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Boies Schiller law firm restructures during pandemic

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Via Financial Times

In mid-March, with coronavirus spreading around the world, Natasha Harrison, a London-based corporate lawyer, decided in a matter of hours to uproot her partner and two children to board one of the last flights for Miami. They have been bouncing around hotels in south Florida ever since.

Ms Harrison is not on holiday. Rather, she was selected in December to help lead Boies Schiller Flexner, the powerhouse New York law firm, and wanted to be on the ground to help oversee the temporary closure of its US offices. 

“We thought it best that I be based out here,” Ms Harrison, 46, said matter-of-factly during a telephone interview, as she was stalked on a recent evening by unfamiliar Florida insects and her young son.

Similar, decisive action may be required as she and her new co-managing partner, Nicholas Gravante, try to stabilise a law firm that was listing even before the coronavirus pandemic — thanks, in part, to the recent mis-steps of its prominent founder, David Boies.

The latest sign of turmoil came on Thursday with the news that the 14 partners in the firm’s Los Angeles office are defecting to rival King & Spalding, three years after joining Boies Schiller through a merger. A San Francisco partner also left. They join a trail of lawyers — about 70 in all — who have departed in recent months. Rivals who once cowered are now circling.

Rather than slowing down to see how the post-pandemic world shakes out, the new leaders of the firm have decided the crisis is the time to accelerate restructuring plans that were already under way. “What the pandemic has done is caused the restructuring to come into much sharper focus,” Ms Harrison said.

Mr Gravante, 59, a veteran litigator, acknowledged the firm had drifted in recent years as it grew to a peak of 350 lawyers. Now, it is cutting back to focus on the most complex and substantial assignments — what he calls “bet-the-company” cases. 

“With 350 litigators it was difficult to be a firm that limited itself to only the best and most important matters,” he said, adding: “We were going to be smaller long before the pandemic.”

Among other moves, they are planning to prune more staff, consolidate 13 locations to six or seven, and promote a new generation of talent. They will add resources in areas like bankruptcy and restructuring that are sure to be busy in the months ahead.

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The larger goal, both explained in recent interviews, was to take a firm built around the star power and eccentricities of a singular lawyer — Mr Boies — and transform it into an institution capable of thriving on its own terms. 

“The firm doesn’t just rotate around David now,” Ms Harrison announced. “It’s moving on.” 

Mr Boies, 79, founded the firm in 1997 with Jonathan Schiller, and is widely regarded as one of the most talented litigators of his generation. Among other seismic cases, he represented the Justice Department in its antitrust victory over Bill Gates and Microsoft. He also represented vice-president Al Gore in the legal case that grew out of the 2000 Florida recount, and helped strike down the legal prohibition on gay marriage in California.

“He’s a god,” one rival said. “The firm was built on his reputation — the fear he instilled in his adversaries, the machine he created.” 

But in recent years, succession talk has grown louder — as has negative publicity from some of Mr Boies’ engagements. He was a board member of Theranos, a Silicon Valley start-up whose blood-testing technology turned out to be a fraud. He was also the longtime lawyer for Harvey Weinstein, the Hollywood producer recently convicted of rape. The New York Times Company, another longtime client, fired Boies Schiller after it emerged that the firm had hired private detectives to intimidate journalists and whistleblowers in the Weinstein case.

While Theranos and Weinstein made for bold headlines, the rival observed, Boies Schiller also faced a more prosaic challenge: “The law firm is going through what every law firm goes through when there is a generational shift, and especially when you’re talking about huge personalities.”

Nicholas Gravante apprenticed with trial lawyer Gerald Shargel, whose clients included mobsters like John Gotti

Mr Gravante still recalls when he was a law student, watching television coverage of Mr Boies’ exploits in the first amendment trial defending the CBS network against General William Westmoreland, the former chief of the US army who brought a libel case against it over a Vietnam documentary.

