Russell McVeagh has admitted it made ''serious mistakes'' and has issued a full apology ''for action and inaction'' over events relating to the summer of 2015-16.
Newsroom revealed earlier this year that two lawyers from the firm's Wellington office left after that summer, following allegations of sexual assault and misconduct toward interns in the firm's summer programme.
An external review requested by the firm and led by Dame Margaret Bazley says there was no one in charge in Wellington who had oversight of the teams there and that one team had ''cultural issues'' that were impacting staff, including excessive drinking.
RAW DATA: Read the full report
The review does not explore any further action against these two men, one of whom participated in the review by phone. However, it notes it was wrong for the firm to continue to work with one of the men, who continues to live in Wellington and, according to NZ Law Society records, holds a practising certificate.
Dame Margaret's probe, which interviewed 237 people, makes almost 50 recommendations including culture change, that the chief executive's job description be reviewed and that a head of the Wellington office be appointed. Dame Margaret did not have any power to compel people to give information to the probe or give information under oath.
Dame Margaret's review sets out three major incidents that happened at the firm about which the summer clerks complained.
The first was at a firm Christmas party in Wellington, where a partner acted inappropriately toward four of the summer clerks. One clerk says the partner put her hand around his waist, led her away from the bar, tried to get her to skull (drink rapidly) her drink and kiss her on the cheek.
Another clerk said he touched her bottom and waist many times while another was dancing when the man kissed her.
A fourth was dancing when the partner tried to pull her aside, grab her breast and kiss her, and then tried to get into her taxi as she went home.
''The four summer clerks told me that at the time they felt intimidated, confused and uncomfortable. They told me they were distressed this had happened at a work function where they thought they should have been safe,'' the report says, noting that at the time the four clerks did not know of what had happened to each other.
The second incident occured at a smaller team Christmas party where partner hosted solicitors and clerks at his home. ''The incident of inappropriate sexual conduct by the male partner was reported to have occured in the latter part of the evening.''
The third incident involved the other male lawyer and occurred after the clerks and lawyers went out drinking, and the male partner bought drinks for the group throughout the evening. ''It was later in the evening that there was a reported incident of inappropriate sexual conduct by one of the male solicitors.
This would later be reported as occuring at Wellington's El Horno bar.
Dame Margaret found the firm missed the warning signs in leading up to these incidents, especially since staff had been leaving the partners' team and expressing their concerns in exit interviews.
''While the chief executive and board were aware of some of the drinking issues with that partner, they did not adequately address or monitor the team or the partner, despite the obvious power imbalance issues that compounded the risk."
Earlier this year Russell McVeagh partner Pip Greenwood told NBR the firm was aware of his drinking but claimed it could not have foreseen what eventuated.
According to the report, in February, following the events, once the clerks had realised their common experiences with the same partner, they raised it with a human resources director, who is not named in the report.
However, other staff members had also reported on the events and, by January 22 the board had learned of the second and third incidents. According to the report, ''the board then moved decisively to reach agreement with the partner concerned for him to leave the firm.''
No disciplinary action was taken against the solicitor involved in the nightclub incident because he agreed he could no longer work at the firm and he took leave before resigning and joining another firm.
Dame Margaret's report says the incidents were managed poorly, no one person was in charge and there were no HR staff based in Wellington in January 2016.
Chairman Malcolm Crotty says in a statement that the board and partners accept the findings.
''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.
''We believed we had a speak out culture and it is clear from this review that we were misguided in this belief.''
How we got here
Since the incidents came to light in the media, this country's universities cut ties with Russell McVeagh, pending the outcome of today's review.
The NZ Law Society responded by launching a working group into its own processes when dealing with sexual misconduct. The legislation which the NZ Law Society is set up under prevents it from confirming or publicising any investigation or complaint made against any of its members.
The full report is available on Russell McVeagh's website this morning.
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