5 Jul 2018

Russell McVeagh review: Women felt 'intimidated, confused and uncomfortable'

12:40 pm on 5 July 2018

Law firm Russell McVeagh had a culture of excessive drinking when sexual misconduct allegations arose in 2015 and 2016, an independent review has found.

Dame Margaret Bazley, who led the review, is releasing her findings this morning.

Watch a live feed of the media conference with Dame Margaret Bazley and Russell McVeagh chairman Malcolm Crotty here:

The firm has apologised to the women involved and assured their actions will result in meaningful change.

The first allegations arose from a Christmas party in Wellington in December 2015.

Four female university students who were working at Russell McVeagh as summer clerks told the review of being groped and kissed by a male partner in the firm.

Dame Margaret said the women told her they felt intimidated, confused and uncomfortable about what occurred.

"They told me they were distressed this had happened at a work function where they thought they should have been safe.

"They also told me they knew what had happened was wrong but were initially unsure about whether to report it as no one around them had reacted at the time."

Read the full report here:

The second incident occurred at a smaller team Christmas party at the same partner's home.

Alcohol was supplied until late in the evening and an incident of inappropriate sexual conduct occurred at that time.

In the third incident, the same male partner and some staff went for drinks and dinner.

There was more excessive drinking and later there was a reported incident of inappropriate sexual conduct by one of the male solicitors.

Dame Margaret has found that the firm missed warning signs leading up to the incidents and there was a lack of leadership in the Wellington office.

She said the firm had no policies for alcohol or host responsibility and she was told the threshold for unacceptable behaviour at social events was high.

She has recommended the firm engage an independent expert to advise on developing policies around those issues.

Russell McVeagh chairman Malcolm Crotty.

Russell McVeagh chairman Malcolm Crotty. Photo: RNZ / Richard Tindiller

Dame Margaret has also found the incidents were managed poorly, with serious consequences for the people involved.

"I have formed a view the summer clerks should have been offered specialised counselling and independent legal representation once the firm had sufficient information about the incidents.

"The HR Director repeatedly told the women 'we will do whatever you want; tell us what you need', but the women could not realistically have been expected to know what they needed and were relying on a professional process to safeguard them."

The recommendations include that the firm acknowledges its handling of the incidents was poor and issues a full apology for its actions and inaction to those involved, including staff.

Dame Margaret has also recommended the firm enlist external expertise to develop a stand-alone sexual harassment and sexual assault policy.

She has also found the firm gave a verbal reference for the solicitor involved in the third incident.

It also continued to work with the former partner accused of involvement in the other incidents after he left the firm, because the company was still handling some of his former clients.

Her recommendations include that Russell McVeagh engage an independent expert to advise on policies regarding employment references and reallocation of files after a partner leaves the firm.

"That the firm, and the profession more generally, does whatever is necessary to ensure there is a strong regulatory regime in place to deal with those who act in sexually inappropriate ways."

Dame Margaret also found there were small pockets of bullying in the firm and its culture had allowed that to continue, in some cases for years.

She said those who did so put the safety of staff and the firm's reputation at risk.

"Staff who are experiencing bullying are afraid to speak out for fear it will jeopardise their future career."

It is recommended that the board chairman makes it clear to all partners and staff that the firm has zero tolerance of bullying and there is no place in the firm for perpetrators of it.

An anti-bullying policy is also recommended and a confidential mechanism for reporting it.

It is recommended that if the person doing the bullying doesn't change their behaviour, disciplinary action should be taken.

Dame Margaret has also recommended the firm continue its efforts to achieve gender equality and demonstrate progress by reporting back to the Law Society.

She also found that many staff at the firm were working excessive hours. She recommended a fair system of days in lieu or payment for overtime that could be developed and applied consistently and not left to discretion of the partners.

In a statement from the firm, the board and partners apologised "to the young women for the hurt and damage we caused".

"We recognise that they have shown great courage and applaud them for this. Their actions will result in meaningful change.

"We have made serious mistakes in the way we handled the incidents in 2015/2016. We sincerely regret that these mistakes occurred and they point to a failure in some important aspects of our governance, leadership and management practices, and in our culture.

"These failings have undermined our commitment to a zero tolerance of sexual harassment and bullying. This does not reflect who we thought we were or who we want to be. We will not shy away from the issues raised in Dame Margaret's Review."

Justice Minister Andrew Little said the culture and conduct described in the report is totally unacceptable and although it isn't a government report he will be looking closely at all the recommendations.

He said as justice minister, his specific interest is in the Law Society and whether it has the right powers and capability to respond to claims of wrongful conduct towards employees of law firms.

Mr Little said he's met with whistle-blowers including Olivia Wensley and Zoe Lawton about changes that need to occur to ensure a safer environment for women working in the legal profession.

How did we get here...

On 14 February, Newsroom published a story detailing three sexual assault complaints involving interns and two older male lawyers at leading law firm Russell McVeagh.

It was reported the incidents took place two years ago. That summer there were ten clerks on the summer intern programme. Five of the clerks were female and they declined full-time job offers from the firm after the programme.

In the following days, Victoria University confirmed several of its students on internships at Russell McVeagh reported being sexually assaulted by lawyers.

The police were involved but no charges resulted.

At the time, Russell McVeagh senior partner Pip Greenwood said the firm's board was aware of the allegations and conducted an internal investigation.

The men involved no longer work at the company, she said.

Fresh allegations

Just over a week after the initial story broke, new allegations were made of inappropriate sexual conduct between university students and senior lawyers at Russell McVeagh.

In a social media post, AUT law lecturer Khylee Quince said the Auckland University students described an evening where there was heavy drinking between students and lawyers, leading to sex on a boardroom table.

Ms Quince said she spoke to Russell McVeagh after students complained, but they said it was none of her business.

What happened next?

At the Ministry of Business, Innovation and Employment's annual review in late February, National MP Melissa Lee raised questions over the government's continued use of Russell McVeagh.

In the 2016/17 financial year, the government spent more than $3.1 million on Russell McVeagh which provides legal services to 22 government agencies.

Just over two weeks after the initial revelations came to light, all six of the country's university law schools cut had ties with the firm.

All of the universities have said they would reconsider their links with the firm once it had finished its own review into how it deals with sexual harassment.

The review

Dame Margaret Bazley

Dame Margaret Bazley carried out the review Photo: Supplied

On 23 February, Russell McVeagh announced it will hold an external review into its handling of sexual harassment claims by students on internships.

It was later announced that Dame Margaret Bazley would lead the external review into allegations of sexual misconduct at the law firm.

Dame Margaret previously headed the Commission of Inquiry into Police Conduct in 2007, was a member of the Royal Commission on Auckland Governance and reviewed the legal aid system in 2009.

She was also member of the Waitangi Tribunal for 10 years.

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