Boies Schiller loses attorneys over controversies involving Theranos, Harvey Weinstein

One of America’s most outstanding regulation corporations is struggling to carry on to expertise.

Legal powerhouse Boies Schiller Flexner has skilled a fast exodus of a number of high attorneys, lots of whom had been bothered by purported choices by the agency’s founders.

This article relies on interviews with greater than a half-dozen folks with direct data of varied points on the agency, from alleged nepotism to the unsavory repute of some high-profile purchasers. These folks declined to be named to be able to keep away from attainable retribution from the agency.

The agency’s founders are David Boies and Jonathan Schiller, who’ve been key gamers in main political and company instances for many years.

Boies is understood for representing the U.S. authorities in its landmark 2001 antitrust case towards Microsoft and for serving to win a choice that overturned California’s ban on homosexual marriage. Schiller has represented Goldman Sachs and the New York Yankees, amongst different main firms and entities.

But attorneys who left have described their dissatisfaction with Boies for working with Harvey Weinstein, the disgraced Hollywood mogul who has been convicted of rape, and accused fraudster Elizabeth Holmes and her discredited blood-testing agency Theranos.

They have additionally alleged that Schiller’s family members obtained preferential therapy, each contained in the agency and out. Employees, for example, took concern with the best way the founders handled one among Jonathan Schiller’s sons, a lawyer on the agency, after he purportedly used racist and homophobic phrases at a celebration thrown by one other of the agency’s attorneys.

Many folks argued that Boies and Schiller typically overruled the agency’s administration committee, which had been attempting to formulate a succession plan for when the founders finally go away their roles. Former leaders on the agency would privately declare that they weren’t at all times introduced particular particulars in regards to the agency’s funds, folks acquainted with the matter stated.

“They keep naming new people as managing partners, but the reason people are leaving is it [the firm] is just a name,” a former Boies Schiller accomplice informed CNBC. “There’s no transition going on, and David and Jon are deciding everything.”

After reaching out to the agency’s public relations workforce, CNBC spoke with Matt Schwartz, who is likely one of the new co-managing companions on the agency together with Sigrid McCawley and Alan Vickery. Schwartz is just not associated to this reporter.

During the practically hourlong dialog, Schwartz denied that Boies and Schiller are making all the selections. He stated the leaders of the agency are at all times given specifics in regards to the agency’s monetary offers, together with with outdoors distributors. He additionally insisted that he and different co-managing companions oversee day-to-day operations.

“David and Jonathan are on the executive committee. Of course they are part of those discussions,” Schwartz informed CNBC on Friday. “They hold the titles of managing partners and are an important resource for us. But truly and honestly in every way the four new managing partners of Natasha [Harrison], Sigrid, Alan and myself run the day-to-day operations at this firm and we do so under the guidance and oversight of the executive committee. Whoever is telling you that the founding partners are running everything is wrong.”

“The short answer is if I want to know how much money we are paying for any particular vendor or item, yes, that is something that is knowable,” Schwartz added.

At the tip of 2020, Boies Schiller Flexner employed around 200 lawyers. Previously it employed just over 300. It boasts a high-powered client list including Facebook, American Express, Chevron, Delta, Barclays, Oracle and Sony. The firm, founded in 1997, has offices in New York, Miami, Washington, D.C., San Francisco, Los Angeles and London.

But the firm has experienced a brain drain in recent months: Nearly 60 partners left last year, according to Bloomberg. Some of the organization’s top clients followed their attorneys who left. Two of the recent departures reportedly represented Apple, Facebook, Oracle and Elon Musk’s Solar City Corp.

Additional corporate clients of the firm include Delta, UnitedHealthcare, John Hancock, Lincoln National, Carnival, NextEra and Burger King.

Boies himself said in a previous interview with lawyer and legal commentator David Lat that “some of the partners who have left the firm in the past did so because they were disappointed with leadership choices or because they had a different vision for the future of the firm.” He didn’t give further details.

Nick Gravante, a managing partner, left the firm last year. Gravante and other top attorneys, such as Karen Dunn and Damien Marshall, were part of the management committee that, according to Law360.com, was meant to “assume day to day responsibilities of operations as part of a long term plan to transfer leadership of the litigation firm from its founder to the next generation.”

