Legal Technology
Excel Error by a Cleary Gottlieb Associate Alters Lehman Asset Deal
Posted Oct 16, 2008 5:31 AM CST
By Debra Cassens Weiss
A first-year associate at Cleary Gottlieb Steen & Hamilton made an Excel reformatting error that mistakenly added 179 contracts to an agreement to buy Lehman Brothers assets, according to a motion filed with a New York bankruptcy court on Friday.
Cleary Gottlieb Steen & Hamilton represents Barclays Capital Inc. in its agreement to buy the assets. Its motion (PDF posted by Above the Law) says the law firm was working under a tight deadline when the mistake was made, Computerworld reports.
The motion seeks to exclude the 179 contracts from the purchase agreement.
Above the Law was the first to report the error. Its story said the mistake happened at around 11:30 p.m. on Sept. 18 when a second-year associate asked a first-year associate to reformat an Excel document of critical Lehman contracts to be assumed by Barclays.
The associate resized the rows when converting the spreadsheet into a PDF document, causing “hidden” contracts in the spreadsheet to be exposed. The spreadsheet, which had been e-mailed to the law firm by a Lehman representative, contained nearly 1,000 rows and more than 24,000 individual cells.
The problem was discovered by lawyers on Oct. 1.
Hat tip to Legal Blog Watch.
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Comments
Al Tidom
Oct 16, 2008 3:00 PM CST
Oy! This poor putz’s career is now shot, and all because he uses a spreadsheet. This should have been left to the Lehman guy. Lawyers don’t know bupkes about spreadsheets. Oy!
Ellen Barshevsky
Oct 16, 2008 6:00 PM CST
I AGREE COMPLETELY. This is what I am talking about. They work us associates SO hard that of course someone is going to hit the wrong key or even WORSE.
This involves a spreadesheet program, which my Boyfriend, but NOT I know how to use. I can barly turn on my computer and word process. He can do spreadsheets..
WHERE DO WE EVER LEARN THIS? IT wasn’t taught in my law school. We learned law, not SPREADSHEET managment.
Other then my Boyfriend, who went to B school to learn this,, who else knows what 1000 rows and 24,000 individual cells means? Are WE as lawyers, to be spreadsheet MASTERS? I don’t think so.
stanza28
Oct 16, 2008 11:23 PM CST
No, we aren’t obligated to master Excel, or Photoshop, but it has certainly helped my career to have these skills. It might be part of why I had the opportunity to work there for a little while.
We weren’t required to achieve perfection in law school to pass, but some people attempted it anyway.
Expectations are high at Cleary. They should be.
However, I feel compassion for this individual as well.
zerah
Oct 17, 2008 3:43 AM CST
Comment removed by moderator.
Smithtown31
Oct 17, 2008 4:24 AM CST
DON’T mess with EXCEL unless you know what the hell you’re doing! I feel bad for the associate- but come on guy- you need to “man up” in that situation and let the 2nd year know that this is beyond your capability.
Although it is true that we’re not taught this stuff in law school… but it wouldn’t hurt to learn it (at least the fundamentals)... it’s only what your clients spend 97% of their time doing…
In-House
Oct 17, 2008 5:00 AM CST
What a weak excuse by Cleary. Where was the partner/senior associate oversight? They are also culpable in this, yet they threw this 1st year under the bus. Just pathetic…
Also, shouldn’t Lehman’s counsel have caught this?
Jeffrey Ritter
Oct 17, 2008 5:08 AM CST
Some of these comments are quite troubling—lawyers have the professional responsibility to be accountable for their work and, in the 21st century, a responsibiilty to work competently with the tools of communication that are inherent to the conduct of business. Yes, it was an error, and yes it is something for which we should be compassionate for the associate, but it is not acceptable that lawyers believe they can disclaim either their responsibility for using their best skill to verify the accuracy of documents they control or their illiteracy with technology. In the e-discovery courts, the judges have made clear that the protests of lawyers they don’t understand “this computer stuff” must be evaluated under the ethical rules of competency; should we not ask the same of lawyers handling business deals in the 21st century?
i live to read ellen b's comments
Oct 17, 2008 5:31 AM CST
Comment removed by moderator.
Annoyed Assistant
Oct 17, 2008 5:42 AM CST
So let me get this straight. You spend three extra years of your life in school, study and pass the bar and you think because you’ve done all this, you are qualified to “reformat” an Excel spreadsheet? This is what assistants are for. Where was the night staff - document production - the secretary to wanted overtime? Any or all of those would have been a better choice. I do, however, agree on the senior attorney oversight comment.
Fuzail Ahmad Ayyubi
Oct 17, 2008 5:43 AM CST
Its not about mastering the technical tools of work, its just about doing our job with attention. Working on excel is no rocket science for anyone leave alone lawyers. I think one important thing to learn from this unfortunate event is to realize the enormous responsibility involved in our work. We are paid highly so we are suppose to work with diligence & presence of mind. Its like flying a jet, you cannot sleep in the cockpit of the jet you flying.
