At any institution with thousands of employees, there are going to be bad people, bad decisions, and bad luck. None of that necessarily reflects on a place’s true character. Yet there is a point at which the occurrence of bad things becomes so regular that it is a pattern, and that does reveal something about the soul of the institution.
In the case of Jones Day, sporadic trouble had been bubbling up ever since the mid-1980s, when the combination of the industry’s rapidly changing mores, the firm’s explosive growth, and the arrival of clients like RJR and Lincoln Savings pushed the staid midwestern firm into an aggressive new phase. The dawn of the Brogan era hastened the firm’s transformation into a take-no-prisoners juggernaut.
To understand this shift, which ended up alienating more than a few of the firm’s own partners, consider what transpired in Germany and India.
In his last months as managing partner, Pat McCartan had announced plans to open an office in Munich. The city was home to Germany’s patent and trademark office, and Jones Day’s outpost there would specialize in helping companies from around the world file applications to protect their intellectual property inside Europe’s largest economy.
Christian Meister was one of the first people hired to work in the Munich office.1 Meister, who was forty-seven at the time, had been a partner in Arthur Andersen’s Munich office. Andersen had audited Enron’s fraudulent books, and now the accounting firm was unraveling. Meister was among the hordes trying to escape, and Jones Day was among the firms trying to recruit him. The firm flew him to meet partners in Washington, New York, and Cleveland. At every stop, there were fancy dinners, expensive champagnes, the works. Meister felt loved. When the Munich office opened in 2003, he was one of its four inaugural partners.2
The partner in charge of Munich was a Jones Day veteran named Ansgar Rempp. Right off the bat, he struck some of the new recruits as a control freak. Before Brogan came to christen the new office, Rempp warned the staff not to speak to the managing partner on their own—and then rushed to halt unsupervised dialogue.3* An atmosphere of distrust hung over the office. At one point, an office manager came to Meister in tears. Rempp, she said, was impossible to deal with: He gave contradictory instructions and then lashed out at the lack of consistency. “The leadership style was management by fear,” the office manager told me.
Jones Day used a system called Carpe Diem to track the hours lawyers worked for various clients. In Germany, patent and trademark lawyers generally charged flat fees—three hundred euros for this trademark application, a thousand euros for that one—and there was no clear way to enter non-hourly fees into Carpe Diem. At the same time, lawyers throughout the firm felt pressure to bill more hours. The message would often come from Rempp: You must go the extra mile. Some lawyers were told that the firm’s stars were billing four thousand hours a year—eleven hours a day, every day, all year.
Mathias Ricker was another patent lawyer in the Munich office. He had a small crew of associates working beneath him, and by 2006 they were complaining to other partners that Ricker wasn’t giving them credit for the hours they’d logged on his behalf.
Meister told me that he started sniffing around. He discovered that instead of having the associates enter their hours into Carpe Diem, Ricker had asked them to write down their hours on pieces of paper and give them to him. Ricker would then enter the hours, claiming a lot of them for himself. In the process, Meister concluded, Ricker was inflating how much money certain clients owed Jones Day. (Ricker told me this was “not true” but wouldn’t elaborate.)
Meister and another partner took Ricker out to dinner. “You cannot do this,” Meister told him.4 Ricker hemmed and hawed, said he wasn’t doing anything wrong, that they needed to meet the firm’s billable-hours targets. Meister warned him that overbilling was a crime. After the dinner, they had a few more conversations, but Meister was not confident that his message was getting through.
And so he escalated the matter. In August 2006, he typed a three-page memo, which he sent to Rempp. It excoriated Rempp for creating a toxic workplace, for not tolerating dissent, for humiliating and debasing employees. “Anyone who criticizes you (publicly) will be punished. Anyone who leaves is insulted afterwards,” Meister wrote. “Seven professionals have already quit this year, which is more than a quarter of our office. People are dissatisfied, disappointed or displaced, and these feelings are not limited to the seven mentioned. The dissatisfaction extends from the staff to the other professionals and deep into the partners.”
Meister’s memo also revealed what he suspected Ricker was doing with billings and explained that there was a rebellion brewing among the associates. Meister described the situation as “fraud against clients, fraud against employees, fraud against the system and thus on Jones Day.” He warned that as the head of the Munich office, Rempp was responsible for the problems. “The exposure for Jones Day is high,” Meister wrote.
