The Wall Street Lawyers in Washington

...He obviously should have disqualified himself from taking any part in the decision...

...that task was handled by the Washington firm, Covington & Burling...

...He filed suit to dissolve three recent ITT mergerswith Grinnell Company, Canteen Corporation, and Hartford Fire Insurance...

...Kleindienst could act on ITT, but only Mitchell could authorize the full-scale review Geneen wanted...

...But he stated it often enough to earn some due bills from the Administration...

...Davis, Polk was not ITT’s counsel in the antitrust actions...

...One wonders whether GM and ITT would agree...

...And the government made a deal...

...His problems may have arisen from this lawsuit, but it was his own conduct that brought them on...

...As Burns remembers their first meetin from the outset Walsh was ’tery aRrasive.7, “Is this the policy of John Mitchell...

...Burns brought the document to Seymour’s office...

...He soon found out...

...Reluctantly, Burns did so...

...There is a defense of Carswell,” he says, “but I’m tired of stating it...

...With the meticulous logging necessary for billing, Davis, Polk’s records showed the conversation lasted two minutes...

...one man would call the tune and set the tempo...

...We went to Kleindienst with the hope that he could bring Mitchell back in and at least get his consent to a full-fledged presentation to him and the Secretaries of Treasury and Commerce of Mr...

...He was born in Canada, raised in Queens, educated at Columbia and Columbia Law...

...Walsh told him that he was sending down a memorandum requesting “government-wide review of the Administration policy toward mergers and diversification...

...Solicitor General Erwin Griswold-in charge of Justice Department proceedings before the Supreme Court-was neutral...

...But Mollo replied, “That’s when you’re dealing with a different .kind of lawyer...

...a $25,000 fine against Transit Mix Corporation...

...It seems strange...

...Do you mind if I check with him...

...He resigned in 1957 when William G. Rogers, a colleague from the Dewey days in the district attorney’s office, was appointed U. S. Attorney General and brought Walsh to Washington as the Justice Department’s Number Two man...

...Burns asked that he be allowed to remain until the GM case was concluded...

...Third, “the practice of law must be the primary interest and that practice shall be solely as a member of the Cravafh team...

...It was an open and honest request, and judgment was to be made by them...

...Walsh, Fritz Schwartz, Davis, Polk’s senior partner, and associate Guy Sturve conferred with ITT President Harold S. Geneen and Howard J. Aibel, its general counsel...

...At the same time, Walsh was chosen to head the American Bar Association’s (ABA) committee on the federal judiciary...

...General Dynamics was a Cravath client...

...First, like a symphony orchestra, it should be tyrannical...

...That left Kleindienst in charge of the case, presenting Walsh with a problem...

...Unlike John McCloy, who had left the firm following disagreements over his government service in the forties, Gilpatric returned each time with enhanced stature, and, according to critics, each time with a major defense contractor in tow as a Cravath client...

...The irony, according to Burns, is that it would have cost GM only two dollars a day to meet federal antipollution standards at the Tarrytown plant...

...It’s such a heavy-handed way to do it,” he says, “but then you don’t get a reputation for being tough by being discreet...

...The Wall Street Lawyers in Washington by Paul Hoffman There are big firms and small firms...

...I don’t know,” Burns replied...

...A few days later, a Davis, Polk lawyer arrived in Burns’ office with a memorandum on the case and “an oral message that Walsh was on his way to Washington to give the memo to Dick Kleindienst...

...Nor is it necessarily the best...

...That is the relationship I had with Judge Walsh, the fact that he was a former Deputy Attorney General,” Kleindienst said...

...Burns was ordered to drop the criminal actisn against GM and work out a civil settlement...

...Then who wanted the delay...

...Two Minutes Does the Trick On April 16, Walsh called Kleindienst...

...The letter went on: At least once before, GM attorneys assumed no one would be willing to lay his career on the line to see that the General Motors Corp...

...He wasn’t long in cashing them...

...Consider the career of Lawrence E. Walsh, a senior partner of Davis, Polk & Wardwell...

...As his executive assistant he named John M. Burns, 111...

...and $44,047 in 1971...

...With ITT, he never got the inter-departmental review he sought...

...No Apologies Needed with Walsh Burns checked with his superiors in Washington and was told the case against GM was “the best they’d ever seen...

...Soon the figures started escalating...