Tim Hughes
Oct 17, 2008 6:08 AM CST
This would seem to be a classic case of mutual mistake. The team of lawyers probably should have caught it, but I can see how you would not review portions of the documents that were not intended to change ... this associate should not be getting thrown under the bus.
Annoyed Prof
Oct 17, 2008 6:18 AM CST
I’m not shocked. Stuff happens. But blaming it on a first year? Does the firm think that relieves them of responsibility? Clients are never impressed by that sort of thing.
Back when I was in practice (longer than most profs), if one of my associates screwed up in a way that required an apology to the client, I made sure that I told the client that *I* or *we* screwed up. Minimal excuses, sincere apology, and move quickly to how we are going to fix (cut hours, etc). I never placed the blame on associates or staff, but I made sure the associate was there to watch me eat crow on his/her behalf.
Not only was this the right way to deal with things, but it sent the right messages all around: To the client, you show integrity and a focus on fixing problems rather than shifting blame. To the associate, you teach lessons about owning up to mistakes, duty to clients, that loyalty runs both ways, and that the buck stops somewhere.
Partner
Oct 17, 2008 6:25 AM CST
The critical fact is the hour at which the mistake was made—11:30 pm. Why were they working at this hour? Because the clients set ridiculous expectations about turning docs and closing. The real answer here is that someone should have told the client “we need adequate time to do the job right”.
The core problem is the billable hour. Clients think that we want to take as long as we can to run-up fees. While that may happen, most lawyers I know are so busy, they just try to get it done and move to the next item.
I understand completely
Oct 17, 2008 6:51 AM CST
The only way you can make it to senior managing executive partner, like myself, is to throw first year associates under the bus. Alas, it even happened to me! We were once preparing a public notice of arrest for the Essex County sheriff’s office, when I mistakenly used the letter “f” instead of the letter “S” in our Gutenberg printing press… and hilarity ensued! 39 people were innocently boiled to death in hot oil, but luckily the senior partner that I was working for merely enslaved my sister for a few years and we all had a good laugh over it at the turn of the century party.
What is this Excel of which you speak and what is a computer?
Associate
Oct 17, 2008 6:55 AM CST
Why does everyone assume the associate was a “he?”
kwg
Oct 17, 2008 6:56 AM CST
I’m with Annoyed Prof. It’s amazing how quickly this was pinned on a first-year associate, who (just to give the partners more insulation from actual blame) was asked by a second-year associate to print out a document.
J.G.
Oct 17, 2008 6:56 AM CST
The problem here, it seem, started with Lehman sending a spreadsheet with hidden rows and not alerting the Cleary lawyers to that fact. It’s true that if Cleary had carefully reviewed the revised spreadsheet once converted, they may have caught this, but I don’t think this has anything to do with the associate’s competence in Excel. No one at Cleary appears to have been aware that there was hidden data in the spreadsheet that might be revealed.
And to all of those who are angrily disclaiming any responsibility to know anything about tools like Excel, I can only say that if your clients hear you say that, they are likely to become your ex-clients. Get with the program and learn the tools that your clients expect you to use.
Sceptic
Oct 17, 2008 6:57 AM CST
The real error was “hiding” the 179 excluded contracts, instead of deleting them (or at least creating a new copy of the spreadsheed in which they do not exist). Is the person responsible for that error being held to account?
Dick Billings
Oct 17, 2008 7:03 AM CST
#15, It is a “he” because women don’t generally know how to manipulate spreadsheets. More importantly, if you looked, you will see that the associate’s name is in the pleadings. I won’t mention his name here, but you can see, if youre internet saavy that they forced this poor guy to write up an affidavit before they threw him under the bus.
Big law firms don’t take no prisoners, and there’s no way a lawyer would know which contracts are good to be included in a list and which ones are not good to be included.
HER
Oct 17, 2008 7:06 AM CST
Why blame anyone? It was a mistake. We’ve all made them and will make many more. The key is to—as one commenter noted—own up to it and fix it. If we were infallible, we wouldn’t need insurance.
Also, point of grammar, it is still standard to use male pronouns if the gender of the person is not known. It is not correct to use “they” or “their” when talking about a single person. (I am a female attorney, and it doesn’t bother me.)
Give me a Break
Oct 17, 2008 7:06 AM CST
Give me a break. These are my comments - (1) attention to detail, (2) the buck stops with the attorney in charge, (3) whether you are the partner or the associate you are getting paid the big bucks… therefore, you work until the filing deadline, and (4) if you cannot handle the heat get out of the kitchen.
