SQL Server 2012 Random string from a list

You can do this with the following trick:

update c set name=ca.name
from contacts c
outer apply(select top 1 name 
            from (values('bill'),('steve'),('jack')) n(name)
            where c.id = c.id order by newid())ca;

c.id = c.id is just a dummy predicate that forces sql engine to call subquery for each outer row. Here is the fiddle http://sqlfiddle.com/#!6/8ecca/22

Here's some love using choose

with cte as (
   select *, (ABS(CHECKSUM(NewId())) % 3) + 1 as n
   from contacts
   where city = 'NY'
)
update cte
set firstname = choose(n, 'Bill','Steve','Jack')