Dunn and William Isaacson, who was a vice chair at Boies Schiller, left last year to join the firm Paul, Weiss.

Another leader might soon be out the door: Harrison, who recently stepped down as deputy chair. Boies once said Harrison, who is based in London and is also a managing partner, was in line to be his successor. People familiar with the situation said Harrison could now end up leaving Boies Schiller.

Harrison told CNBC in a statement that she has not been in touch with other firms but notably did not say in her comment whether she had any future plans to leave Boies Schiller.

“I am not in discussions with any other law firms, nor do I plan to enter into discussions with any other law firms, and any suggestion to the contrary is false,” Harrison said. “It is an honour to be working with the other managing partners to lead one of the world’s leading litigation firms through its transition to the second generation and in this regard, we have made significant and important progress over the last twenty months.”

Harrison’s decision to step down from the deputy chair role was due to personal reasons and not a suggestion that there are any problems at the firm, according to a Sept. 1 internal memo reviewed by CNBC. The memo was signed by the firm’s managing partners, including Harrison, Boies and Schiller.

“Most notably as it relates to the pandemic, international travel restrictions have prevented Natasha from spending the kind of time in the U.S., actively engaging with the leadership team, the Firm and our U.S.-based clients, that she feels is necessary to fulfill the obligations of the Deputy Chair position,” the memo said.

Schwartz confirmed that, since Harrison is no longer deputy chair, she will not be in line to succeed Boies as chair of the firm.

“Now that is not going to happen. That’s the significance of Natasha stepping down as deputy chair. It’s really a signifier that she’s not going to take over as chair,” Schwartz said. He said Harrison stepped down from the post “because she couldn’t make a commitment to become chair down the road.”

Schwartz gave no indication that there are future plans to transition beyond the current management structure, including having Boies and Schiller continue to hold some sort of leadership positions within the firm.

“The succession planning means: How is the firm going to be run after? The firm is now run by a group of people that is much broader than the founding partners,” Schwartz said. “The day to day is run exclusively by the four new managing partners, with guidance from, but not control by, the founding partners. That is the succession plan in action.”

Schwartz didn’t seem to think there were any plans for Boies and Schiller to step away from the firm, including possibly retiring. “No, I mean you’d have to ask them. That’s a personal decision to them, not anything that we’re going to try to force upon them, certainly,” he said.

Harrison was one of many Boies Schiller leaders and firm employees who were disturbed by the original domestic abuse allegations levied against Josh Schiller, a partner at the firm and the son of Jonathan Schiller, according to people familiar with the matter.

Josh Schiller was arrested in January on a domestic violence allegation. His lawyer, at the time, said “there was no instance of domestic violence.” Schiller is married to Melissa Siebel Schiller, who is a sister-in-law of California Gov. Gavin Newsom.

The firm put Josh Schiller on a leave of absence after he was arrested. He returned to work earlier this year after outside investigators employed by the firm cleared him, and prosecutors dropped the charge. He was cleared because “there was no physical harm or instance of domestic violence in this case,” his attorney told reporters.

A person within the firm, who declined to be named in order to speak freely about private matters, said Jonathan Schiller recused himself from any matter involving the investigation into his son.

Yet, for leaders at the firm, many took issue with the fact that this was only the latest incident involving Josh Schiller, these people explained.

For instance, Josh Schiller was heard using the N-word at a party hosted by Susan Estrich, who joined the firm and became a partner in 2018, according to people familiar with the matter.

A person with direct knowledge explained that Schiller tried to reenact a Dave Chappelle joke evaluating the usage of the N-word to a homophobic slur.

Afterward, Estrich despatched a word to the agency’s management calling the comment inappropriate, the folks added. A member of the administration committee privately insisted to different leaders on the agency on an investigation however not one of the celebration friends had been contacted, this individual defined.

“Everyone who heard it was horrified,” this one that was on the celebration defined to CNBC.

Josh Schiller later informed associates that he used these phrases as a part of a joke, one of many folks stated. Schiller didn’t reply to an e-mail searching for touch upon the incident.

Estrich left the agency final 12 months and is now a accomplice at Estrich Goldin. Among different profession strikes, Estrich is named the legal professional who defended the late Fox News govt Roger Ailes from accusations of sexual harassment.

