Russell McVeagh admits serious mistakes as sexual misconduct probe released

Dame Margaret Bazley found Russell McVeagh missed the warning signs.
Russell McVeagh chairman Malcolm Crotty will address media today.

Victoria Young reports on the probe on Russell McVeagh.

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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

LATEST: Where to for Russell McVeagh after Bazley 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. 

The incidents 
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. 

Firm's response
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. 

RELATED VIDEO: Do Russell McVeagh's critics live in glass houses? NBR's Victoria Young interviews consultant Pamela Young (Jun 15)


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38 Comments & Questions

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It is amazing how many organisations just ignore things that are happening under their noses and when they finally do take notice, it is normally to allow the person involved to move on with the firms blessing to wreck havoc on another organisation. Of course in this case much much worse because of the nature of the offending.

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It's not unlike the rubbish unfair dismissal laws we have here. Lawyers cost a fortune to build up the case file, then to correspond with the former employer, then take the case to court.
The compensation is capped to a level that is little more than your legal costs of establishing your case and taking it to court.
If the case is found in your favour you are "rewarded" with your name plastered all over the papers for google eternity, for all future employers to see. Even a wrongful dismissal case won, is hardly CV boosting.

The employer at worst has to pay a pittance (legally capped compensation), but probably more commonly does not get taken to court because the stress/cost/publicity;legal costs and wet bus ticket compensation hurdles makes it prohibitory for most employees to pursue.

The compensation and penalties for poor employment behaviour should be much higher, to deter and to compensate a person for the monetary costs and emotional costs of having to face off with the employer and their bulldog lawyers through court. If found guilty the employee should have a right to name suppression if they so wish, and the employers name should be the one highlighted in the news.

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Something that has been a systemic issue in Accounting & Law firms as well as Hollywood for 20+ years is an issue now
Horrific what has been done but everyone knew about it - including most of new recruits
Until there is a real penalty - jail, forfeiture of houses etc it will only become less overt. It is the nature of humans particularly type A's

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This is common knowledge
Now PWC and all other big professional firms, banks etc need to do similar reviews because this behavior is not uncommon and is totally unacceptable

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AFR covered an article on Deloitte in the US - looks like the police are looking at obstruction of justice charges or something - again over a sexual assult.

So you are right it is not just law firms....and before everyone says NZ is different RM shows it is not.

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Despite what Adrian Orr says about his banking & insurance buddies
Why is no one charged - because they were so good in stopping when it blew up 2 years ago?
Need at least 1 lawyer under the bus for this

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Fair question
Is there a justice system in NZ for all?
Probably not even Law Society wet bus ticket slaps

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This profession will continue to operate on the presumption they are entitled to respect, and that the Law Society will always protect them first - unless their behaviour gets into the public domain, as in this case.

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Lawyers reviewing Lawyers
Accountants reviewing Accountants
Doctors reviewing Doctors
Great PR spin since it blew up - fortunately people aren't that stupid
No charges, no naming, Good Old Boys good to go

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My hubby was wondering if this means his lawyer will no longer send a Supermodel down to reception to take him up to the 15th floor?

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Sadly it does.

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Poor treatment of staff by managers is common everywhere and HR invariably side with the manager - particularly if it's not the stereotype sexual harassment which is really just one small part of what goes on.

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No findings of sexual harrassment for the past two years. This is a good outcome for RM.

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Sadly those abused cannot come forward openly or black balled by Law for life
All they can hope for is dirty secret protects them going forward
All very 3rd world

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She interviewed over 200 people, if this behavour continuned then it would ave been pulled up. Everyone in the industry knows that RM sorted this issue a few years back and that it arguably the more safer firm to work at. However, in regard to long hours and a harsh workng environment, that wont change unless they all decide to makes less than 1m per year for 100% partners. Just look at how many partners they have compared to other big firms.

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Yes if it is the truth, a great outcome and long may it continue.....