Chet Lustgarten
Oct 17, 2008 7:18 AM CST
The problem is a combination of long hours and time pressure, which makes it inevitable that mistakes will be made. Firms and lawyers must have fail safe procedures so that mistakes with potentially disastrous consequences can be identified quickly. Such procedures include using document comparison software and preserving hard copy originals as a base line to make sure that a computer generated document is what it is supposed to be. The other problem is that clients expect lawyers to act quickly, sometimes without adequate support or cooperation from the client. Witness the recent brouhaha when a certain bank chief executive went bonkers when he found out that he was liable for certain obligations whether or not the deal closed. It was obvious that the mistake was the result of last minute verbal discussions that did not get properly communicated but the lawyers were blamed in any event.
MEV
Oct 17, 2008 7:31 AM CST
Shame on you, ABA Journal, for this attention-grabber headline. We all know that properly placed blame, if there is to be any in this case, lays at the feet of the supervising attorney. THAT is the real “error” here, symptomatic of the increasingly dysfunctional big firm environment. And shame on Cleary G’s partners for using young associates as human shields in this manner. That, my friends, is unprofessional.
IanB
Oct 17, 2008 8:00 AM CST
Having worked as both a lawyer and investment banker, I blame the client. No banker should ever send a spreadsheet to a lawyer expecting it to be manipulated in any way, shape or form. That’s what analysts are for. Plus the analyst and the VP should have been reviewing the schedules, at the very least. So a rookie made a rookie mistake. He or she shouldn’t have been given the opportunity to make it, and it should have been caught four or five times over.
Atty
Oct 17, 2008 8:14 AM CST
FYI. Some of the “metadata” scrubbing software will automatically reveal hidden cells/rows/columns. Most law firms implement some sort of mandatory metadata scrubbing software that is difficult to bypass. You can have everything perfect on your computer, but the email scrubbing program will reveal all of the hidden cells after your hard word. Partners should not use young associates as human shields. In this job market, firms are like the game show Survivor.
LM
Oct 17, 2008 8:15 AM CST
That’s why I always print the document first, make sure it’s alright, scan it in pdf and attach it, make sure the pdf came out alright, then hit send. Eleventh hour or not, it is the both the supervising and the associate’s responsibility.
Paul V
Oct 17, 2008 8:26 AM CST
The first year probably didn’t even know what contracts were to be in and what contracts to be out to do a review. The headline is reprehensible. This isn’t a first year’s mistake, it’s a Cleary mistake or a Lehman mistake. Telling the judge that a first year made a formatting error in a motion as an excuse would be all I need to never hire that firm again.
Maureen Brennan
Oct 17, 2008 8:41 AM CST
Do you learn the information or master the sills to solve the client’s problem or complaint that the client’s problem doesn’t fit within the skills you have?
SDM
Oct 17, 2008 8:42 AM CST
That problem is a serious design flaw in EXCEL. I have had lawyers and others send me all kinds of proprietary information in their EXCEL spreadsheets. I won’t let anyone in my company send any EXCEL spreadsheets no matter how much metadata they think they have eliminated.
IanB
Oct 17, 2008 8:45 AM CST
Should corporate attorneys have basic Excel skills? Absolutely. Should the bankers ever rely upon those skills? Absolutely not.
bob
Oct 17, 2008 8:46 AM CST
lol - u go to harvard - then make 160,000 a year - and all you do is format excel documents at 11:30 at night. sucks to be you all
Raleigh
Oct 17, 2008 8:58 AM CST
Wow, what a culture of culpability y’all work in from the comments! I always tell our associates that the purpose in identifying mistakes is not to assign culpability (I’ve worked for that firm before and the blame never goes where deserved), but to identify a procedural or protocol flaw and fix it so it doesn’t happen again, or else to show the person making the mistake (and everyone else) that it happened and how it happened, so they won’t do it again or at all; law offices will always make the same mistakes over and over until they are identified, and discussed without the need for assigning culpability.
GJD
Oct 17, 2008 9:08 AM CST
I’m vindicated. I spent a few years doing finance work involving spreadsheets for companies before going to law school. After law school, no firm would hire me because my “industry” or “practical” experience was not valued; firms wanted law firm experience or inexperienced first year associates. I was able to go in-house for a major corporation and since then been offered other in-house jobs based on my business and legal experience even though I have never worked for a law firm.
Chris
Oct 17, 2008 9:17 AM CST
With regard to partners throwing associates under the bus, it is one thing for a partner to take responsibility, but that does not alter the requirement to report the facts accurately to the court. So, if the second year asked the first year to take care of it, and the first year messed up, that’s what needs to be in the court filing. Of course, a mea culpa from the partner in charge might be helpful.
