In December, Boies Schiller Flexner partners Natasha Harrison and Nick Gravante became the first attorneys to lead the firm whose last names weren't Boies, Schiller or Flexner. The leadership announcement followed a tough three years for the firm, which had been grappling with a public relations beating over founder David Boies' work for controversial clients and an extended slip in the Am Law 100 rankings.

But Harrison and Gravante's honeymoon was short-lived: In the months since, at least 31 partners have left to join Am Law 100 peers such as Cooley, King & Spalding and Covington & Burling, culminating with a 15-partner exodus from the firm's West Coast offices in April. The moves have kept the firm in the headlines, raising fresh questions about its stability.

Former Boies Schiller attorneys and sources, many of whom spoke on the condition of anonymity, pointed to several elements that have motivated departures: Boies' representation of Harvey Weinstein and defunct blood-testing startup Theranos; the pace of transition to new leadership; and an opaque compensation system that left many lawyers feeling unrewarded.

As those tensions built, some measurements of the firm's financial growth were stagnating.

Revenue per lawyer, often considered the best measure of a law firm's financial health, took a dip from fiscal 2016 to fiscal 2017, causing the firm to fall from the top 10 in RPL rankings down to No. 21. While RPL recovered some over the next two years, it wasn't enough to regain its former elite status among the top-grossing firms. Meanwhile, Boies Schiller saw its overall revenue decline in 2019 for the first time since it was included in the Am Law rankings 17 years ago.

As the departures mounted this year, firm leadership cast them as "immaterial" to Boies Schiller's finances. The people who left did not share the firm's vision, Harrison and Gravante said, or they were asked to leave as part of a firmwide restructuring plan to reduce head count and return to high-stakes, bet-the-company trial work.

But interviews with nearly a dozen sources with knowledge of the firm, including former Boies Schiller attorneys, cast doubt on those assertions. Some of the partners who left had strong ties to clients such as Facebook and Uber, while others left with a lucrative monitorship with Deutsche Bank.

There is no one factor that led Boies Schiller to this point. Some of the defectors simply saw a better fit elsewhere. Many current and former Boies Schiller attorneys like and respect Gravante and Harrison, but that wasn't enough to make them all stay with the transforming firm.

"The headhunters are all over them, apparently having some success," said veteran legal consultant Peter Zeughauser in an early April interview. And that was before news broke last week that 15 partners in California were defecting to King & Spalding.

"They may wonder whether the new generation can restore the burnish the firm once had. That took a little bit of a hit, unfortunately, I think," Zeughauser added. "If the partnership writ large doesn't have the confidence that the next generation can restore that, then some of them will leave."

Slipping Numbers, Shrinking Partnership

Boies Schiller brought in $405 million in gross revenue last year and came in at No. 93 in the Am Law 100. Its emphasis on litigating big matters for big clients and taking on a large helping of contingency work has helped the firm punch above its weight, racking up $1.35 million in revenue per lawyer last year.

But the firm's relative growth of revenue per lawyer falls behind peers. From 2012 to 2019, the average RPL for the Am Law 100 grew by 18.6%. For Boies Schiller, it grew by 7.1%.

The firm also fell behind its peers in gross revenue growth. In 2017, it ranked No. 82 in the Am Law 100, and by this year it was down to No. 93 after gross revenue declined by 3.6%.

In the roughly four months since the firm wrapped up its last fiscal year and since Gravante and Harrison were elected as co-managing partners, the firm has lost at least 31 partners—or a little over a fifth of its approximately 150-attorney partnership.

Sources who spoke to Law.com said the departures were more serious than firm leaders let on. The departing attorneys worked on matters for important Boies Schiller clients including Uber, Facebook, Deutsche Bank, Barclays, Apple, Lyft and Goldman Sachs, they said.

Asked about the client relationships held by various departed partners, a spokesperson for Boies Schiller said in an email that the firm does not comment on its representation of existing clients. Firm leadership declined to make themselves available for interviews.

The mass departures began with three partners in Florida, where Boies Schiller built a practice focused on class action defense work. Mark Heise, Patricia Melville and Luis Suarez—the latter a newly-minted equity partner—announced in January that they were opening their own shop: Heise Suarez Melville.

Then, just days later, two more partners in New York and Florida announced similar plans to set out on their own, opening Roche Cyrulnik Freedman.

February brought three more partner departures. Partners Lee Wolosky and Dawn Smalls left to join Jenner & Block, taking with them a monitorship for Deutsche Bank. Three sources said the monitorship could bring in work worth up to $10 million annually, though a fourth source said it was likely lower than that.

