A Big Pay Day for Big Law Gay?

So exactly how much did it cost Sullivan & Cromwell to make Aaron Charney go away? That’s the parlor game

So exactly how much did it cost Sullivan & Cromwell to make Aaron Charney go away? That’s the parlor game New York lawyers have been playing since late last month, when a settlement was reached between the white-shoe law firm and its former associate, who had sued S&C for sexual-orientation discrimination. Most memorably, Charney said that a partner dropped a document on the floor and told him to “bend over and pick it up—I’m sure you like that.”

Although it was a P.R. nightmare for S&C—where’s Michael Clayton when you need him?—Charney v. Sullivan & Cromwell offered countless hours of entertainment and schadenfreude for the Big Law chattering class. The lawsuit was first filed in January, so it took nine months to deliver this baby. Now it’s over. A case that started off with a bang, including a raft of media interviews by the plaintiff (on Canadian television!), has ended with a whimper. But how small (or large) a whimper?

Because the settlement terms were secret, lawyers and legal bloggers immediately started speculating over Charney’s payday. Professor Arthur Leonard of New York Law School—who followed the case closely on his blog, Leonard Link—breathlessly wondered: “[W]ill Aaron Charney ever have to work again?” Professor Scott Moss of Marquette University Law School, writing on the widely read PrawfsBlawg blog, was more conservative: “Yes, unless Charney wants to experience his ‘early retirement’ in a rural trailer park.”

Professor Moss, a former employment discrimination lawyer, took a rather wonkish approach to the case. “A very successful early settlement, from the plaintiff’s perspective, usually is about 1-3 years’ pay,” he wrote. But “it’s more common for a good early settlement to be about 6 months’ salary, which would be less than $100K. Settlements that, like Charney’s, occur before much discovery tend to be on the smaller side.”

But if S&C’s goal was to avoid discovery, including potentially embarrassing depositions of its partners—which, even if confidential, probably would have been leaked—wouldn’t the firm have been willing to pay a pretty penny to make the case go away? Note the timing of the settlement: at the height of the fall recruiting season, when law students are weighing offers from competing firms.

“Employment discrimination settlements almost never are a gold mine, and we shouldn’t speculate that this case was,” Professor Moss soberly concluded. But every other aspect of this case has been fodder for groundless speculation, so why break precedent?

Herewith, an attempt to calculate the size of the settlement in Charney v. Sullivan & Cromwell, keyed to some of the case’s strangest moments, which might have exerted disproportionate influence on a jury.

Let’s begin with $500,000. It’s a nice round number, and a rough approximation of two to three years’ pay for Charney. We’ll then adjust it based on various events and allegations in the case (which we assume to be true for purposes of this exercise).

1. The Filing of the Lawsuit. Charney sued S&C by himself—while still employed by, and collecting a paycheck from, the firm. His allegations were shocking and salacious. In addition to the infamous “bend over” comment, Charney claimed that the same partner handed him a document and said, “I just took a shit while reading this, and some might still be on there for you.” Ewww!

Plusses (from Charney’s perspective): the lurid nature of the allegations; the general unpleasantness of the S&C partners, if Charney’s claims about them are to be believed; the case’s vague resemblance to the movie Philadelphia. Add $427,000.

Minuses: the weirdness of suing a firm while still working there; Charney’s shameless publicity campaign—including the announcement of his lawsuit on the “Greedy Associates” message board. Subtract $113,000.

2. The Untimely Demise of the Charney Hard Drive. The destruction of the hard drive to Aaron Charney’s computer became a source of major contention in the case. S&C complained that Charney had destroyed evidence of his theft of confidential information and documents; Charney claimed he thought S&C wanted him to destroy his hard drive, to protect client confidences.

Regardless of why Charney destroyed his hard drive, his thoroughness lies beyond dispute. Ever the methodical lawyer, he boiled the hard drive in hot water, pounded it with a hammer, boiled it a second time, and then tossed the remains. Double, double, toil and trouble!

Minus: the zeal with which Charney attacked his hard drive might be read as consciousness of guilt. Subtract $147,000.

3. “We’ve represented the Nazis.” So why did Charney treat his hard drive as if it were possessed by a demon? Intimidation, he claimed. In a deposition, he testified about a secret settlement meeting with various S&C partners—specifically, threats by one partner “invoking the fact that the firm had represented the Nazis and … that people wrote a book about them representing the Nazis and no one cared.”

Plus: Wow, Nazis. Bad—very bad. A New York jury would not look favorably upon this alleged boast. Add $1,242,000.

So where does that leave us? Let’s see, we get … $1,909,000. That sounds about right, doesn’t it?

Or maybe not. In fact, some might call it laughable. But then, that would merely make it the perfect ending for a case that was an absurd, over-the-top spectacle from start to finish.

Charney v. Sullivan & Cromwell, R.I.P. You will be missed. A Big Pay Day for Big Law Gay?