- Law firms
(Reuters) - On a Wednesday morning just over a year ago, Susman Godfrey founder and co-managing partner Stephen Susman, 79, was out for a bicycle ride in Houston with a few lawyers from his firm.
His front tire hit a seam in the road, and he flew over the handlebars, suffering a traumatic brain injury that left him in a coma for a week. He’d started to progress in rehab when he died of COVID-19 on July 14.
His death left the 140-lawyer firm, which was founded in 1980, without its two iconic name partners. H. Lee Godfrey retired at the end of 2013 at age 75 for medical reasons.
Susman and Godfrey were once “like Mick and Keith,” Susman partner Bill Carmody told me, referring to the leaders of the Rolling Stones – superstar frontmen, prolific rainmakers and lethal courtroom advocates.
For some firms, such a loss would prove insurmountable – akin to leaving Charlie Watts and Ron Wood to play “Satisfaction” by themselves. But Susman Godfrey is more like a big band jazz ensemble, full of virtuoso performers.
Despite Susman’s death and a global pandemic, 2020 financially was a banner year for the firm, Carmody said, with revenue per lawyer well exceeding the Am Law 100 average.
In December, Susman doled out market-busting bonuses ranging from a median of $80,000 for its most junior lawyers to $170,000 for senior associates - far above the scale adopted by Cravath, Swaine & Moore and other firms, my Reuters colleague David Thomas reported.
“That the foundation is so strong, and the business is so strong - that’s the legacy of Steve and Lee and what they built,” said Carmody, who leads the 30-lawyer New York office, which boasts six former U.S. Supreme Court clerks.
Virtually every Big Law leader I’ve ever spoken to has touted his or her firm’s unique culture. But from where I sit, in many instances these so-called cultural differences are … um, subtle (Or as Carmody put it, “It’s all bullshit.”)
Yet in some fundamental ways, Susman Godfrey really is different, which helps explain its successful transition to the next generation of leaders.
“We don’t have a lot of rules. We flourish in chaos,” co-managing partner Neal Manne told me. “We have a bit of the pirate spirit.”
Wait, but you also only hire associates who’ve had federal clerkships and excelled at top law schools, I pointed out.
“Supreme Court clerks willing to wear eye patches,” Manne amended. That is, people who are “a little more entrepreneurial, who are eager to learn by doing, who want to go fast.”
The partnership track - equity only - at Susman is a mere six years. Moreover, partners don’t have shares or points. It’s all about business generation.
“On January 1, every partner is entitled to absolutely nothing,” Manne said. “There’s no guaranteed income. Someone could be the highest-compensated partner one year and the lowest the next.”
One of Steve Susman’s great innovations was recognizing decades before alternative fee arrangements became fashionable that contingency fees weren’t just for personal injury lawyers.
Today, Manne said only about 10% of the firm’s work is billed on an hourly basis. The rest is a mix of every fee structure imaginable.
“It’s almost a competition among the partners who can come up with the wackiest fee arrangement,” he said. (When Manne represented artist Robert Rauschenberg, he accepted two paintings as a bonus payment.)
It also means that deciding what cases to accept is of paramount importance.
Every Wednesday, all Susman lawyers join a conference call to vote yes or no on new engagements. Each attorney gets one vote. A brand-new associate is on equal footing with Manne, Carmody and other senior lawyers such as co-managing partner Kalpana Srinivasan.
Likewise, decisions about new associate hires are voted on by all firm lawyers. (Lateral partners are almost unheard of.)
“Steve and Lee were really committed to the firm being democratic with a small ‘d,’” Manne said, intentionally avoiding the “almost cult of personality” that can arise at firms that revolve around their founding partners. “Steve was very conscious of building an institution, not just a personal business.”
“We’ve had succession planning in place forever,” Carmody added. “Life after Steve and Lee was a topic at every partner’s meeting.”
In recent years, Susman had been pulling away to focus his energy on other projects, including his work as founder and executive director of the Civil Jury Project at New York University School of Law.
Five days before his bicycle accident, I interviewed him about what, at that stage of the pandemic, was still a novel idea: that civil jury trials could be done remotely. “It could revolutionize the way cases are tried,” he told me excitedly, accurately foreseeing potential obstacles and solutions. “It’s a great opportunity.”
Looking ahead, firm lawyers are currently representing the people of Flint, Michigan, in class action litigation about their contaminated water supply and the City of Baltimore in opioids litigation.
They’re also battling Fox Corp on behalf of Flutter Entertainment/FanDuel in a multi-billion dollar arbitration, and Dominion Voting Systems (with co-counsel from Clare Locke) in a series of defamation lawsuits stemming from the 2020 presidential election.
Susman lawyers are also representing Walmart as an opt-out plaintiff in an antitrust price fixing-suit against the producers of broiler chickens. They previously recovered tens of millions of dollars for the retail giant as an opt-out plaintiff in price-fixing litigation involving canned tuna.
Also on the docket are multiple major commercial cases arising from the winter storm that knocked out the Texas electric grid in February.
“We love what we do, and we do it well,” Carmody said. “And the money ain’t so bad either.”
Note: A previous version of this column incorrectly stated that Jenna Greene interviewed Steve Susman five days before his death. The column has been updated to reflect that the interview took place five days before his bicycle accident.
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