...According to Burns, Mollo, practically a career assistant who specialized in criminal cases, considered water-pollution cases a waste of the office’s efforts...

...The Cravath system tended to produce an able and hard-working, if narrow and unimaginative, lawyerwhat law students call a “grind...

...When it had to deal with John Mitchell’s Justice Department, it showed up with Lawrence Walsh of Davis, Polk...

...45,768 in 1970...

...His old friend Rogers became Secretary of State and appointed Walsh to assist Henry Cabot Lodge at the Paris peace talks...

...Washburn Wire Company was fined $125,000 for polluting the Harlem River, though the penalty was suspended pending a clean-up...

...Nearly two years later, the question of whether GM complied with ie decree remains open...

...As Walsh later testified: “Mr...

...Second, the firm would prosper not on who it knew, but on what it knew...

...it paid the firm more than $300,000 in fees between 1958 and 1963...

...Davis’ idea of public service was that each person is expected to give 10 per cent of his time to public service...

...to see if he could persuade them, the Department of Justice, to consider a review of [its antitrust policies...

...Let’s start with Cravath, Swaine & Moore...

...Mayor Lindsay chose Walsh to head a commission to study the Police Department...

...There was never any effort to have him fired,” he insists...

...In any event, the result of Walsh’s visit was clear...

...ITT’s acquisitions had received the green light from the Johnson Administration, but they came under a heavy attack from the dedicated trust-buster appointed by Nixon and Mitchell- Richard McLaren...

...Please be advised that there are many in this office who would also lay their careers on the line to insure that this office treats General Motors exactly the same as any other firm...

...When Mollo gave Walsh two extensions of time on the case, Burns protested: “That’s not our policy...

...Within the firm merit would be the only qualification...

...But ITT was so concerned about losing the Grinnell case, and thereby creating a bad precedent for the more important Hartford merger, that it hired extra help-Lawrence Walsh...

...The state’s chief judge, Stanley Fuld-another colleague from the district attorney’s office-picked him as special prosecutor in the impeachment of a tainted judge...

...he asked...

...I make up for those who don’t...

...In this post, he passed on all of Nixon’s judicial nominations...

...When 1TT Needs the Very Best Walsh’s next case involved one of‘ Davis, Polk’s oldest and biggest clientsITT...

...later he admitted that he’d been fired-though the exact reasons were never disclosed...

...Cravath’s emergence from isolation also saw its partners taking a more active role in its clients’ business affairs...

...It was his high-handed approach...

...In fact, he claimed he hadn’t even read Walsh’s memo, merely turned it over to McLaren’s office...

...Nader’s discoveries...

...Though he served only three years, he still retains the title “Judge...

...He quickly developed what one lawyer termed “a reputation for knowing and doing exactly what was expected of him...

...To some it seemed as if ITT was saying, “You’re going to win, so let’s make a deal...

...It hires attorneys as the occasion demands...

...For a while, Seymour insisted that Burns had resigned...

...Ironically, Walsh considers that he lost both the GM and ITT actions...

...In 1961, Walsh returned to Davis, Polk-this time as a full-fledged partner...

...I do not consider that an interference...

...Too much imagination, too much wit, too great cleverness, too facile fluency, if not leavened by a sound sense of proportion, are quite as likely to impede success as to promote it...

...Walsh’s outside activities picked up after Nixon’s election...

...As a result of columnist Jack Anderson’s disclosure of the now-famous Dita Beard memo, ITT’s antitrust settlement was headline news for months...

...other senior partners serve on the boards of Time-Life, Chemical Bank, General Dynamics, and IBM...

...Partners would not be brought in from the outside...

...Cravath has always I been wary of the man who came on too fast, who posed a threat to the established order...

...Yet he harbors Paul Cravath’s old misgivings about the practice: “I think there’s a conflict of interest when you’re acting both as counsel and as a member of the board...

...It’s a subjective judgment, to be sure, but most New York lawyers rate Sullivan & Cromwell as No...

...But Kleindienst had also professed neutrality...

...GM does not retain any one law firm as its general counsel...

...In 1969, Whitney North Seymour, Jr...

...In the wake of the State Liquor Authority scandal, Governor Rockefeller named Walsh to head a panel to recommend revisions in the alcoholic beverage laws...

