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Boies Schiller law firm loses several lawyers due to problems with Harvey Weinstein, Elizabeth Holmes, the founder's children

Attorney David Boies, who represents several alleged victims of Jeffrey Epstein, leaves federal court after a bail trial for Jeffrey Epstein on July 15, 2019 in New York City.

Drew Angerer | Getty Images

One of America's most famous law firms is struggling to retain talent.

Legal powerhouse Boies Schiller Flexner has seen a rapid churn of several top lawyers, many of whom have been disrupted by alleged decisions made by the company's founders.

This article is based on interviews with more than half a dozen people with direct knowledge of various issues facing the firm, from alleged nepotism to the unsavory reputation of some high profile clients. These people declined to be identified in order to avoid possible retaliation by the company.

The firm's founders are David Boies and Jonathan Schiller, who have been key figures in major political and corporate cases for decades.

Boies is known for representing the US government in its 2001 breakthrough antitrust litigation against Microsoft and for winning a ruling that lifted California's ban on gay marriage. Schiller has represented Goldman Sachs and the New York Yankees, among others.

But lawyers who left the country have described their dissatisfaction with Boies for working with Harvey Weinstein, the disgraced Hollywood mogul who was convicted of rape, and accused cheater Elizabeth Holmes and her discredited blood testing company Theranos.

You have also alleged that Schiller's own family members received preferential treatment inside and outside the company. Employees criticized the founders' dealings with one of the sons of Jonathan Schiller, a lawyer at the firm, after he had allegedly used racist and homophobic terms at a party run by another lawyer in the firm.

Many people have argued that Boies and Schiller sometimes overruled the company's management, which had tried to formulate a succession plan in case the founders eventually leave their roles. Former company executives privately claim that they have not always been given specific details about the company's finances, said people familiar with the matter.

"You keep appointing new people to be managing partners, but the reason people are leaving is because it's [the company] is just a name," a former Boies Schiller partner told CNBC. "There is no transition and David and Jon decide everything."

After contacting the firm's PR team, CNBC spoke to Matt Schwartz, who is one of the firm's new co-directors alongside Sigrid McCawley and Alan Vickery. Schwartz is not related to this reporter.

During the almost hour-long conversation, Schwartz denied that Boies and Schiller make all the decisions. He said that company executives are always given details of the company's financial dealings, including with outside vendors. He also insisted that he and other co-directors oversee day-to-day operations.

“David and Jonathan are on the executive committee. Of course they are part of these discussions, ”Schwartz told CNBC on Friday. "You hold the title of managing partner and are an important resource for us. But honestly and in every respect, the four new managing partners of Natasha [Harrison], Sigrid, Alan and I run the day-to-day business of this company and we do this under the Direction and supervision of the Executive Committee. Anyone who tells you that the founding partners lead everything is wrong. "

"The short answer is, if I want to know how much money we're paying for a particular vendor or item, yes, that's something to know," added Schwartz.

Numerous runs

At the end of 2020, Boies Schiller Flexner employed around 200 lawyers. It previously employed just over 300. It has a high profile client list including Facebook, American Express, Chevron, Delta, Barclays, Oracle, and Sony. Founded in 1997, the company has offices in New York, Miami, Washington, D.C., San Francisco, Los Angeles and London.

But the company has experienced a brain drain in recent months: According to Bloomberg, almost 60 partners left last year. Some of the organization's top clients followed their attorneys who left them. Two of the most recent departures reportedly represented Apple, Facebook, Oracle and Elon Musks Solar City Corp.

The company's other corporate clients include Delta, UnitedHealthcare, John Hancock, Lincoln National, Carnival, NextEra and Burger King.

Boies himself said in an earlier interview with attorney and legal commentator David Lat that "some of the partners who have left the firm in the past have done so because they were disappointed with the management decisions or had a different vision for the firm's future had". . "He did not provide any further details.

