the builders of the Panama Canal. By 1928 Sullivan & Cromwell had offices in Buenos Aires, Berlin, and Paris. Even the Great Depression didn't stop S&C - the firm was an early player in the field of federal income tax and developed expertise in antitrust and shareholder litigation law. Partners John Foster Dulles and Arthur Dean ensured that Sullivan & Cromwell continued its prestige and prominence on the international scene. Riding the waves of international capital flows and the development of the European, Asian, and Latin American markets, Sullivan opened offices in London in 1972, Washington, DC in 1977, Melbourne in 1983, Los Angeles in 1984, Tokyo in 1987, Hong Kong in 1992, Frankfurt in 1995, Beijing in 1999, and Palo Alto and Sydney in 2000. The firm now boasts 523 lawyers in 12 cities around the world. Changing of the guard All good things must come to an end, and one of those good things is the reign of current Sullivan chair Ricardo Mestres. Mestres, who led Sullivan for five years, stepped down on July 1, 2000. Firm rules dictate that a chairman must hand over his power when he turns 67, and Mestres's time has come. During Mestres's tenure, the firm has maintained its prominence on Wall Street while gradually expanding its overseas practice. The firm has named H. Rodgin Cohen, an M&A and banking partner, as his successor. The 55-year-old Cohen has been with Sullivan since 1970 and has been a partner at the firm since 1977. In 1981 Cohen negotiated with U.S. banks to release Iranian assets, a key part of the deal that freed the American hostages in Iran. Cohen has worked on several historic transactions, including Mellon Bank's 1994 acquisition of Dreyfus, valued at $1.8 billion, the largest combination of a bank and a mutual fund ever. He also played a role in bank mergers like Northwest Corp.'s 1998 acquisition of Wells Fargo & Co. and Chemical Bank's 1996 deal with Chase Manhattan Corp. Cohen plans on spending 75 percent of his time on client matters and 25 percent on running the firm - a daunting ratio, considering the size and prominence of Sullivan. But Cohen won't be running matters by his lonesome. He has stated that he intends to give Sullivan partners more delegated decision-making power. Cohen also intends to revisit the issue of hiring lateral partners - Sullivan has never hired a partner laterally (or at least not as of January 2000). M&A around the world If you are a company and you want to merge, Sullivan will probably consider the deal. In terms of the number of deals it has worked on, Sullivan ranks as one of the top three mergers and acquisitions law firms in the United States. Sullivan's M&A prowess, however, stretches overseas as well. Sullivan participated in the largest corporate takeover in history, British wireless communications company Vodafone AirTouch's $183 billion purchase of the Germany's Mannesmann AG in spring 2000. The size of the European deal broke the record set in January 2000 by the Time Warner-AOL deal. Internal mergers Never say that Sullivan doesn't plan ahead. At the end of 1999, President Clinton signed the Financial Services Modernization Act into law - an event that is expected to prove a windfall for many law firms. The new law overturned the Depression-era Glass-Stegall Act, permitting the creation of companies that provide services that include both bank loans and investments as well as insurance policies. Under the FSMA, banks may trade securities, and insurance companies may own banks. The FSMA is expected to lead to many more mergers and combinations along the lines of the prescient Travelers-Citibank-Salomon Smith Barney rollup - and bring more work for Sullivan & Cromwell. The firm has readied itself for the new merger-friendly environment by doing a little internal merger of its own, combining its banking, insurance, and asset management attorneys into a 75-lawyer financial institutions group. Massive corporate finance Sullivan consistently handles some of the largest corporate finance deals in the world. Sullivan was one of three U.S. firms to get in on the $18.6 billion sale of shares in Italy's electric company Enel. (The other firms were Shearman & Sterling and Skadden Arps.) Sullivan partner William Plapinger advised Enel in the offering. The IPO was quite complex because of its size, changes in regulations, and the need to coordinate between the U.S. and Italy. The offering was the second-largest in history, after the 1998 offering by Japanese cellular company NTT DoCoMo (with which Sullivan was also involved). This IPO is as good as gold After much anticipation, S&C mainstay client Goldman Sachs became the final investment bank to go public in May 1999, with Sullivan serving as issuer's counsel. In the IPO - the nation's second-largest ever - Goldman sold 69 million shares (slightly over 11 percent of the firm), raising $3.66 billion. The crusaders of litigation With 115 lawyers, litigation is Sullivan's second-largest department. In October 1999, Sullivan litigators represented British Airways in its battle with Virgin Atlantic. Virgin Atlantic claimed that BA engaged in anticompetitive conduct by maintaining a stranglehold on air routes originating at London's Heathrow Airport and manipulating travel agent bookings. The district court held that there wasn't enough evidence to keep the case alive and dismissed the suit. But Sullivan's work is not finished quite yet - Virgin has appealed to the Second Circuit. Transmission problems When the Bank of New York had to go before Congress in September 1999 to talk about its role in Russian money laundering, it turned to Sullivan & Cromwell lawyers to help prepare and to scrutinize the bank's records. The government discovered that around $10 billion had passed through the bank in perhaps the biggest illegal money transmission operation ever uncovered. BONY employees came up on the Justice Department's radar screen because one of the bank's vice presidents, Lucy Edwards, handled accounts that were the focus of the investigation. Edwards and her husband Peter Berlin pleaded guilty to charges of conspiracy to operate an illegal funds transmission, fraud, and tax evasion. The government has not accused the bank of any wrongdoing, and the bank has cooperated in the government investigation. BONY also reportedly fired two employees over the scandal. Going where the clients are To keep up with the firm's growing business around the world, Sullivan has been expanding the number of its outposts. The firm opened an office in Beijing with three lawyers in 1999. S&C plans on representing outside investors in China as well as helping Chinese companies raise cash. In March 2000, Sullivan announced that it would set up shop in Silicon Valley. Sullivan plans on relocating four partners to the new office, and will transfer and hire up to 10 associates in the high-tech hotspot.