Rempp shared the memo with Brogan, who was in Milan. The managing partner summoned Ricker there to see him. A few days later, back in Munich, Ricker approached Meister. “That’s what friends are good for,” he hissed sarcastically.5 “They fired me.” (In fact, Ricker left voluntarily early in 2007.6)
The firm concluded that Ricker had violated its billing policies but that he had done so inadvertently.7 The solution, from Jones Day’s standpoint, was to send letters to some of the companies that Ricker had done work for. “Over the course of the last several years, the Jones Day Intellectual Property Group has experienced tremendous growth,” one such letter began. “In view of the tremendous growth in this practice area . . . we conducted a thorough review of all aspects of our intellectual property practice,” including “our billing practices for patent prosecution matters emanating from the United States and being handled by our foreign offices with a goal of achieving greater uniformity and predictability for our clients. . . . As a result of this review, we have determined that you should receive a credit of €3,931.22 for work previously performed for you. We will apply the credit to future invoices unless you would prefer a direct reimbursement to you of these sums.”8
There were quite a few letters like this, though many involved small amounts of money.9 To Rempp and his allies, this was a fair solution to a problem that stemmed, at least in part, from the idiosyncrasies of the firm’s billing system. But when it came time for Meister to sign a letter, as the responsible billing partner for a particular client, in this case a California company that made water-free toilets, he balked. It was great that the firm was making up for the overbilling, but it felt dishonest to not explain to the clients why they were returning thousands of dollars. Eventually, Meister realized he was going to have to sign if he wanted to remain at Jones Day. So he did.
Rempp told me that he viewed Meister as having a “toxic” attitude, a sentiment shared by some other Jones Day partners.10 Meister’s perception was that Rempp began excluding him from office gatherings and urging colleagues not to talk to him, retaliation for having caused such a fuss.
Meister protested to Brogan, who told him that he needed to make peace with Rempp. A few emails went back and forth until, in 2008, Meister was told to come to Washington to see Brogan. Meister had a queasy feeling; he knew the firm’s management did not smile upon lawyers making a stink. But he perceived Brogan as a fair, honest man, a little gruff, yes, but really just doing what he thought was in the best interest of his extended family, aka the firm. Meister flew to D.C.
After arriving at Jones Day’s imposing building on Capitol Hill, he was ushered into an elegant, wood-paneled conference room that adjoined Brogan’s grand office. It reminded Meister of the type of space in which heads of state might sign a treaty. Brogan and another partner, John Normile, were seated at a large table, waiting for him.
As soon as Meister sat down, Brogan told him that he was being fired. He handed Meister an envelope. Inside was a letter detailing the reasons for his termination, which included that he hadn’t billed enough hours.11 (Normile told me that Meister had made unfounded allegations against multiple colleagues and that “it became clear that he was not acting in good faith but was trying to immunize himself against the consequences of his professional failures.”) Meister walked out of the room. By the time he exited the building and trudged past the proud, sand-colored griffins, his body was shaking. He was convinced he was being punished for flagging improper activity to his superiors. He took out his BlackBerry to call his girlfriend. His phone was dead; the firm had deactivated the device as soon as Brogan passed him the letter.
Back in Munich, Meister lodged a complaint with the city’s public prosecutor, alleging that Jones Day had bilked clients out of hundreds of thousands of dollars. The government opened a preliminary investigation, which was closed in 2010 after the prosecutors did not find evidence of criminal misconduct. The investigators noted in a report that a number of Jones Day lawyers had disputed Meister’s version of events. They also said the trail had gone cold, in part because some records were in the U.S.12
Meister spent the next several years unsuccessfully battling Brogan and Jones Day over the terms of his termination. Still fuming, he felt like he needed his former colleagues to know what had happened. In 2014, he enlisted the help of an IT pro in his extended family and harvested the email addresses of Jones Day partners from the firm’s website. One Sunday that June, he fired off an email to the whole group. “Blowing the internal whistle is dangerous in this firm,” the subject line read. Meister recounted a condensed version of what had happened, saying Brogan had fired him in “clear retaliation for my refusal of participating in or covering systematic and substantial overbillings. . . . Are all these secrets in the firm really in the interest of the partners? And do they lead to a better firm? To an ‘institution of law’? To fairness?” He went on: “I tried to stand up against overbillings that are financially attractive, but not in the interest of a law firm of utmost ‘integrity.’”
