What's Going On At Boies Schiller Flexner? (Redux)
The firm celebrates its 25th anniversary next year—and with no heir apparent, David Boies remains at the wheel.
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Yes, Boies Schiller Flexner (“BSF”), the top-flight litigation firm founded by legendary trial lawyer David Boies in 1997, is still with us. But what does the firm’s future look like right now?
Almost exactly a year ago, I wrote my first post here at Original Jurisdiction, What’s Going On At Boies Schiller Flexner? As Original Jurisdiction celebrates its first anniversary next month and Boies Schiller celebrates its 25th anniversary next year, I thought I’d check in with David Boies and see how 2021 has treated him and his firm. It has definitely been another eventful year for both.
When he and I spoke last year, Boies Schiller was reeling from partner defections. The firm’s headcount was just over 200 lawyers, down about 40 percent from the prior year, and Boies told me that he expected additional departures.
His prediction has come to pass: the firm is now down to 150 lawyers. But on the bright side, the pace of defections has slowed, so things have stabilized somewhat. And, of course, the firm is still around—which shouldn’t be taken for granted, since some industry wags predicted a year ago that BSF was not long for this world. Recall the opening line of my story from last December: “Will Boies Schiller still be around, 24 or even 12 months from now?” (I predicted last year that the firm would endure, and I just won a gentlemen’s bet with a reader who predicted otherwise.)
But make no mistake: Boies Schiller still faces significant challenges. For starters, there’s the matter of succession planning—or lack thereof. More specifically, the question that has dogged the firm for years remains unanswered: who will take the wheel at BSF after David Boies and his co-founder, Jonathan Schiller, are no longer around?
When Boies and I spoke last year over Zoom, we were joined by Natasha Harrison, who was about to be elected deputy chair of Boies Schiller—i.e., heir apparent to Boies, the firm’s longtime chair and managing partner. Now Harrison is no longer deputy chair, having stepped down in September—and she’s actually in the process of leaving the firm to launch her own London litigation boutique. In doing so, she joins several lawyers who took leadership roles at Boies Schiller only to depart later, including Nick Gravante, former co-managing partner with Harrison; Karen Dunn, a former member of a (now dissolved) four-person management committee; and Bill Isaacson, a former vice chair of the firm. Some BSF partners have expressed frustration with David Boies’s apparent difficulty with letting the next generation of firm leaders take the driver’s seat, and the departures of these ex-leaders might reflect this.
In a phone interview last week, I asked Boies about the future of the firm, including succession. We also discussed other matters in the news, including the high-profile criminal trials of disgraced Theranos CEO Elizabeth Holmes and alleged sex trafficker Ghislaine Maxwell—two cases with Boies connections.1
Here’s a (lightly edited and condensed) write-up of our conversation.
DL: When we spoke one year ago, you were optimistic about the future of Boies Schiller, having recently named an heir apparent, Natasha Harrison. Now she’s heading for the exit, there’s no heir apparent, and the firm is down to 150 lawyers from last year’s 200. Where do you go from here?
DB: There will be more departures, but the firm is probably now in a stage where at least as many lawyers are coming in as going out. As I’ve said before, I think that the critical mass for a firm that does what we do is around 150 lawyers. So I’d be surprised if we dropped much below 150. And then we will start to grow the way we did before, around 3 to 5 percent a year in organic growth—not counting things like office launches, like the Milan office we just opened.
DL: Let’s talk about the Milan opening, in which you’re hiring up to 15 new lawyers. The move surprised me. As part of your restructuring, you’ve been closing rather than opening offices. Is now really the time to be launching a new outpost—in a foreign country, no less?
DB: The offices we were closing in the restructuring were in places like New Hampshire and Orlando, places that were really more like outposts than real offices. They were offices we opened because there was a lawyer we wanted who wanted to live in that place. Over time, we tried to consolidate, and as some of those lawyers retired or left the firm, it did not make sense to have those outposts.
That wasn’t the situation in Milan. We have been looking to open in Europe ever since we opened in London, but until Brexit, there wasn’t any real sense of urgency. Having just a London office worked pretty well when the U.K. was part of the E.U. Once we had Brexit, it became clear that we needed to have an office in Europe itself. We have a lot of work before the European Commission for our U.S. clients, we represent U.S. clients with interests in Europe, and we represent European clients with interests in the United States. We spent the last few years looking at different options, and for a variety of reasons, we decided that Italy and Milan were the right places to start.
DL: Why not Brussels? Or Paris? Or one of Germany’s major cities?