High emphasis on grades Although Sullivan is very choosy when it comes to picking new hires, the firm has lawyers from more than 70 law schools in its ranks. "Of course, law school grades form the cornerstone of the recruiting process, particularly with law schools outside of the top ten," insiders say. In fact, S&C puts such an emphasis on grades that the firm routinely bounces law review applicants. According to one source, however, "the firm is also looking for nice people who have interesting backgrounds." S&C lawyers report that although standards remain high, it is much easier to get hired as a lateral than straight out of law school. S&C itself disputes this, claiming that it may actually be more difficult for laterals to get in the door. Sullivan looks for candidates "who can both analyze information and articulate their findings." "At Sullivan, we don't do a lot of memos," adds another insider. "You're just given a problem and asked to figure out what's going on and report back. So if you can do a brilliant analysis but can't communicate it clearly, no dice." The other factor is "how dedicated you will be. We use a test where we ask ourselves, if you got a call from an important client, would this person be a handicap or a benefit if added to your team over the weekend?" Insiders say the reason for this is the simple fact that "Sullivan is a wonderful firm, but not for everyone. If you're really busy, you can't clear out at 7:00 to go meet friends for dinner." Evidence of "dedication and perfectionism, such as athletic performance," thus becomes an advantage.
Partners confidential "The professional confidence that partners express in their associates is special," one S&C lawyer raves. A second-year associate also comments on the amount of trust partners place in associates. "I've been asked by the partners on many occasions what I think about difficult issues. If they find that you have proven your capability, the partners will value your judgment and treat you with respect." Another associate says that he feels free to speak his mind to his bosses. "It's accepted and often encouraged to engage your fellow attorneys, including partners, in debate regarding the best business or legal strategy to pursue both inside the walls of S&C and in front of clients. Good ideas are good ideas regardless of their source." Buttoned-down environment Insiders describe S&C as "intense" and "formal." "This firm is stuffy," opines one lawyer. "It is not hostile or a place of closed doors, but it is questionable whether I would ever enter an open one unless I knew the lawyer." Another lawyer reports, "It's the buttoned-down, Wall Street culture that you'd probably expect from a buttoned-down, Wall Street firm." But things may be changing, if a bit slowly. Straying from the buttoned-down image, the firm recently adopted a business casual policy for the summer and Fridays the rest of the year. "The firm is far from stuffy or even very white shoe," one associate claims. "People are very down to earth and they respect diversity of opinions." Despite the image, insiders report a sense of camaraderie. "There is a clear promotion of the firm and teamwork over individual achievement," says an associate. Another attorney explains, "The culture is extremely supportive. The combination of essentially lockstep compensation for associates and partners limits competition." To paint the town red, look elsewhere While insiders describe S&C as collegial, many emphasize that "this is not a party firm." One source tells Vault.com, "Associates will talk on the phone with each other and send e-mails to keep in touch with friends. But mostly they work too hard to find time to play. When they have time to spare, they'd rather go home to spouses or sleep." Insiders cited their busy schedules as one of the main reasons behind the lack of out-of-office socializing. "Free time is very rare and I don't see a lot of people spending it with other S&C lawyers, unless you count lunch on Saturday at the corner deli." According to another S&C lawyer, "S&C is by and large a very professional, non-social environment. Small groups of lawyers may spend time together, but the environment is geared to working and not socializing." Erratic hours - long or longer Although hours can be erratic, most associates report billing between 60 to 70 per week on average. But the firm reports that associates averaged less than 2,250 total hours in 1999. According to one source, "Hours worked is the greatest quality-of-life problem this firm faces, and it's unclear if the partners recognize the seriousness of the problem. The brightest young associates realize that the cost/benefit equation of being a young associate does not make financial or quality-of-life sense and they leave." Another typical comment: "The work is amazing and the people are brilliant. I just wish there were fewer hours." As at most large firms, another problem is the unpredictability of associates' schedules. "The hours can be pretty tough. In addition, there is an expectation that you are available at any moment. This is driven by the senior associates when you are a junior attorney and then by the clients once you are a senior associate." But one source says associates gain a little more control over the schedule as they progress through the ranks. "By the time you're a third-year associate, you manage your workload and generally can make time for one or two important things - like family and exercise." S&C lawyers in demand S&C has not been spared the high turnover rate endemic to the legal industry over the past few years. "The majority of associates leave within three to five years, but of those there are a large number who never planned to stay any longer in the first place," according to one S&C lawyer. Another associate says, "Turnover is fairly high, but what do you expect? We have headhunters calling us weekly, and quite often the opportunities presented are pretty good." In recent years lateral moves by associates have been evenly distributed between Internet startups, investment banks, and other law firms, associates report.
Maria S. Alkiewicz Director of Legal Personnel & Recruiting (212) 558-3733
Cravath, Swaine & Moore;Davis Polk & Wardwell;Wachtell, Lipton, Rosen & Katz; Williams & Connolly (in litigation) More Company Profiles For more career information, go to Vault.com ©2000, Vault.com Inc
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