Mr Gravante is unapologetic about the firm’s aggressive defence of its clients. “We have always been a firm that’s gotten involved in high-profile, controversial cases. We’ve never shied away. Any time you do high-profile work, you’ve got to roll with the punches,” he said.

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The son of a Brooklyn lawyer with a neighbourhood practice, Mr Gravante worked as a young lawyer at Mr Boies’ old firm, Cravath Swain & Moore, in the 1980s, but became disillusioned by the lack of courtroom work. He left to apprentice with Gerald Shargel, a famed New York trial lawyer whose clients included mobsters like Sammy “the Bull” Gravano and John Gotti.

“I went from the whitest of white-shoe law firms to a criminal lawyer involved in every conceivable case,” he said, calling his two years with Mr Shargel transformative. The law firm Mr Gravante went on to found in New York was acquired by Boies Schiller 20 years ago.

His generation was bonded by personal loyalty to Mr Boies, he explained, and would never have considered leaving for a mere pay raise. “Ten years ago, 15 years ago, David Boies didn’t sit around worrying about losing partners,” Mr Gravante said. 

The firm has tried to evolve. Mr Boies led its move last year to swanky new offices at the Hudson Yards development on the far west side of Manhattan. The new premises are modern and airy, with a café that seems fit for a space station. But the open-plan layout has irked some lawyers, who would prefer old-fashioned privacy. 

The new leaders are trying to make deeper changes. They have overhauled the compensation system for younger lawyers to make the firm more competitive and stave off rivals. They are establishing practice groups to bring more order to what has been a more freewheeling enterprise.

Mr Gravante, whose clients include the Kushner Companies and former AIG chief Hank Greenberg, also talks a lot about training younger lawyers in the art of bringing in business and promoting a deeper bench of stars. To that end, Boies Schiller is hiring in-house publicists and marketers — roles that have become commonplace at other big firms but which Mr Boies could ignore.

“There are things we have done that I’m sure they don’t agree with,” Mr Gravante said of the founders, who still remain managing partners. “I don’t think David or Jonathan would be able to talk us out of something if we were dead-set on doing it.” 

Natasha Harrison made her name representing investors in the legal circus that followed Iceland’s banking collapse

Ms Harrison’s career path is also less orthodox than it might, at first, seem. The daughter of Cypriot and Irish immigrants who met in 1960s London, she was raised in outer-ring Croydon — “hideous”, she calls it — before spending a year at the posh Seven Oaks preparatory school and then Durham university.

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“I wasn’t somebody who came out of the womb wanting to be a lawyer, and I’m deeply suspicious of people who are,” she said, noting that she worked a succession of odd jobs — including as an estate agent — while at university.

As a lawyer, she made her name representing investors in the high-level legal circus that followed Iceland’s banking collapse in the last financial crisis. Dozens of the litigants were hedge funds, who traded the bonds as the legal case twisted and turned. Much of the country’s legal code was based on fisheries law. Huge profits were made. Mr Boies came calling in 2013, and Ms Harrison decided to take a chance on an American firm looking to move into London.

“It’s not a stuffy law firm. I’m not good in stuffy, hierarchical places because that’s not what I grew up with,” she explained. “I could never really thrive in that environment, but in this one I can.”

Coronavirus is thrusting Boies Schiller into a new environment with few certainties. Having shut down their physical offices, there will eventually be the challenge of bringing people back to work, and adapting to a new reality of working from home. (One New York lawyer marvelled this week at his first ever court appearance by video link, calling it “liberating”.)

By being smaller and better organised, Mr Gravante and Ms Harrison are hoping Boies Schiller will be better poised to react — particularly in restructurings, which Mr Gravante predicted may be the most active area of litigation for the next five years. Eventually, they hope to make new hires and acquisitions.

Whatever the case, they will be moving forward with Mr Boies, the firm’s founder, relegated to the background. 

“Everybody’s here because of David. At the end of the day, that’s why people came here. There’s a huge amount of loyalty to David, and rightly so,” Ms Harrison said. “And I think Nick would say — and I agree — our next step is to further create institutional loyalty beyond David.” 

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