DB: Brussels does have the advantage of being where the E.U. institutions are. But increasingly they’re being spread throughout Europe.
One important aspect of opening a European office was strengthening and expanding our international arbitration practice, which has always been a key part of the firm. Milan is an important center for international arbitration. Jonathan Schiller has been a member of the Milan Chamber of Commerce International Arbitration Club, a prestigious organization in the arbitration world, for more than 20 years.
Of course, a lot of arbitration is done in Geneva, Paris, and some cities in Germany. But one of the things we found is that everybody likes to go to Italy, including people in France, Germany, and Eastern Europe. We also had the advantage of having some lawyers in Milan whom we know well, have worked with in the past, and hold in high regard. And Italy itself is a growing legal market. Over time, we will probably have other European offices, but Milan is a good starting place.
DL: And what about London? I understand that Natasha Harrison is taking a significant number of your London lawyers to her new boutique—which isn’t surprising, since she hired many of them while building out London for BSF. Will the firm still have a London office after her departure?
DB: We will continue to have a London presence. But you’re 100 percent right that Natasha built that office, alongside two other senior lawyers who are no longer at the firm, Dominic Roughton and Wendy Miles. Many of the people in London are people Natasha had recruited, and we expect that some of them will leave when she leaves. But we will certainly maintain an office in London, and we anticipate growing that office.
DL: With Natasha having stepped down as deputy chair, do you expect to name a new deputy chair?
DB: People at the firm will have to figure out if that’s something they want to do at this point. Right now we have three managing partners—Alan Vickery, Matt Schwartz, and Sigrid McCawley—who are working very well together, and they have been working well together for the past year. At some point there will be a new chair, but whether it’s necessary or desirable to name a deputy chair—and if so, when—is something the firm will have to think about.2
DL: In happier news, I recently read that BSF could soon be receiving a hefty fee for its work representing the plaintiffs in the Blue Cross Blue Shield antitrust case, which resulted in a $2.7 billion proposed settlement. Are you optimistic about the settlement getting approved, and do you have any sense on timing?
DB: We had our final approval hearing last month, and after post-trial briefing is completed around December 17, it will be sub judice with the trial court. My guess is that we’ll get a decision sometime in January.
If the court approves the settlement, then I think it will probably address fees at the same time. If it’s not approved, then we’ll have to go back to the drawing board, and how extensive the changes will be will depend on how extensive the court’s issues are.
The settlement is a very good settlement. It’s one of the largest antitrust class-action settlements in history that did not have a related government investigation. It’s a case where we challenged practices that had been in place for 40 years, well-known practices that had never been challenged by enforcement agencies. And we got very significant injunctive relief that the trial court has already described as “historic” in terms of increasing competition.
The case took us nine years to litigate. It involved hundreds of depositions, millions of documents produced, and more than 100 hearings. It was a very big undertaking with an excellent result, and I hope the court sees it the same way.
DL: So it sounds like the firm will have a significant amount of money coming its way next year.3
DB: If the settlement is approved, there will be a substantial recovery. And we have a few cases that will probably result in recoveries next year. Blue Cross Blue Shield will probably be the largest, but we have another settlement, in the Takata airbags case, that’s up for approval in January. We have a partial settlement in our opioids case, where we represent the Cherokee Nation. We have a settlement in the epipen litigation. We have a number of settlements that we expect to come in the next year.
And that’s just the contingency side of things, which represents only about 25 percent of the firm. About 25 percent of our work is on contingency, 65 percent is on monthly billing, and 10 percent is pro bono. And we’ve had some great results this year in those areas as well.
DL: I’m guessing your associates will make out well this year in terms of bonuses?
DB: For associates on our formula compensation system [in which they receive a portion of the revenue they generate for the firm], we don’t have the bonus numbers yet since bills are still out to clients. But for associates who opted into the market bonus system, we’ve announced our bonus scale—which matches the Cravath scale, but then layers on top of that “extraordinary” and “extra-extraordinary” bonuses for high billers.
DL: Shifting gears a bit, your former client, ex-Theranos CEO Elizabeth Holmes, is now on trial for fraud. And she’s now on the stand, testifying in her own defense. Were you surprised by her decision to testify?
DB: Testifying can be a risky business for a defendant, but I think this is a case where the only person who can really tell her story is herself. And I think her lawyers probably felt that somebody needed to tell her side of story.
DL: Do you think that the conventional wisdom on this—that most defendants don’t testify, and that they shouldn’t testify—is eroding? I can think of several defendants in high-profile cases who took the stand, like Kyle Rittenhouse, Travis McMichael in the Ahmaud Arbery case, and Katherine Magbanua in the Dan Markel case.