Nick Gravante, a managing partner, left the company last year. Gravante and other top lawyers such as Karen Dunn and Damien Marshall were on the management committee, which, according to Law360.com, “handles day-to-day 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 vice chairman of Boies Schiller, left Paul, Weiss last year.

A leader resigns

Another leader could be around soon: Harrison, who recently stepped down as vice chairman. Boies once said that Harrison, who is based in London and is also a managing partner, is his successor. People familiar with the situation said Harrison could now leave Boies Schiller.

Harrison said in a statement to CNBC that she had no contact with any other company, but specifically did not say in her comment whether she had any future plans to leave Boies Schiller.

"I am not with any other law firm, nor do I plan to argue with any other law firm, and any suggestion to the contrary is wrong," said Harrison. "It is an honor to work with the other managing partners to lead one of the world's leading litigation firms through the transition into the second generation, and in that regard we have made significant and important advances in the past twenty months."

Harrison's decision to step down from the position of vice chairman was for personal reasons and not an indication that there were any problems with the company, according to an internal memo dated September 1 and reviewed by CNBC. The memo was signed by the company's managing partners, including Harrison, Boies and Schiller.

"Regarding the pandemic in particular, international travel restrictions have prevented Natasha from spending the time in the US and actively working with the executive team, the company and our US-based customers that she deems necessary to meet the requirements Vice-Chairman's duties, "the memo reads.

Schwartz confirmed that with Harrison no longer serving as vice chairman, she will not be able to succeed Boies as chairman of the firm.

"That won't happen now. That is the meaning of Natasha's resignation as vice-chairwoman. It really is a sign that she will not take over the chairmanship," said Schwartz. He said Harrison resigned from her post "because she could not commit to becoming chairman".

Schwartz gave no indication that there are any future plans to transition beyond the current management structure, including the fact that Boies and Schiller will continue to hold any type of leadership position within the company.

“The succession plan means: How should the firm be continued? The firm is now run by a much broader group of people than the founding partners, ”said Schwartz. "The day-to-day business is run exclusively by the four new managing partners, under the guidance, but not control of the founding shareholders. That is the succession plan in action."

Schwartz didn't seem to think that Boies and Schiller had plans to retire from the company, including possible retirement. “No, I mean, you'd have to ask her. It's a personal choice for them, not something we're going to force on them, ”he said.

Quarrel with a Schiller son

Harrison was one of many Boies Schiller executives and company employees who were concerned by the original domestic violence allegations against Josh Schiller, a company partner and son of Jonathan Schiller, according to people familiar with the matter.

Josh Schiller was arrested in January on charges of domestic violence. His lawyer said at the time: "There was no case of domestic violence." Schiller is married to Melissa Siebel Schiller, a sister-in-law of California Governor Gavin Newsom.

The company put Josh Schiller on leave after his arrest. He returned to work earlier this year after outside investigators acquitted him and prosecutors dropped the charges. He was acquitted because "there was no physical harm or domestic violence in this case," his lawyer told reporters.

A person within the company who refused to be named to speak freely about private matters said Jonathan Schiller had withdrawn from all matters involving the investigation against his son.

But many executives at the company complained that this was only the most recent incident with Josh Schiller, said these people.

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

One person with direct knowledge stated that Schiller was trying to re-enact a joke by Dave Chappelle that compared the use of the N-word to a homophobic insult.

Afterward, Estrich sent a message to management calling the comment inappropriate, people added. A member of the management team had privately insisted on an investigation from other executives at the company, but none of the party guests had been contacted, the person said.

"Everyone who heard it was horrified," this person who was at the party told CNBC.

Josh Schiller later told his staff that he used those words as part of a joke, one of the people said. Schiller did not respond to an email asking him to comment on the incident.

Estrich left the firm last year and is now a partner at Estrich Goldin. Among other career moves, Estrich is known as a lawyer who defended the late Fox News manager Roger Ailes from allegations of sexual harassment.

