You probably have never heard of Mary Cranston, unless you use my casebook to teach Business Organizations. Cranston oversaw the massive expansion of Pillsbury Winthrop Shaw Pittman from a firm of 400 lawyers and nine offices in 1999 to a firm with 900 lawyers in 16 offices today. This report of her resignation also refers to her ignominious role in the Frode Jensen affair, which is one of the case studies in the aforementioned casebook. Here is an excerpt from that case study:

Frode Jensen was, by virtually all accounts, a solid if unspectacular corporate lawyer. He had begun his legal career as an associate with Davis Polk & Wardwell, a top New York law firm. After five years, he left Davis Polk for a smaller firm in Stamford, Connecticut, where he was elevated to partner within a year. A few years later, he moved again, this time to the Stamford office of Winthrop Stimson Putnam & Roberts.
Shortly after his arrival, Winthrop’s biggest client in Stamford – the Singer Corporation – was acquired in a hostile takeover and moved its legal work to another firm. Jensen proceeded to build his stable of clients afresh, and ultimately came to represent Merck, Smith-Corona, and many less recognizable but substantial companies. According to Jensen’s complaint, filed in response to Pillsbury press release, “During the period 1988 through 2001 his annual billings for the firm grew from approximately $1 million to a peak of approximately $10 million, and have averaged in excess of $5 million for the past six years. During several of those years his billings were the highest of any Winthrop partner in the firm.”

Jensen had enhanced his stature at Winthrop and, according to his complaint, he “took a central role” in merger talks with Pillsbury Madison & Sutro. The two firms merged in the fall of 2001. As of early 2003, the combined firm had approximately 800 attorneys in 17 offices, mostly in the United States, but also in London, Singapore, Sydney, and Tokyo. After the merger, Jensen sat on Pillsbury’s Managing Board and was co-head of the international mergers and acquisitions practice.

Despite this apparent success, Jensen claims that he became dissatisfied with the firm after the merger. According to the complaint,

he had serious concerns about the relentless, and, in his view, unrealistic focus of senior management at Pillsbury on achieving American Lawyer 100 “first quartile profitability”, and the elevation within the firm of that goal over the goals of professional excellence and successfully serving the firm’s clients. Moreover, the firm faced serious financial challenges, and upheaval in personnel.... In addition, Jensen also became disappointed by Pillsbury’s failure to appreciate the contributions of Pillsbury’s Stamford office, where Jensen worked.... Jensen also was disappointed by the firm’s widespread morale problems, particularly amongst the firm’s associates, due to decisions to lay off associates, due to incomplete or misleading statements made by Pillsbury’s senior management to the firm’s lawyers, as well as due to the firm’s management style.

In August 2002, Jensen was offered a position with Latham, which would appear to most outsiders as a step up in the hierarchy of firms. Jensen accepted the position after notifying Pillsbury. Prior to announcing his departure publicly, Jensen negotiated the terms of his departure with John F. Pritchard, Pillsbury’s Vice-Chair. According to the complaint, “Pritchard specifically promised Jensen that his withdrawal would not be the subject of a negative or ‘defensive’ press statement by Pillsbury, and it was agreed and understood that there would be mutual non-disparagement.”

On September 3, Latham issued a press release touting Jensen’s hiring, calling him “a very capable lawyer [with] extensive contacts and experience in several industries, including the biotechnology sector.” The next day, Pillsbury responded with a release of its own:

    Pillsbury Winthrop, in response to a press release issued by Latham & Watkins on September 3, 2002 announcing that Frode Jensen, a corporate securities partner in Pillsbury Winthrop’s Stamford, Connecticut office is joining the New York Office of Latham & Watkins, would like to correct some possible misconceptions caused by the Latham release. Pillsbury Winthrop previously had intended not to comment on Mr. Jensen’s departure in order to downplay the event. However, as a result of Latham’s press release Pillsbury Winthrop Chair, Mary Cranston, explained that Mr. Jensen’s departure comes on the heels of sexual harassment allegations involving Mr. Jensen and a significant decline in his productivity. According to Ms. Cranston, Mr. Jensen has been largely absent from the Stamford office since the start of this year. “Our firm values respect and integrity above all else. We investigated the harassment claims, concluded that there was a reasonable likelihood that harassment had occurred and responded with a variety of measures. It is always sad to lose a friend and colleague to another firm, however, under the circumstances of the past year, Mr. Jensen’s move is probably in the best interest of all concerned, and we wish him well with his new firm.” Ms. Cranston further stated that to her knowledge, Latham & Watkins did not contact anyone in Pillsbury Winthrop’s management in connection with a reference check for Mr. Jensen.

Why did Pillsbury issue this press release? According to Jensen's subsequent complaint for breach of contract and defamation (among other claims), a "headhunter advised defendants that Jensen’s departure to Latham would be viewed in the legal community as a serious blow to Pillsbury, and that it would make it difficult for Pillsbury to recruit lateral partners from other law firms in the future, and that Pillsbury had to take some action to counter the consequences to Pillsbury of Jensen’s departure."

Jensen ultimately settled his dispute with Pillsbury, and the firm re-elected Cranston as chair. Nevertheless, if you are a lover of irony, you will appreciate this footnote from the case study:

Not long before the Jensen story broke, [Marina] Park[, one of Cranston's colleagues,] published a short advice column for lawyers on teamwork called “Hair of the Dog” in California Law Business (July 1, 2002). In that column, she wrote: “My colleague, Mary Cranston, likes to say that an important part of achieving one’s vision is to learn to pat the obstacles on the head and move on.”

Cranston now has the opportunity to put that advice into practice.

Thanks to the Law Blog for the tip.

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