Kathleen Hartnett, one of Boies Schiller's two administrative partners in San Francisco, jumped to Cooley and had a key relationship with Facebook, people with knowledge of the relationship said, although Karen Dunn, who remains a Boies Schiller partner, has a relationship with the social media giant as well. Cooley, for its part, had its own relationship with Facebook. Michael Rhodes, a longtime Cooley partner who leads its data privacy group, is currently representing Facebook in three cases filed out of California, including a biometrics case over its "tag suggestions" facial recognition feature.

Chris Duffy, who also left in February to join Vinson & Elkins, worked on nearly all of the firm's Barclays litigation and appeared as sole counsel for subsidiary Barclays Capital several times. Duffy was a key relationship partner for Goldman Sachs, according to two people with knowledge of the relationship.

Early April brought another three departures across D.C. and Los Angeles, including Stacey Grigsby, the firm's only black equity partner and a rising star in the firm.

Grigsby was a key relationship partner for Uber, which has frequently ranked among Boies Schiller's top 10 revenue-generating clients—and the type of client a firm would want to keep, if it's aiming to focus on tech and IP work. Uber general counsel Tony West, who worked with Grigsby in the U.S. Department of Justice, told Law.com in April that he would continue to work with Grigsby at Covington.

Still, just as she is with Facebook, Dunn remains as a link between Boies Schiller and the ride-share company. She has defended Uber in several multimillion-dollar cases.

Two sources also said Grigsby was a relationship partner for PepsiCo, where West was general counsel before going to Uber in 2017, although a firm spokesperson said Boies Schiller has not publicly represented the company in several years.

But the biggest blow to Boies Schiller this year came just last week, when a majority of the firm's West Coast partnership left the firm, including executive committee member David Willingham. Thirteen partners in Los Angeles who came to Boies Schiller through its 2017 merger with litigation boutique Caldwell Leslie & Proctor left last week for King & Spalding. Three sources familiar with the group's financial footprint put their contribution to the firm's top line revenue around $50 million to $60 million.

A Boies Schiller spokesperson, when asked if the firm still maintains that this year's departures were immaterial to revenue, and particularly about the California group's book of business, answered, "What you have heard is not accurate, not even close."

The recent California defections included former Caldwell Leslie name partners Chris Caldwell and Michael Leslie, as well as partner Luan Tran. Caldwell is known for having represented major movie studios and retailer The Gap, while Leslie has chalked up wins in several major environmental law cases. Tran, who worked for a Vietnamese firm in Singapore before joining Boies Schiller in 2018, is known for his international arbitration prowess and his work on disputes between founders of tech companies including Snap Inc. and the defunct app Yik Yak.

In San Francisco, Boies Schiller lost Quyen Ta, the office's remaining administrative partner after Hartnett's departure in February. She has worked with companies such as Chevron and VNG Corp., a billion-dollar Vietnamese tech firm. But two sources close to the firm say that her value lies not solely in her current book, but her potential as a future rainmaker and a savvy business developer.

Controversy and Compensation

Several of the partners who left just saw a better fit elsewhere, according to people with knowledge of the moves, and few took issue with Gravante and Harrison as leaders of the firm. While several sources disagreed with or were upset by the pair's remarks about departed partners, Gravante and Harrison mostly drew praise for their management abilities and business acumen.

And there are factors outside of Gravante and Harrison's control that have worked against them. For one, transitioning from a first generation of firm leadership to the second is difficult, especially when the firm was built upon the reputation of a famous trial lawyer like Boies.

"I think lawyers generally are averse to change and they join a firm because they like the way it is. When it changes they worry," said consultant Zeughauser.

Boies Schiller's transition began publicly with the appointment of a new four-person management committee in 2018. In the summer of 2019, the firm appointed several new administrative partners to its various offices across the country as it looked to create a more "horizontal" governance structure with greater autonomy for each office.

Then, in December, the firm elected Gravante and Harrison as co-managing partners. Though Boies and Jonathan Schiller are still in the picture, Gravante and Harrison are running the firm day-to-day, and the management committee created in 2018 is no more.

David Boies outside the U.S. Supreme Court after it issued key rulings deciding the future of same-sex marriage. June 26, 2013. Photo by Diego M. Radzinschi/ALM

Several people with knowledge of the departures pointed specifically to Boies' work with high-profile, controversial figures as a source of discomfort for some partners.

Boies became a media darling for his work litigating U.S. antitrust claims against Microsoft, defending CBS in Westmoreland vs. CBS, representing Al Gore and fighting for same-sex marriage rights in Hollingsworth v. Perry, among other cases. But his public image slipped amid reports in 2017 of his alleged role in Harvey Weinstein's effort to prevent the publication of articles accusing him of sexual assault. Boies has said he only helped Weinstein hire investigators and said it was a mistake to do that.

The scrutiny continued with the publication from 2016 to 2018 of several stories and a book, "Bad Blood," that painted an unflattering portrait of Boies' work with Theranos, where he had been a board member while representing the company.