The higher-ups at Jones Day set out to paint Meister as unhinged. His email was just angry enough, bordering on hysterical, that it worked. It was easier to accept that this guy was crazy than that there might be something not-quite-right about the law firm to which partners had pledged their undivided loyalty.13
The mess in Munich was tame compared to Jones Day’s self-inflicted fiasco in India.
Growing up in the mountainous state of Himachal Pradesh, Jai and Anand Pathak were taught to love the law. Their father, Raghunandan Pathak, was the chief justice of India’s supreme court. When Jai, the eldest of the two brothers, got it in his head to become a lawyer, his father—ever on the lookout for perceived conflicts of interest—told him he was not welcome to practice law in India so long as he, Raghunandan, sat on the high court. So, after receiving his law degree at Oxford, Jai came to America and earned his master’s at the University of Virginia School of Law. Jones Day recruited him from there. Jai didn’t know much about the firm, but he got the sense that he’d have more opportunities to learn on the job there than at the New York firm that had also made him an offer. Off he went to Cleveland.
It was the mid-1980s, and Jones Day was in a groove, the leading American law firm that wasn’t headquartered on a coast. Cleveland, however, was a strange place. It was cold! And not exactly vibrant. One November night, Jai found himself locked out of his apartment. Unable to rouse anyone, and with the city shut down for the night, he slept on a park bench. Still, he loved being in America and working for Jones Day. Three years later, in 1988, his brother Anand joined the firm, too.
In the 1990s, McCartan signed off on a plan to expand into India. It was one of the world’s hottest economies and most desirable markets, with countless Western companies (many of them Jones Day clients) setting up shop there to take advantage of the inexpensive labor. Who would lead this new office? Jai was by now a partner, and the Pathak name was invaluable in Indian legal circles. His father had recently stepped down from the Supreme Court of India, and the thirty-five-year-old Jai was soon on his way to his native country.
Unlike the offices that Jones Day had opened in other countries, the Indian setup had to be handled delicately. Indian law barred foreign law firms from having offices,14 and the country had rigid controls on foreign currency moving across its borders. With the help of Indian attorneys and accountants, Jones Day came up with a work-around. Jai would open an “associate office,” with its own name, Pathak & Associates, its own bank accounts, payroll, and the like. Jones Day covered the costs of getting Pathak & Associates up and running.15 But it had a single owner: Jai. The two firms were separate. When Jones Day announced the venture in November 1995, it said, carefully, that it was “establishing a practice in India.”16
At first, everything went well. Jai got a rush from participating in the global expansion of this proud firm. McCartan and other leaders traveled to Delhi to see the office, and Jai organized a cocktail party for Indian clients to meet the Jones Day brass. The thinking was that once India liberalized its protectionist laws, which was widely expected to happen within a few years, Jones Day would have a launchpad from which to enter the world’s second-most-populous country. In the meantime, some of Pathak & Associates’ biggest clients—like Toyota and the auto-parts manufacturer Dana Corporation—were Jones Day customers that needed local representation in India. Soon, Jai opened a second Pathak & Associates office, this one in Mumbai.
Early on, local lawyers accused Pathak & Associates of being a front for a foreign firm. McCartan and Jai, among others, assured Indian authorities that this wasn’t true. While both firms were enjoying the fruits of collaboration, they were separate entities.
Within months of becoming managing partner, Brogan decided to shake things up. “Steve concluded that Jones Day’s Indian operations were rudderless and were not on a path to becoming a Jones Day–quality office,” one of Brogan’s lieutenants, Geoff Stewart, told me. (Jai later left Jones Day amid a bitter dispute with Brogan.)17
Brogan asked Anand Pathak, Jai’s younger brother, if he would take over India. Anand viewed Jones Day with something approaching reverence. When he had been a summer associate, the firm was moving into new offices in Cleveland, and there was a shortage of desks. He was told to hole up in Dick Pogue’s office. It was crammed with legal artifacts, photos, memorabilia. Anand was awestruck; here he was, a twenty-something Indian immigrant, parked in the office of one of America’s most renowned antitrust lawyers. Anand saw Jones Day—especially in the Cleveland mothership—as a place of meticulous, honest lawyers who valued their integrity above all else.