She did not respond to CNBC's request for comment.

Doing business with another Schiller son

Another Schiller son, Aaron Schiller, runs an architecture firm, Schiller Projects, which has done business with the law firm. Schiller Projects designed three offices for Boies Schiller, including the new office in New York's Hudson Yards complex and offices in San Francisco and Washington.

Several firm executives were frustrated that they were not consulted prior to the settlement with Aaron Schiller's firm, said people familiar with the matter. Executives and employees of the company are also dissatisfied with the office design of Hudson Yards, the employees added.

Schwartz told CNBC that Jonathan Schiller didn't choose to hire his son's company.

"This design company was not selected by Jonathan. It was made by other directors and was a bidding process," Schwartz said.

Hudson Yards office staff moved there from their former Lexington Avenue office in 2019.

Schiller Projects says on its website that the Hudson Yards rooms "don't have private corner offices, but rather a flowing space – a unique approach to open office design". The website describes the space as "a reversal of the traditional lawyer model that converts closed offices into open workspaces" and says it "promotes measurable increases in collaboration and employee satisfaction in the workplace".

But lawyers often use private rooms to read briefs, which are often confidential, and to call clients. Boies Schiller employees have complained about being crammed into so-called fishbowl offices, forcing them to call customers from cubicles instead of their desks, several people said.

Schiller Projects did not respond to an email requesting a comment.

Boies, Weinstein and Holmes

Boies can't escape the fact that he helped both Weinstein and Theranos extensively.

The New Yorker reported in 2017 that Boies personally signed a contract with an investigative firm called Black Cube to uncover information that could stop the New York Times from publishing an article about Weinstein's abuse.

Boies & # 39; The company represented the Times in a defamation lawsuit at the time. Boies confirmed to The New Yorker that his company has signed and paid for two investigative agencies on Weinstein's behalf.

Prospective clients have since chosen not to work with the company because Boies helped Weinstein, said people familiar with the matter.

"It's not that Weinstein and Theranos are helpful to the company," a former partner told CNBC. "There are many women who resent the whole company. They don't want to hear the name Boies Schiller Flexner."

Around 2017, members of the Boies Company confronted his role of helping Weinstein while on a private retreat. Ahead of Boies answering questions from members, Dunn was raised by a group of company employees with concerns that Boies could help Weinstein, according to several people familiar with the conversations.

Dunn did not respond to CNBC's requests for comment.

In remarks similar to those made at the retreat, Boies told the New York Times in 2018 that although he admits he made mistakes, he was only defending his client. In the same interview, Boies used the same reasoning as to why he was defending Theranos.

"You don't know all the facts when you take on a client," he said at the time, "but once you have it, you have a duty of loyalty. You cannot represent it halfway. When you are a lawyer you begin to appreciate how you are in." the media, as opposed to what your client will look like, then you should find a new job. "

The company's PR team sent CNBC a comment from Joanna Wright, a partner and new member of the board, on the decision to keep Black Cube.

“Keeping Black Cube for Weinstein was a grave mistake, as David himself said. Since then, we've put procedures in place to make sure this never happens again, "Wright said in the statement. "But I don't think there is any other company where you can consistently do well while doing well on the scale and level that we have done in the past and continue to do today."

Holmes and Theranos engaged Boies and a team of lawyers from his firm in a dispute with the Wall Street Journal over the paper's attempt to publish a story about Holmes' company, according to The Mercury News. In 2015 Boies was a member of the Theranos board of directors. The Times reported that he had worked to suppress reporting by then Wall Street Journal investigator John Carreyrou.

Carreyrou wrote an acclaimed non-fiction book on Theranos & # 39; Rise and Fall, titled "Bad Blood: Secrets and Lies in a Silicon Valley Startup".

Holmes is on trial for fraud. She recently lost an offer to keep more than a dozen emails between her and Boies Schiller's attorneys out of the trial.

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