If someone had told us at the start of the year that we might see the corporate collapse of a major Australian firm, we wouldn’t have believed it. Today, however, we hold very grave, very genuine concerns for the viability of Clayton Utz.
We were sent the following link by an anonymous Clayton Utz spy earlier in the week. It is an interlocutory decision of the NSW Supreme Court relating to DEFAMATION PROCEEDINGS AGAINST CLAYTON UTZ BROUGHT BY A FORMER EMPLOYEE.
This brings to three the number of proceedings currently afoot or contemplated that involve Clayton Utz:
- the sexual harassment claims being brought against the firm by former employee Michael “Trench” Mitchell;
- the alleged breach of fiduciary duty action being brought by the firm against mastermind defector Grant Fuzi; and
- the new emergence of defamation claims being brought by former employee Bridgette Styles against the firm.
For our accounting firm readers (and this is obvious, but we’ll point it out just to be certain), this is a remarkable situation because lawyers are customarily involved in representing clients in court proceedings, as opposed to appearing in court proceedings on their own behalf.
Our good friends at RoF reported this story a few weeks ago. We too had been tipped off to the story but, after contacting Ms Styles, agreed with her that we would wait for the interlocutory decision to be handed down before further reportage.
So what does the interlocutory judgment tell us?
To begin with, it tells us that Clayton Utz has done a miserable job at contesting Styles’ application to amend her pleadings, having comprehensively lost the hearing. More importantly, the judgment tells us that Bridgette Styles is alleging that her former firm defamed her. The genesis of that defamation can be directly traced to the alleged publication of the following alleged statement to Joe Catanzariti by a lawyer named Luis Izzo:
“Bridgette Styles, your new graduate solicitor, is making extremely serious and unjustified allegations about Abraham Ashe, Cilla Robinson and James Simpson and I. She is accusing us of conspiring to place pictures of me in Abe’s office. She is saying that she has been sexually harassed by the pictures and she is threatening to use the sexual harassment allegations as bargaining chips against the firm, to force us to let her stay in the Workplace Group after her rotation finishes. She was very aggressive and even grabbed me even though I was backing away. I don’t want to come back from secondment to the Workplace Group if she’s in it.”
Styles alleges that the “sense and substance” of the above statement (that she alleges is defamatory of her) was subsequently republished widely both inside and outside the firm, including “the general population” of legal practitioners in Sydney. Joe Catanzariti – the partner alleged to have originally received Izzo’s allegedly defamatory statement – is the current President of the Law Society of New South Wales.
We reported a few weeks ago the rumour that Clayton Utz was “lowering the bar” by promoting a lawyer with a mere 2 years PQE to senior associateship. At the very same time that the announcement was made in respect of that junior lawyer, one Luis Izzo – a gentleman embroiled in very serious defamation proceedings arising out of his employment – was also made senior associate. An alleged corporate defamer … made SA!
How close is Clayton Utz to doomsday midnight?
We would suggest that every further incident we add to this list of nuclear bombs is another second closer to the end. In 2010:
- 14 very profitable, well respected partners defected from Clayton Utz to build two Australian offices of Magic Circle firm Allen & Overy;
- Clayton Utz sacked over 30% of its Melbourne graduates;
- a former employee was given leave to pursue further claims against the Clutz for alleged sexual harassment and bullying;
- the firm was stripped of its credentials as an employer of choice for women by the Equal Opportunity for Women in the Workplace Agency;
- a librarian has created considerable controversy by hording an inordinate amount of firm fruit;
- a Clutz lawyer appearing on a reality TV show revealed her homewrecking past, cooking up a dish of office romance with a side of “single-mother-left-with-three-young-kids”; and
- it emerged that another former lawyer is alleging the firm defamed her.
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The post of 16 June (“Masterchef”) and 17 June (“Clayton Utz Nuclear Meltdown”) are respectively puerile and irresponsible. They should be removed.
The Masterchef post indulges in spreading scurrilous and clearly damaging rumours whilst pretending to be concerned with the innocent parties most affected by these rumours. It may interest a segment of your readership but repeating these rumours serves the interest of no-one at all.
The Clayton Utz posting, predicting the collapse of a major Australian law firm that employs thousands of people in a climate where many employed lawyers remain concerned for their jobs and others are struggling to find new jobs, is irresponsible. If your defence is that your readers will understand this prediction as hyperbole, may I suggest that you exercise better judgment in the manner in which you use the pulpit from which you preach. Rumours have been shown to start runs on banks, the last thing employed lawyers need is a run on a major law firm. It affects not only the lawyers employed by that firm but, as you can imagine if a large number of highly qualified lawyers came onto the open market, it would maintain downward pressure on salaries at other firms. If no other reason than your comments are unhelpful to the position of what I imagine is your core readership, please exercise some judgement in your postings.
I couldn’t agree more with NA’s post. Professing concern for the mother and her 3 children while ruining her husband’s reputation made me laugh out loud. If you are concerned, don’t report scuttlebutt in the first place. Last time I checked this blog isn’t “New Idea” although given you now have Jamie Fawcett as a source perhaps that is what you are aiming for.
As for reporting Clutz is on the brink of collapse – just shameless reporting. I have always enjoyed reading this blog but it seems to be descending into the gutter rapidly. Clearly you have Clutz in your sights, perhaps one of you was managed out of there and now holds a grudge??
Thanks to the Clayton Utz press office for that comment.. looking a bit desperate guys?
N/A – What would a “run on law firms” involve? People attempting to withdraw monies held in trust accounts. Ha ha. You are clueless.
poor Clutz…it can’t be good for business when they keep getting tied up in litigation with former employees….what’s going on in that workplace?
by the way, the former lawyer who, you say, was granted leave to pursue complaints of sexual harassment and bullying, was actually granted leave to pursue complaints of sexual harassment, disability discrimination and victimization.
Get the facts straight!
Dennis – Thanks for your comment. For a run on a law firm, see Coudert Brothers. You may also wish consider Arthur Andersen’s demise in the accounting field. For “clueless”, see Alicia Silverstone.
You’re quite the imbecile, aren’t you N/A?
What sort of pressure did Clayton Utz’s sacking of nearly half of its Melbourne graduates place on the salaries of other firms? Upward pressure or downward pressure?
And a run on law firms? You absolute turkey! If, hypothetically, clients decide to take their work away from Clutz (which they should do as a matter of urgency), then that work will be gobbled up by a competitor firm. In turn, that competitor firm will feel pressure to employ more staff. At the same time, Clayton Utz lawyers and partners might be under-utilised. The washed-up, hack Clayton Utz partners who justifiably lost their clients probably will get knifed, while the younger, more mobile lawyers beneath them might try to find a new job. Possibly at the gobbling competitor firm.
It is a simple equation N/A. In terms of responsibility, Clayton Utz partners like YOU must learn about it. You are an irresponsible firm. And when Firm Spy calls you to account on it, you cry foul. THAT is irresponsible.
The pulpit from which Firm Spy preaches is not the ivory tower where you sit N/A.
Thanks Applicable. Your assertions concerning my position are wrong. You assume other firms would hire Clayton Utz lawyers despite under under utilisation of employed solicitors in the current market. You take no account of the pressure placed on displaced lawyers trying to find work, not to mention the loss of accrued entitlements of those lawyers. Heartless and misinformed.