LitSuppSpec
Oct 17, 2008 9:17 AM CST
IanB is right on the money. If the spreadsheet is coming from a source as tech savvy as an investment firm, anyone would expect the spreadsheet to be in working order already. I work in Lit Support and we get blamed for this kind of thing all the time. It’s not our fault that management dictates that we use software to open up hidden rows/columns; if it’s getting reviewed, it all needs to be reviewed. We’re all human, let’s not forget that.
Toni Marsh
Oct 17, 2008 9:30 AM CST
Sounds like a Bitter Lawyer webisode.
Bob Guei
Oct 17, 2008 9:32 AM CST
Is the moderator Ellen’s boyfriend?
Political Correctness is Out of Control
Oct 17, 2008 9:40 AM CST
It is “he” because that is the genderless third person pronoun in the English language.
Andy the Lawyer
Oct 17, 2008 9:40 AM CST
I thank Ellen for her weekly disclosures about what she does not know. I wonder what she does know.
As for her boyfriend—I’m beginning to believe his secret identity is Joe the Plumber.
IanB
Oct 17, 2008 9:50 AM CST
Raleigh is quite right - what should be learned from this is how to adjust the system so that the mistake is not repeated. In this case, two systems broke down - both at the firm and at the bank - for the mistake to happen. The solution may lie in clearer communication of responsibilities between firm and client, always a difficult subject. In the instant case, however, it’s hard not to conclude that Cleary is not doing that sort of systematic analysis, but is instead offering up the first year for sacrifice.
Fierce
Oct 17, 2008 9:50 AM CST
I don’t even read these articles, I just scroll down to read Ellen’s insightful comments. I wish her BOYFRIEND would also post here, as I bet he would also have an interesting perspective
Jimbo!
Oct 17, 2008 10:07 AM CST
Ellen you are the BEST. And to Andy the Lawyer, Ellen wrote that her man went to B school, not P school dude!
Darmok & Jilad LLP
Oct 17, 2008 10:21 AM CST
The rows containing the contracts should never have been hidden. They should have been deleted.
I blame Lehman.
bignurse
Oct 17, 2008 10:49 AM CST
Excel is supposed to be used for adding and subtracting numbers, not for general data organization or presentation. This is what happens when you try to fit a square peg in a round hole.
Gazinnia
Oct 17, 2008 10:54 AM CST
Is it too much to ask for basic competency in the tools with which business lawyers ply their trade?
Word, Excel, Powerpoint, Acrobat. Call up your client and tell them that $300+ per hour doesn’t cover basic business skills like using a computer and then call you malpractice carrier and increase your coverage.
Would this discussion be different if it were about Keyciting or Shepardizing a case in litigation?
Leave the poor kid alone
Oct 17, 2008 11:31 AM CST
Don’t you all think it’s a bit too much to expect that anyone other than the document author itself (i.e., Lehman) would know of the existence of hidden data? It’s ridiculous to expect that the associate would be looking for data he didn’t even suspect existed.
Even if a person is well-skilled in Excel, this kind of hidden data mishap is still feasible.
I don’t blame the associate or the law firm. S**t happens.
#14 - funniest comment ever!
jboinlaw
Oct 17, 2008 12:07 PM CST
When I graduated law school Excel wasn’t even a part of any lawyer’s vocabulary. I’ve learned about it and about many other new technologies, and lawyers have a responsibility to know what these are and get help for some of the technical details, e.g., formatting,
Excel was originally formatted by an underling working for God who was high on speed at the time. You hit the wrong formatting keystroke in Excel and you just sold China the moon, which you don’t own.
This is not about lawyer incompetence failure of oversight, inappropriate delegation of authority; it’s about accidentally making a wrong keystroke, which can be corrected by hitting the undo key.
When a checkout clerk hits the wrong cash register key and overcharges you for lettuce, you tell her, she calls over her manager who makes the adjustment. End of story.
Why do lawyers, and judges, and accountants, and arbitrators, and court clerks have to make everything so frickin’ complicated? Why can’t they recognize that it was a simple mistake, none of the parties intended for those contracts to be included, and make the change?
Oh wait, I just remembered; it’s about the attorney’s and accountant’s fees.
Victim of Law Firm Layoff
Oct 17, 2008 12:17 PM CST
To “Annoyed Assistant”: The secretary, assistant or night word processor was probably laid off because big law considers them redundant and unnecessary. After all, associates are all supposedly computer literate.
Marsha D.
Oct 17, 2008 12:18 PM CST
Amazingly, I DID learn how to use a SPREADSHEET while a tax associate at a national law firm in San Francisco. Ironically,they thought I knew HOW to do one since I had a brief jig at a national accounting firm in DC!!!!
Spreadsheets are very tricky. My sympathies to the poor associate!
HB
Oct 17, 2008 12:24 PM CST
This isn’t about competence with a spreadsheet, its about presenting a project to a junior associate in such a way that a usually harmless action has huge consequences. So you can all stop congratulating yourselves on your proficienty with MS Office.
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