...instead, the cream of Ivy League law school graduates would be hired as “law clerks” (now called “associates”), paid salary-a startling innovation at the turn of the century-indoctrinated in Cravath’s methods, and groomed for leadership...

...This time, Burns says, Walsh was “very charming and pleasant...

...Senator Edward Kennedy put the question to McLaren: “Who did care whether there was an extension...

...became U. S. Attorney for the Southern District of New York...

...A few weeks ago, Mr...

...Yet, he agreed to the delay ‘because “the Deputy Attorney General wanted it...

...This would mean no sideline practice, no dabbling in business, and it would pretty well preprevent possible conflicts of interest, Cravath lawyers would not only be barred from serving on the boards of directors of client corporations, but from owning stock in them as well...

...By April, 1971, the first of the cases-Grinnell-was ready for argument before the Supreme Court...

...The question of why remains open...

...At the outset of their practice,” said Swaine, “Cravath men are not thrown into the deep water and told to swim...

...Judge” to acquainta’nces, “Ed” to friends, Walsh is a thin, wiry man, a self-professed “square...

...It’s a conflict Cravath has yet to resolve...

...That ended Walsh’s role in the case...

...I didn’t even know at that time who Lawrence Walsh was,” Burns says...

...lawyers would be hired and promoted on the basis of their legal acumen, not on their ability to bring in business...

...His tenure at Defense sparked one of those controversies to which Cravath seems peculiarly prone...

...North Carolina Senator Sam Ervin, no novice at arguing before the Supreme Court, called it “a most interesting letter...

...Italics added.] With kindest regards, Sincerely yours, Lawrence E. Walsh “There is a high probability tfiat it will succeed...

...Although a Democrat, Burns had a long association with Seymour, having managed his successful campaign for the state senate and his losing race for Congress, as well as having served as Seymour’s legislative aide in Albany...

...And ITT cared,” Kennedy added...

...The best answer seems to be that Kleindienst ordered the delay as a courtesy to Walsh...

...A Wall Street lawyer’s public service can also benefit his clients...

...1. But Cravath is a model of how a Wall Street firm is organized and how it operates...

...Seymour refused...

...I get about 1,000 billable hours a year...

...that these mergers, large and small, served an important purpose in avoiding stagnation in management, stagnation in industries, and in giving companies like ITT, which has large foreign commitments and risks, a more stable and safe diversified base in this country...

...Do you mind if I go see him...

...McLaren was opposed...

...Walsh had represented GM only once previously-on the legal aspects of GM’s 1970 annual meeting in which the management slate was .challenged by Ralph Nader’s “Project Responsibility...

...another $25,000 fine against Kay Fries Chemicals...

...It brought him into almost daily contact with his successor as Deputy Attorney General, Richard Kleindienst-an interesting assignment for a lawyer who defined his area of specialization at Davis, Polk as “any matter relating with the Department of Justice once it got above the routine level...

...Using a little-enforced provision of the Refuse Act of 1899, he racked up a startling record-a $5,000 fine against Consolidated Edison...

...Mitchell’s disqualification,” Walsh said...

...Burns-who returned to a small Wall Street securities firm, and later ran for Congress from the Hudson Valley-blames Walsh for his ouster...

...They want as their counsel a man who is primarily honest, safe, sound, and steady...

...And the Justice Department absolved him of any “legal or ethical conflict of interest...

...Walsh estimates that the ABA assignment takes up more than a third of his time-about 700 hours a year...

...With two hundred lawyers Shearman & Sterling is New York’s largest law firm...

...As it turned out, Geneen made the approach to the White House through others...

...But few lawyers in New York remained as busy with extracurricular activities...

...Can a former Deputy Attorney General wander through the Justice Department offices on an out-of-town visit without paying at least a courtesy call on his successor, especially one with whom he was in almost daily telephone contact...

...Geneen testified that he “asked Judge Walsh...

...Cravath himself wanted it that way...

...The settlement was signed at 10 p.m...

...Walsh denies that he had anything to do with Burns’ ouster-though he later admitted that when he went to Washington he carried a letter to Kleindienst complaining about the New York assistant, but never delivered it...

...The younger Seymour named his chief assistant, Silvio Mollo, acting U. S. Attorney for the GM case...

...Although Walsh admits that his approval of Carswell “disappointed a number of my friends,” he continued to defend his action long after the Senate rejected the nominee...