Anand’s ambition was to follow in Jai’s footsteps and make partner. Finally, in 2000, he got the promotion. He took his wife to his first partners’ retreat in Palm Springs; he’d been pulling so many eighteen-hour days that they’d hardly seen each other lately. His wife took one look around the resort, jammed with hundreds of partners, and her face betrayed her disappointment. She had figured her husband had been elevated into an elite group. This gathering was too large to be elite. “Anand, what did you really aspire to do?” she asked. “Just be one of so many?”
It was one of those flip remarks that, once you heard it, you couldn’t unhear. The more Anand obsessed, the less he was sure that being a partner at a giant corporate law firm was his destiny. He needed to do something with his life that was fulfilling, that was his. So, when Brogan suggested that he oversee the Indian operation,18 Anand agreed. The ownership of Pathak & Associates was transferred into his name.
Jai had been smooth and charming. Anand was not. Some lawyers at Pathak & Associates (it would soon be renamed P&A Law Offices) thought he was difficult; there was no question he was a stickler for rules. At Diwali, the five-day Indian festival of lights, P&A traditionally gave its staff small gifts, generally a box of candies. Anand ended the practice. He said he worried it would violate the Foreign Corrupt Practices Act, the U.S. law that prohibits American companies from bribing foreign officials. “It was a box of sweets!” one P&A lawyer grumbled to me.
But Anand had more substantive concerns, too. There had been a profit-sharing agreement in place between Jones Day and P&A. And Jones Day leaders kept mentioning—sometimes in passing, other times as a boast—that they had offices in India. In Anand’s view, all of this was stepping right up to the line, maybe over it. P&A was legally required to be an independent entity, and its finances needed to be walled off.19 Anand told his American colleagues to stop saying they had Indian offices.20 He ended the profit-sharing arrangement. To emphasize the separation, he resigned from the Jones Day partnership, reverting to “of counsel” status, which he viewed as akin to being a consultant, not a full-time employee.21
This was still a mutually beneficial relationship. Lots of legal work came P&A’s way courtesy of Jones Day, and Jones Day could keep its clients happy by referring them to a trusted local partner for whatever they needed in India. Jones Day continued to cover certain expenses for P&A. And while P&A handled work for other law firms, like Ropes & Gray and Goodwin Procter, Anand told the American Lawyer in 2004 that “our heart belongs to Jones Day.”22
Brogan, however, insisted that all of P&A, not just its heart, belonged to Jones Day. He and his team viewed P&A as essentially a subsidiary, even if that wasn’t how it had been described to Indian officials in order to comply with the country’s laws. “P&A was entirely a Jones Day operation from beginning to end,” claimed Geoff Stewart, who joined Jones Day four years after Jai opened Pathak & Associates.
The attitude worried some top Jones Day lawyers. During a meeting of the firm’s partnership committee around 2004, someone mentioned the Indian offices’ improving financial performance. As the meeting wrapped up, Bob Weber asked about the arrangement. Wasn’t P&A supposed to be independent? If so, why were its finances any of Jones Day’s business? Brogan cut him off. “Look, Bob, we all know what’s going on here,” he snapped. The message seemed clear: The supposed independence was a mirage meant to pacify Indian authorities.
By 2009, P&A’s bank accounts had what Brogan and his crew regarded as a surplus of cash—money that they argued was the property of Jones Day. The firm instructed Anand “to apply the funds to matters within India that furthered Jones Day’s interests.”23 Specifically, Brogan wanted Anand to make a couple of large contributions to charitable organizations: $250,000 to the American India Foundation24 and $500,00025 for the Congregation of Holy Cross, a Catholic group that was planning to open a college in the Indian state of Tripura.
