Starting Over

When the planes slammed into the World Trade Center on Sept. 11, few companies were as hard-hit as a small, close-knit firm called Sandler O'Neill. Of the 83 people in the office that morning, only 17 got out alive. Employees lost mentors, assistants lost bosses, friends lost friends. This is the story of what happened next.

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A Little Help from Ross Perot
The night before Ken McBrayer's funeral, Jimmy Dunne called Jon Doyle and another Sandler partner, C.K. Smith, up to his hotel room in Annapolis. It was Sunday, Oct. 28. The next morning Dunne would be burying his 62nd employee and ninth--and last--partner. He would also be delivering his tenth eulogy in six weeks. For Dunne and for everyone at Sandler, these funerals and memorials had been emotionally and physically exhausting. In one weekend in late September there had been 21 services. Now, with only a few to go, the ritual had become bittersweet: Everyone was ready to stop going to funerals, but no one really wanted to let go of their fallen friends.

McBrayer was a graduate of the Naval Academy, and his widow wanted him to have a 21-gun salute at his funeral. The Academy told her that under the rules that was not possible unless she had his remains--and McBrayer's body had never been recovered. Dunne and his colleagues spent weeks trying to persuade the Naval Academy to make an exception for McBrayer. Finally, after some lobbying from Annapolis grad Ross Perot, the Academy had agreed to accept dirt from ground zero in lieu of a body. Earlier that day, Joel Comer had been dispatched to get the dirt and bring it to Annapolis. But he hadn't yet arrived, and Dunne was getting nervous.

"Okay," he said to Doyle and Smith. "We've got a problem here." He wasn't referring to McBrayer's remains, though. Rather, he was talking about McBrayer's old job. "We don't have anyone in charge of IT," Dunne said. In the frantic weeks after Sept. 11, IT had been a low-priority item. Now it was becoming critical. E-mail wasn't working. The phone system kept breaking down. Some Sandler employees were still without a phone number. Six weeks after the attack, the firm still didn't have the ability to make trades electronically. And nobody was dealing with any of this. For not only had McBrayer died, but so had David Defeo and Chris Newton-Carter, the two people who had done the heavy lifting in the IT department.

On one level, the fact that Dunne was suddenly worried about his e-mail troubles was a sign that things were stabilizing. And it was true: Sandler O'Neill was past its immediate crisis. But a new issue loomed. With its survival no longer at stake, Sandler had to figure out what kind of future it wanted. Here was a small but telling example. In building a new IT system from scratch, Sandler would be facing a series of choices about the firm it hoped to become. How much did it plan to grow, for instance? How fast? Replacing McBrayer meant more than just replacing an old friend and colleague. It was suddenly a decision about the future.

"What we have to resolve here is, Who is going to be in charge of IT?" Dunne said to Doyle and Smith. The three men ran through a list of surviving partners, trying to figure out who could take over. There were no obvious candidates. Everyone was either too busy, too junior, or too inexperienced. After about an hour, they still hadn't come up with a solution. "We have to resolve this--this week," Dunne said, adding the letters "IT" to a lengthy to-do list he'd been writing on hotel stationery.

Just then the phone rang. It was Comer. "You got it?" Dunne asked anxiously. Yes, replied Comer, he had the dirt from ground zero. "That's great," said Dunne. "One less thing for me to worry about."

"That Desk Was My Family"
A new Sandler O'Neill needed new blood, and by mid-November the firm was starting to replace its dead. Dunne had made more than two dozen new hires, including four bond traders, three investment bankers, and two researchers. He'd also brought in someone to run the syndicate desk, which meant that Mark Fitzgibbon could go back to writing research reports. His first one was issued Nov. 16.

But the new hires brought a whole new set of issues. How, for instance, would they fit in at a place where so many people had suffered so much pain? "At first it felt weird," says Alan Roth, a young, newly hired bond trader who had been close to John Wright, the man he's replaced. "Now it feels sort of bittersweet." Adds Adam Mandel, who was hired a few weeks after the attacks: "You are always aware of what they've gone through." Bobby Kleinert, the 45-year-old Wall Street veteran now running the syndicate desk, wanted to go after a deal quickly but needed to bypass some internal red tape. Sandler's lawyer, Patti Murphy, told him he couldn't do it. "That's policy," she said. "Who set the policy?" he asked. "Herman Sandler and Chris Quackenbush," Murphy replied. He dropped the issue. "It's hard for me to argue when she invokes dead people," he said later.

At the equity desk, Suzanne Ircha was now working with three colleagues, all new. Unlike the bond and syndicate desks, the equity operation never made the move to the Banc of America space; it remained behind in the small office on 48th Street. Still, like the people who worked on those other desks, the four equity hands worked in impossibly close quarters--four people, along with three desks, four computers, four telephones, and four chairs, all crammed into a tiny room. But it was strange; despite their physical closeness, they were oddly quiet. There was none of the banter you normally hear on a trading floor. Ircha's new colleagues kept a respectful distance.

"I can't think about what happened," Ircha said one day in mid-November. She'd had a client breakfast on Sept. 11, and it had saved her life; in a taxi on the FDR Drive, she'd seen the buildings on fire. "I have to just think, 'I'm at a new job, and that's why they're not here and these new people are.' " A striking woman in her mid-30s, Ircha fidgeted with a strand of her long blond hair as she spoke. She sounded upbeat, even cheery.

"I'm looking forward to moving into the new office," she offered brightly. This was another sign of the emerging Sandler: A few weeks before, Fred Price had signed the lease for new quarters on Third Avenue. From Sandler's new perspective, it was just what the firm had been looking for: a sixth-floor office facing a brick wall in an anonymous building. Price had passed on another location, in part because it was too close to Grand Central Station, a possible terrorist target. The move was set to take place in January.

I told her I'd seen the new space. "What does it look like?" she asked eagerly. It was pretty basic, I told her: The bond and equity desks were going to be set up in a long open space on one side of the floor; the investment-banking offices would be on the other side. "That'll be great!" she said.

What had the old trading floor been like? I asked. She had been one of the few women on the trading floor, she replied. All the men used to treat her like a little sister. They would mess up her pencils because they knew she liked to have them arranged just so. They would tease her about her boyfriends. They knew everything about her.

"I used to laugh so much at work," she said. "That desk was my family. Tom Crotty will be the hardest for me to get over. He sat next to me." She looked to the empty space next to her. "I miss them," she whispered. Then she covered her face in her hands and quietly began to sob.

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