She didn’t reply to CNBC’s request for remark.

Another Schiller son, Aaron Schiller, runs an structure firm, Schiller Projects, which has carried out enterprise with the regulation agency. Schiller Projects designed three workplaces for Boies Schiller, together with its new workplace in New York’s Hudson Yards complicated and workplaces in San Francisco and Washington.

Several leaders on the agency had been annoyed over not being consulted earlier than the settlement with Aaron Schiller’s agency, folks acquainted with the matter stated. Leaders and associates on the agency are additionally sad with the Hudson Yards workplace design, the folks added.

Schwartz informed CNBC that Jonathan Schiller did not determine to have the agency rent his son’s firm.

“The selection of that design firm was not made by Jonathan. It was made by other members of the firm management and was the process of competitive bidding,” Schwartz stated.

Employees on the Hudson Yards workplace moved there in 2019 from their former area on Lexington Avenue.

Schiller Projects says on its web site that the Hudson Yards area has “no private corner offices, but rather a flowing space — a unique approach to open office design.” The web site describes the area as “an inversion of the traditional law office model, flipping perimeter closed offices to perimeter open workspaces” and says it “is promoting measurable increases in collaboration and employee workplace satisfaction.”

But attorneys typically use personal areas to conduct the studying of typically confidential briefs and to name purchasers. Boies Schiller associates have complained about being crammed into what they described as fishbowl-type workplaces, forcing them to name purchasers from cubicles as an alternative of their desks, a number of folks stated.

Schiller Projects did not reply to an e-mail searching for remark.

Boies, in the meantime, can not seem to escape the truth that he extensively helped each Weinstein and Theranos.

The New Yorker reported in 2017 that Boies personally signed a contract for an investigative agency referred to as Black Cube to uncover info that would cease the publication of a New York Times article about Weinstein’s abuses.

Boies’ agency was representing the Times in a libel lawsuit on the time. Boies confirmed to The New Yorker that his agency contracted and paid two investigative companies on Weinstein’s behalf.

Potential purchasers have since opted to not work with the agency partially as a result of Boies helped Weinstein, folks acquainted with the matter stated.

“It’s not like Weinstein and Theranos are helpful to the firm,” a former accomplice defined to CNBC. “You’ve got a lot of women who resent the whole firm. They don’t want to hear the name Boies Schiller Flexner.”

Around 2017, members of the agency confronted Boies at a personal retreat over his function serving to Weinstein. In the buildup to Boies fielding questions from members, Dunn was approached by a gaggle of the agency’s staff with issues about Boies serving to Weinstein, in accordance with a number of folks acquainted with the conversations.

Dunn didn’t reply to CNBC’s requests for remark.

In remarks much like what he stated on the retreat, Boies informed The New York Times in 2018 that, whereas he concedes he made errors, he was simply defending his shopper. In that very same interview, Boies used the identical reasoning for why he defended Theranos.

“You don’t know all the facts when you take on a client,” he stated on the time, “but once you do, you have a duty of loyalty. You can’t represent them halfway. If, as a lawyer, you start to value how you are going to look to the media, as opposed to how your client will look, then you should find a new profession.”

The agency’s public relations workforce despatched a remark to CNBC from Joanna Wright, a accomplice and new member of the chief committee, in regards to the resolution to retain Black Cube.

“Retaining Black Cube for Weinstein was a serious mistake as David has, himself, said. We have since implemented procedures ensuring that never happens again,” Wright stated within the assertion. “Having said that, I don’t believe there is another firm where you can consistently do well while doing good at the scale and level we have historically done that and continue to today.”

Holmes and Theranos, in accordance with The Mercury News, employed Boies and a workforce of attorneys from his agency in a dispute with The Wall Street Journal because the paper was aiming to publish a narrative on Holmes’ firm. In 2015, Boies was a member of the Theranos board. The Times reported that he labored to quash reporting carried out by then-Wall Street Journal investigative reporter John Carreyrou.

Carreyrou went on to write down an acclaimed nonfiction guide about Theranos’ rise and fall referred to as “Bad Blood: Secrets and Lies in a Silicon Valley Startup.”

Holmes is on trial for fraud. She just lately misplaced a bid to preserve greater than a dozen emails between her and Boies Schiller attorneys out of the authorized proceedings.