...It is our hope that after reading the enclosed memorandum, which is merely a preliminary presentation, you and Dick McLaren and the Solicitor General would be willing to delay the submission of the jurisdictional settlement in the Grinnell case long enough to permit us to make a more adequate presentation on this question...

...Brilliant intellectual powers are not essential,” he told a Harvard Law class in 1920...

...Gilpatric sits on the boards of CBS, Corning Glass, Fairchild Camera, and Eastern Airlines (not a Cravath client-yet), as well as the Federal Reserve Bank...

...Walsh says he was as surprised as anyone that Burns was fired...

...In the U. S. Attorney’s office, Burns soon staked out his area of, specialization-water pollution...

...The best clients are apt to be afraid of those qualities...

...An End to Isolationism The current presiding partner is Roswell Gilpatric...

...On April 19, three days after the letter was sent, Kleindienst called this “extraordinary” attorney and told him the extension would be requested...

...We signed the decree with Burns and I had no expectation that he wasn’t going to handle the case from then on...

...If I work 1800 hours, that makes up for it,” he says...

...This is not the place to recapitulate all the threads of the complex plot, only Walsh’s small but significant role in the settlement...

...Seventy years ago, when law firms were casual collections of individual practitioners who combined for their mutual benefit and just as casually fell This article is adapted from Lions in the Street, by Paul Hoffman, to be published thir month by Saturday Review Press...

...Little did Burns know then how prophetic that would be...

...Davis, Polk had been ITT’s outside counsel for more than 50 years, but as ITT started its sweeping conglomeration in the 1960s’ it began using other law firms, especially those that had represented the subsidiaries it absorbed...

...Indeed, the Court has at times adopted a position more extreme than that urged by the Department, We therefore believe that the Department should not take such a step without all of the usual precautions that precede a recommendation for new legislation...

...I guess Judge Walsh cared,” McLaren replied...

...The value of the delay was really inconsequential,” he insists...

...To insure enforcement of this standard, there would be no nepotism, no hiring of partners’ sons, nephews, and inlaws...

...Seymour took it and handed Burns his walking papers...

...In fact, Geneen deemed the matter so important that he wanted Walsh to make a presentation to the President, but Walsh dissuaded him...

...Harold S. Geneen, chairman and president of ITT, asked me to prepare a presentation to you as acting Attorney General and, through you, to the national Administration on the question of whether diversification mergers should be barred and, more specifically, urging that the Department of Justice not advocate any position before the Supreme Court which would be tantamount to barring such mergers without a full study of the economic consequences of such a step...

...After the TFX award, Cravath switched from being a counsel for General Dynamics to being the counsel...

...out again, Cravath deliberately set out to institutionalize itself, to create an entity that would transcend and outlive the influence of any one or two partners...

...Then, in October, 1970, Burns took on General Motors, accusing the auto company of dumping toxic wastes into the Hudson from its Chevrolet plant in Tarrytown...

...That afternoon, Sturve delivered to Kleindienst the memo and a covering letter from Walsh that afternoon: Dear Dick: As I told you over the telephone, our firm has represented ITT, as outside counsel, ever since its incorporation over 50 years ago...

...seriously injured the corporation’s image...

...Looking back at the results of government antitrust cases in the Supreme Court, one must realize that if the government urges an expanded interpretation of the vague language of the Clayton Act, there is a high probability that it will succeed...

...the destructive economic effects of a rigid bar to conglomerate mergers even though they were of large companies...

...The record shows that he participated in the TFX award proceedings and that he advised Secretary McNamara to give the contract to General Dynamics...

...After a few months as an associate at Davis, Polk, Walsh followed Dewey to Albany in 1943, and for the next decade held a variety of state jobsassistant counsel and counsel to Dewey, counsel to the Public Service Commission, and first director of the Waterfront Commission...

...Throughout the evening of Friday, January 8, 1971, he and Walsh negotiated the terms of the agreement...

...Geneen was concerned that the Department’s policy was really ignoring...

...We were confronted with a very serious obstacle by Mr...

...It is significant that-until recent years-no one who remained with the firm distinguished himself outside it...

...In fact, while the case was pending, Ross Malone, GM’s general counsel, was arranging a testimonial dinner for Seymour’s father...

...white-shoe” firms and “law factories”: some trace their antecedents back to the 1790s...

