With new leadership in place and a stream of departures, 2020 is already shaping up as a year of significant changes for Boies Schiller Flexner.

At least eight partners, out of about 150, have announced moves from the firm since the start of the year, including two overseeing a substantial bank monitorship. Even for a January, when year-end compensation is paid out, the flow of departures was high.

Coming just weeks after Nicholas Gravante and Natasha Harrison helped take the reins as additional managing partners, the spate of partner departures is raising fresh questions about the direction of the firm. Still, Gravante, Harrison and others said the exits will have no material effect on Boies Schiller's financial performance, and they plan to continue the same strategic vision formed by founders David Boies and Jonathan Schiller.

All of the departing lawyers have cited distinct motivations—entrepreneurial drive, a desire to work at a more global firm, a better mesh of practice groups and priorities. But observers also pointed to frustrations, especially among younger partners, with aspects of leadership and the firm's pay system.

In recent years, Boies Schiller undertook a detailed review of its compensation system, a black-box system that has its fans and its detractors. Some partners supported a model with compensation tiers, or bands, said two sources familiar with the firm. A new system could have resulted in more compensation flowing to younger business generators, two sources said.

No major changes came up for a vote last year, but Harrison said in a statement Monday that the firm's leaders still plan to consider broad changes to the firm's compensation model.

Meanwhile, two sources said that despite Gravante and Harrison's new roles, Schiller has been heavily involved in the management of the firm. Schiller himself said in an interview that he has been able to focus more on firm matters since his post as the chair of Columbia University's board of trustees ended in 2018. But he described his role more as a resource for Harrison and Gravante than as a hands-on manager.

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'Nothing to Do With Leadership'

Recent partner exits included three prominent Boies partners who had served in the Obama administration. Kathleen Hartnett, a former Justice Department attorney who was co-leader of Boies Schiller's San Francisco office, joined Cooley at the end of January as a partner. Lee Wolosky and Dawn Smalls, New York-based partners who are independent monitors overseeing Deutsche Bank's compliance with a major regulatory settlement, moved from Boies to Jenner & Block. Two sources said the annual revenue that could come from such a matter was upward of $10 million.

Before those exits were known, two groups of partners from Boies spun off separate firms. They include a Florida firm, Heise Suarez Melville, founded by three partners, and another practice in New York and Miami, Roche Cyrulnik Freedman, founded by a group that includes two people who were partners and several other associates and counsel.

In interviews, Gravante said he views the exits as a sign of the firm's natural evolution.

"In the first generation of any law firm, there's a lot of personal loyalty to people who formed the firm," Gravante said. "Now that we are maturing … I believe institutional loyalty displaces personal loyalty to the founders, [and] my sense is it is not as strong a bond as personal loyalty."

"We don't expect any drop in revenues as a result of these departures," Harrison added. "I believe very strongly it has nothing to do with leadership."

Harrison said it's true that a report had been prepared on the firm's compensation system and the firm's executive committee is contemplating changes to its partner compensation formula, but stressed the need to move carefully.

"We are now taking a number of steps on this important issue," she said in the statement Monday. "The first step is reevaluating our equity allocation system. That is happening now, and the results should be determined by the end of the first quarter. The second step will involve the firm's leadership determining if the firm should continue with formula compensation with some changes or replace the system entirely with a different model."

It's not just partner compensation that's being discussed, she added, saying the firm's leaders are also considering "a variety of options" for associate compensation.

To be sure, no one has suggested that Boies Schiller's future is threatened. The firm reported a robust $420 million in revenue in 2018 (its 2019 numbers were not available as of press time, but Boies said he did not anticipate material changes). Profits per equity partner are over $3 million, a status shared by only 20 law firms.

Nor does the firm, which currently lists 282 lawyers on its website, view every departure as a loss. Gravante said in a 2019 interview with Lawdragon that one of his priorities was "retrenchment"—"doing fewer things better"—and would be content with a firm of 200 lawyers. Asked whether the recent departures were part of that retrenchment, the new leaders did not answer directly but said there are hires in the pipeline.