DB: I think more defendants are testifying these days, but they’re still a minority. I’m not a criminal defense lawyer, so I’m not an expert, but I can identify some factors that go into the calculus.
First, how good a witness do you think your client will be? When you put the defendant on the stand, you risk making the case a one-witness case, where regardless of what else is presented at trial, it comes down to whether the jury likes and believes the defendant. So you need to ask yourself if this is someone you believe will come across well.
Second, are there things that have not come out in the trial and won’t come out, unless your client testifies? There are a variety of things like prior convictions that are not relevant and can’t be introduced at trial unless the defendant testifies, and then they can be used for impeachment purposes.
Third, how strong has the prosecution’s case been? Is this a situation where without your client’s testimony, you’re in real trouble? If you think you’re in a strong position after the close of the prosecution case, you might not want to risk that position by putting the defendant on the stand. But if you figure you’re way behind and will lose anyway, then you’ll be much more inclined to do it.
Fourth—and this is related to the third factor—do you have another way of telling your story to the jury? Or is your client’s testimony really the only way you can get out the evidence and narrative that you want to present?
DL: Speaking of high-profile criminal trials, the trial of Ghislaine Maxwell is about to get underway. Do you think that she will testify on her own behalf?
DB: I don’t know. It will come down to the general points I just mentioned. It’s hard to know how things will play out until you see the trial developed a bit more. On the first point—could she present well—my guess is that, properly prepared, she probably could. She’s sophisticated, she’s articulate, and she has been in many different social situations before. The other factors are more uncertain.
DL: You and your partner Sigrid McCawley have been representing Virginia Giuffre and other victims of Jeffrey Epstein for years. What’s going through your head right now as this case goes to trial?
DB: It’s now up to the judge and jury to consider the evidence and decide Maxwell's guilt or innocence. It has taken a long time—too long—for the allegations against her to be heard and decided in court. But our clients are grateful that they will be heard and decided now.
DL: Having spent so many years trying to get justice for Epstein victims, how do you feel as the trial gets underway? Vindicated? Nervous?
DB: I do think we feel vindicated. When Sigrid and I started this case more than seven years ago, I don’t think anybody gave us much of a chance of reaching this result. As for nervous, I’m always nervous when someone else is handling a matter in court that I care about, whether it’s a lawyer outside my firm or even a lawyer inside my firm.
When I talk to prospective clients, I explain to them why, if I’m going to be in a case, I need to be in control. I tell them: If I’m at the scene of a bad accident, I want to have the steering wheel in my hands.
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Here’s a quick refresher on Boies’s ties to both Elizabeth Holmes and Ghislaine Maxwell.
Boies and BSF previously represented Holmes’s blood-testing company, Theranos, and Boies even sat on its board, before the company was exposed as a fraud and collapsed. Wall Street Journal reporter John Carreyrou, author of the Theranos exposé Bad Blood: Secrets and Lies in a Silicon Valley Startup, accused Boies of trying to intimidate whistleblowers at Theranos and squelch negative publicity. Boies’s aggressive lawyering on behalf of Theranos and another reviled client—movie producer Harvey Weinstein, now serving a lengthy prison sentence for sexual assault and rape—turned into what James Stewart of the New York Times described as “an unprecedented public relations disaster for the most prominent lawyer in America.” Partner departures from BSF picked up speed in the wake of the Theranos and Weinstein controversies, and some observers attribute the firm’s recent challenges to fallout from those representations.
In 2014, Boies and BSF began their pro bono representation of Virginia Giuffre, a victim of the late Jeffrey Epstein, the financier turned notorious sex trafficker. Maxwell, a former girlfriend and close associate of Epstein, was accused of recruiting and grooming victims for Epstein. As such, she became a person of intense interest for Boies Schiller, which represents Giuffre along with other Epstein victims—and Boies and his partner Sigrid McCawley took Maxwell’s infamous depositions.
My read on these remarks: succession at Boies Schiller probably won’t happen until there’s no choice, i.e., Boies and Schiller leave their namesake firm. Acknowledging this might be more honest than trying to develop a succession plan when the founding partners aren’t ready to step away just yet—and maybe won’t ever be. This lack of a plan might not be ideal, but perhaps it can’t be any other way.
Per Bloomberg Law, Boies Schiller’s share of the $630 million fee award in Blue Cross Blue Shield should be around $125 million. That’s half the total revenue the firm generated in 2020, when it had significantly higher headcount. Assuming the settlement is approved, BSF’s revenue per lawyer should be very high in 2022.