...Gilpatric himself had an office in General Dynamics’ headquarters in Rockefeller Center and had advised the company on one of its acquisitions...

...complied with rules of behavior applicable to all others, and Mr...

...He noted that a last-minute request for an extension of time would be “quite unusual...

...Fourth, members of the firm would be promoted through the ranks...

...it would live by merit, not by political pull...

...rather they are taken into shallow water and taught strokes.’ ’ As other firms grew in size and found themselves-almost without asking for it-becoming institutions, they copied the Cravath system, especially its method of recruitment and promotion, now universal throughout the blue-chip bar...

...Could Roswell Gilpatric return to the Pentagon and speak with no one above the rank of major...

...Walsh’s first priority was to get the Grinnell case delayed, a touchy business since the normal 10-day deadline for requesting extensions of time had already elapsed...

...He has left the firm twice for government service-as Undersecretary of the Air Force in the Truman Administration, where he proved “a wizard at forestalling bottlenecks in aircraft production...

...In 1954, with Dewey leaving office, Walsh was named to the federal bench...

...It’s not the biggest...

...Walsh’s ABA assignment has also brought him into the cockpit of political controversy, for his panel approved Nixon’s nominations of both I Clement Haynswortli and G. Harrold Carswell for the Supreme Court...

...He felt...

...When I was practicing law, I did not make admissions of that character against my clients...

...Attorney General Mitchell had disqualified himself in the ITT cases because his former firm, Mudge Rose, had handled some minor matters for ITT-$1,015 worth in 1969...

...Walsh went to Washington-though he insists that “I never spoke with anyone above the level of the career people...

...It’s not the oldest...

...Lord, Day & Lord was formed in 1845 and has retained the same name since...

...But his office has approved similar prosecutions in the past...

...The origins of the present Cravath, Swaine & Moore can be traced back to 1 8 19, but the processes of institutionalization did not begin until 1906, when Paul D. Cravath took command of what was then Cravath, Henderson & deGersdorff...

...Burns and Mollo seldom saw eye to eye on the action...

...And a few minutes later: “Is this the policy of Dick Kleindienst...

...With GM, he never blocked the grand-jury inquiry...

...He was his own worst enemy...

...To us this is not a question of the conduct of litigation in the narrow sense...

...Burns said it was...

...But seven years later, another Senate committee that looked into the contract concluded: Deputy Secretary Roswell Gilpatric was guilty of a flagrant conflict of interest in the TFX award., . . The record makes clear the fact that he was a top-level policy counselor to General Dynamics for the two and one-half years immediately before his appointment and that he was a de facto member of the company’s board of directors...

...Then Burns wrote a letter to GM Chairman John M. Roche-the man who several years before was obliged to apologize to Nader-complaining about Walsh’s threats to use “political influence to interfere with the pollution investigation...

...He started in the New York state district attorney’s office under Thomas Dewey, and much of his success can be traced to friendships he forged there...

...After a lengthy inquiry, the Senate Permanent Investigations subcommitteeover the protests of its chairman, Arkansas Democrat John McClellan, and Washington’s Henry “Scoop” Jackson, “the Senator from Boeing”gave Gilpatrii3’ a 5-to4 vote of confidence...

...Seymour had disqualified himself from supervision of the GM case because his former firm, Simpson, Thacher & Bartlett, had represented the auto company on occasion...

...Standard Brands was fined $215,000 for polluting the Hudson-and this time the penalty stuck...

...While the Grinnell case remained pending, others representing ITT made contact with the Administration and worked out a satisfactory settlement...

...Geneen’s view of conglomerate mergers...

...A crusty, terrible-tempered tyrant, Cravath, according to the firm history written by his successor, Robert T. Swaine, “had a definite philosophy about the organization of his law firm...

...As Deputy Secretary, Gilpatric played a key role in pushing through the $6.5-billion contract to General Dynamics for construction of the illfated TFX jet fighter...

...the commission eventually recommended adoption of the illfated civilian review board...

...His ascension to power symbolizes the most significant change at Cravath-the end of its policy of isolation...

...Gilpatric insists it wasn’t a change in policy, only “an expansion of exceptions’’ to the old rule...

...He isn’t an ordinary attorney, as far as I am concerned...

...and as Deputy .Defense Secretary under John F. Kennedy...