And while Boies has since gone to bat for alleged victims of the sex predator Jeffrey Epstein, The New York Times reported in late 2019 that he was involved in a roundabout, unconsummated plan to extract settlements from powerful men accused of sexual misconduct in ways that didn't necessarily relate to the firm's clients.

Boies' involvement with Theranos and Weinstein hurt the firm's image—particularly on the West Coast, sources said—and affected relationships with bread-and-butter regional clients like tech companies and movie studios.

"If you go out and you pitch in California or to a tech company people will ask 'Were you the firm involved with Theranos?'" a former Boies Schiller partner said.

Asked about those representations, a Boies Schiller spokesperson said, "We do not believe that is the reason the lawyers were unable to develop business. Many other firm lawyers, including of course David Boies, have been very successful in continuing to develop business."

Another factor driving departures, sources said, was that some partners took issue with the firm's compensation system. They said many believed it was too opaque—with the distribution of equity known only to a few people—and unfavorable to the younger partners at the firm.

The firm uses a formula that gives lawyers credit for realized hours as well as 2.5% of fees paid by clients they originate, 5% of fees paid in each specific matter they originate and 5% of fees for each matter for which they are the "responsible lawyer," according to three sources. But some partners took issue with how those credits were allocated.

Asked about those complaints, a Boies Schiller spokesperson said a majority of the firm's lawyers believe that its compensation system is unusually transparent and fair.

These criticisms accelerated departures at the firm, sources said, particularly among younger attorneys. Nearly half of the firm's newly-minted 2020 equity partners left in the past few months. And this year's exits add to last year's defections of rising stars like Travis LeBlanc and Michael Gottleib, who went to Cooley and Willkie Farr & Gallagher, respectively.

"Any entity needs to find ways to motivate and incentivize guys that are in [their 40s] and in their 50s," one former Boies Schiller attorney said. "If not, the tier of the late 40s and 50s are going to walk out of the door."

A Firm Restructured

Gravante and Harrison have cast the departures this year as a result of a firmwide restructuring. A spokesperson said the restructuring has been planned since 2016 and began in 2019 to create a firm that is "better organized, more efficient, more cohesive."

Asked about the firm's restructuring plans and how they relate to revenue per lawyer, the firm spokesperson simply answered, "We believe that the revenue per lawyer will increase, but that is not the primary goal. The firm's revenue per lawyer remains strong."

In interviews with the Financial Times, Gravante and Harrison elaborated on the restructuring, adding that the firm is accelerating the pace of transition, closing six or seven of its 14 offices, cutting back on overhead costs and reducing head count to return to the sort of bet-the-company work on which Boies built the firm's reputation. The firm does plan to boost its bankruptcy and restructuring practice, FT reported.

"With 350 litigators it was difficult to be a firm that limited itself to only the best and most important matters," Gravante told FT. "We were going to be smaller long before the pandemic."

He had also invoked the prospect of "retrenchment" in a 2019 interview with the website LawDragon.

Still, the firm has gone on-record to invoke the prospect of growth in recent years. In a March 2019 press release about its new Hudson Yards offices, Boies referred to a "growing, global" firm. And in June, a co-managing partner of the firm's D.C. office mentioned plans to grow head count in that office.

Boies Schiller's head count had been steadily growing for most of the past decade. In fiscal year 2012, the firm employed 258 attorneys, according to ALM data. The number grew to 320 until last year it declined to 300.

"There were some partners that have been encouraged to leave that have left, but I think that may be like 15% [of recent departures], not 85%," said one former Boies lawyer.

The firm declined to comment on which or how many attorneys were asked to leave.

If head count reductions are part of a plan to make the firm stronger and more profitable, some amount of departures would be a good thing. Indeed, defections are fairly common in transitions, Zeughauser said, although firms must take care to avoid what he calls "regrettable departures."

The firm has continued to hold onto some major rainmakers.

Dunn, who was The American Lawyer's 2017 Litigator of the Year, is widely praised as a top-notch litigator who has successfully defended companies such as Apple, Uber and Oracle in high-stakes cases. Longtime partner Bill Isaacson also has been dubbed Litigator of the Year and notched big wins both on the plaintiffs and defense side. In Florida, partner Steve Zack continues to maintain a notable class action practice and, as past president of the American Bar Association, has long been active in the legal community.

Gravante and Harrison also are major business generators known for their work with hedge funds, insurance companies, real-estate giants and others. "I honestly think that Nick can keep 100 people busy," one person close to the firm said. "He has that type of practice."

David Barnard, a partner at consulting firm Blaqwell, said it isn't uncommon for firms to keep head count static or shrink their partnerships as part of a restructuring effort to maintain a higher share of high-value work.

Barnard cautioned that it can be difficult to know whether a restructuring is genuine: "Whether or not what's going on at BSF is bravado or strategic reality is hard to tell from the outside."