The directive—and especially the money for Holy Cross—disturbed Anand. First of all, what was Jones Day doing ordering him how to use his money? More important, India had strict laws governing foreign contributions to charities and other entities inside India. The law was intended, in part, to prevent the financing of terrorist groups. One way to circumvent this law was to have contributions made by someone in India on behalf of an outside party. Anand told me that while he knew the proposed contribution to Holy Cross had nothing to do with financing terrorists, he nonetheless worried it would invite government scrutiny, especially since Tripura was in a restive corner of the country. He consulted with Indian lawyers, who he said confirmed his fears: Brogan’s orders were a recipe for trouble. Anand refused to make the contributions. He told his Jones Day contacts that they were asking him to violate the law.
Brogan wasn’t accustomed to hearing no. He amped up the pressure. Anand received a series of increasingly angry phone calls and threatening letters from Cleveland and Washington. “This is a directive,” Geoff Stewart warned. Brogan himself got on the phone at another point to ram the point home.26 (“Steve became involved when it became clear that Jones Day had a rogue lawyer who was not complying with the firm’s instructions,” Stewart told me.)
Anand wouldn’t budge. He couldn’t believe that the firm he had trusted and admired and regarded as home was now demanding that he do something he feared was illegal. And they were still pressuring him even after he had voiced those concerns.
In August 2011, Brogan escalated things further. He wrote a letter to the Indian Ministry of Home Affairs secretary, seeking his blessing to have P&A make the charitable contributions. A response came back that this sounded like a commercial dispute between private parties.27
The next year, having given up on Anand and P&A making the donations, Jones Day’s foundation contributed the half million dollars to Holy Cross International (an American legal entity) for “the establishment of a college campus for Holy Cross College.”28 When the campus opened, Brogan and Stewart traveled to Tripura for a ceremony.29 Shortly thereafter, as Jones Day pitched for a big assignment working for the city of Detroit, the firm highlighted the Holy Cross gift to burnish its credentials as “a civic-minded firm.”30
That might have been the end of the matter, but Brogan didn’t let it go. Perhaps he truly believed that P&A belonged to Jones Day. Perhaps he was worried his authority might crumble if he didn’t strike back against this “rogue lawyer.” In any case, in April 2014, Jones Day filed a lawsuit in the Cuyahoga County Court of Common Pleas in Ohio. It accused Anand of stealing Jones Day’s assets. It also made a number of squishier allegations, such as that Anand delegated too much to his office manager, “a woman with no formal management training.”
Anand already knew Brogan was playing hardball, but he was shocked to learn that the firm had sued him. For advice, he turned to some of his former Jones Day colleagues, who told me that they viewed the saga as evidence that Brogan was out of control. “This was as bad conduct as I ever saw at Jones Day,” a decades-long veteran of the firm said. “It is a black mark.” Jones Day never managed to serve Pathak with the lawsuit, and the firm withdrew it in 2015. (“The only reason the lawsuit didn’t proceed was that Anand persistently evaded service of the papers, to the point of refusing to leave his house,” Stewart asserted. Anand acknowledged that he was never served but denied that he was hiding. “I’m sick and tired of their lies,” he told me.)
Jones Day wasn’t done. A partner, Robert Ducatman, filed an ethics complaint against Anand with Ohio’s bar association. The complaint accused him of dishonesty, untrustworthiness, and being unfit to practice law. As an associate, Anand had done work for Ducatman and regarded the lawyer as a mentor. This felt like a betrayal.
In his response to the complaint, which Anand drafted with the help of the former Jones Day partners, he explained to the bar association that the relationship between Jones Day and P&A was, by legal necessity, arm’s length. It was not Jones Day’s law firm or Jones Day’s money. The bar association asked Jones Day for evidence to refute Anand’s argument and, having failed to receive anything adequate, informed Ducatman that it was dismissing the complaint.31 (Anand, who by then had earned a reputation as a distinguished lawyer in India and was registered to practice in California, suspended his bar membership in Ohio anyway.)
While the legal actions were pending, one of the ex-partners advising Anand decided to call Ducatman. The former partner respected Ducatman and figured he could reason with him. The former partner pointed out that when Pathak & Associates was first launched, Pat McCartan had signed documents attesting to the fact that it was legally separate from Jones Day. “Do you really want McCartan deposed on this shit?” the former partner asked.*
“You know what I’m dealing with,” Ducatman responded. In other words, the former partner surmised, he was just following orders.