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Seems to be a bit racist in that only people of colour get charged / go to jail
If.....its all true.....However lawyers the best people at losing / burying evidence & witnesses including intimidation - give me a break
They have totally got away with this - hope their families are proud

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My comment was - if it is true that there has been no sexual harrasment at RM for the past 2 years that is a good thing. I am not saying what happened before then should not be dealt with, it should be.

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Yes I was going to comment on that one. So they are no longer allowed to have a work hard culture? That is just plain ridiculous. If you don't want that and the rewards that go with it then go to another firm.

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Looks like McVeaghs really knew how to throw a party. Cheerleaders going, no more bikinis at Miss World contests. I suppose it will be pick on the lap-dancers next. Oh when will it all end?

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Did Dame Margaret talk to any of the men accused? Or are we supposed to just believe the clerks that this is exactly what happened? 

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It says she talked to one of the people by phone, not sure about the other.

If it did not happen why did the men resign / leave etc......I suspect the oneous of proof was very much on the victims side (probably more so than a court of law) as it was mates protecting mates.

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That's post hoc reasoning. There are any number of reasons for those men to decide to leave, such as to avoid the snowballing outcome of potentially false claims of sexual assault and as a result of a pre-emptive board acting on hearsay trying to limit damage to the company without properly gathering evidence. 

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Yes that could be true and I might win lotto - probably similar odds in my view.

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I just don't see why everyone's so comfortable with anecdotal evidence the moment the conversation becomes about anything sexual

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There is a real fire here
Not usual PR BS smoke & mirrors
NZ really is a banana republic
Wont help Jacindas next role at UN with Helen

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"However other staff reported on the event..." - so maybe some witnesses.

The second and third instance .... so repeat offending maybe.

Not sure from what has been presented we are talking about anecdotal evidence.

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The plural of anecdote is not data. Ten people could report on the event and we still wouldn't know what happened. Maybe the second party (the man) has a different conception of what happened, but without talking to him, we don't know. I thought these people were lawyers?!?

But as they say, there are three sides to every story: yours, mine and the truth.

All we know is that some men have lost their jobs because, for whatever reason, society allows anecdotal evidence to decide the outcome when it comes from women. On top of that, this company will lose serious cash and clients due to a handful of unsupportable stories that don't even rise to the level of crime. 

Maybe NZ is a "banana republic" as one commenter above said. But I don't think the corruption goes in the direction this person assumes...

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If really sorry
Or is it really sorry been caught?
They earn gazzillions

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Would love to name the bank who our daughter in law where she was left fully unsupported after sexual harassment at a bond building weekend.
Witnesses wouldn’t support her due to being given a warning, the old boys club attacking her saying she must have been mistaken. No wonder so many don’t lay a complaint as she’s now out of a really good job she loved and a great career ruined.

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Two persons behaving badly at a company the size of Russell McVeigh
Get a life.

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NZ led world re woman to vote
As a whole nation we are worse than Hollywood with this whitewash of disgusting behavior
This effectively condones & endorses it
Come on Winnie - show some leadership here

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I'm thinking of suing my employer because a female colleague once stood behind me and gave me a friendly shoulder massage without asking. Disgusting behaviour! 
Get a grip

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Many years ago a female workmate used to slap me on the butt, looking back I don't how I survived it. Imagine what would have happened if it had been the other way round.
People are horrified at things that used to go on. But it must be remembered it was different times back then, and things that horrify people now were pretty much the norm back then. You can't change the past.

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I wonder how many staff left companies due to victimisation and a subsequent lack of support, i myself had to take matters in my own hands when my wife was accosted and her firm refused to take action as he was a "high achiever".

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Seems too surreal to be fake
Lots of professionals aware + openly discussing
NZ is a wild west banana republic - but we knew that
Size & noise an indication - as well as other firms silence
Pay those hurt + put offenders in last chance counselling
Big achievers + earners shouldnt get a get out of jail free card

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When I am presented with a conundrum, I frequently ask myself - "What would the Roman Catholic Church do in this circumstance?"
:-)

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