Harrison said, "The lawyers that we are hiring are those who will thrive on a unique platform [and] will generate and help us grow our core client relationships."

Schiller said in an interview shortly after the Roche Cyrulnik departures were announced that he wished them well. "They're all nice people, they're good people," he said. "They're not the core of our business … but they're good lawyers."

"We built our firm" on alternative fee arrangements, just as Roche Cyrulnik has said it plans to do, Schiller said. "I think they want a fresh start, they've got a fresh start."

Speaking generally on lateral exits in a January interview, Schiller said the people "who leave our firm aren't leaving because they're unhappy with our firm. They're leaving for some greener pasture." He added, "They want to go somewhere where they're given assignments and paid and don't have to worry about other things."

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Steady Hands

Gravante and Harrison did not come into the managing partner post to shake things up. The two were generally described by their partners and predecessors as good leaders and steady hands at the tiller.

Gravante is known for being a major business generator, a key person in relationships with insurance clients such as the Starr Cos. and various Lloyds syndicates, property giants like Related Cos. and Kushner Cos. and HSBC, one of the world's biggest banks.

"I really understand what has made this firm great," said Gravante, who's been there for two decades. "We want to make sure we don't lose sight of those things, because it's very easy to want to change … because of trends. But we know what got us here: recruiting the best people, making sure we take on the most interesting cases, continuing our commitment to public service as well as aggressive lawyering."

The four-person management committee that was created just over a year ago has now ceded its responsibilities to the new managing partners. Gravante was a member of that committee, and he said he and Harrison still rely on its other members—Damien Marshall, Karen Dunn and Philip Korologos—for advice, calling them "central architects on the transition."

The two new managing partners are certainly busy; the former management committee's duties, passed on to Gravante and Harrison, include salaries and draws, hiring, billing rates, and major pro bono cases. Harrison said she and Gravante have taken over day-to-day running of the firm, and they exchange hundreds of emails per day.

Boies himself is not going anywhere, even amid controversy dogging the firm in recent months.

Gravante and Harrison were named as managing partners in December, alongside Schiller and Boies, just two weeks after The New York Times published a story probing Boies' contacts with a shadowy figure who claimed to have access to sex tapes of powerful men that Jeffrey Epstein had secretly obtained. Boies was already facing criticism for his representation of Hollywood producer Harvey Weinstein in efforts to quash reporting on sex misconduct allegations against him.

Gravante, Harrison and others said the timing of the managing partner announcement had nothing to with the Times report. Harrison said the firm's annual partner meeting in December was a "natural" time for major developments to take place, and Gravante said talks about the two of them becoming managing partners started perhaps two months before the meeting.

Boies, one of the four managing partners, was reelected last year as chairman of the firm. He and Schiller, the fourth managing partner, remain significant business generators for the firm, but more partners over the years are bringing in a bigger portion of revenue: In 2019, less than 20% of the firm's business came from matters generated by name partners, Boies said.

Boies, who turns 79 in March, said in a December interview that there's no set time frame for him to retire. He's said many times that he enjoys lawyering too much to leave it behind. He did raise, as a hypothetical, the prospect that he won't be a managing partner in five years, though Schiller may stay on, he said. But even then, Boies said, he thought he'd still be practicing law.

Boies described the new managing partners as just the latest step in a transition that has been underway for years. He said the firm's partnership agreement was substantially altered in 2009, and major responsibilities have been devolved to administrative partners since then.

And Gravante said that the leadership transition has been going according to plan.

Over the years, the firm's reliance on Boies, Schiller and Don Flexner, who has mostly retired, as business generators has receded. That's because the rest of the firm's lawyers have been winning more work, not because the name partners' contributions have dropped, Boies said.

Quyen Ta, an administrative partner in the San Francisco office, said the transition has been gradual and iterative. Clients haven't been handed down, so much as the relationships have deepened and expanded to touch more lawyers, she said.

"When we say [to associates or more junior partners] 'please manage the case for me,' … that's how we pass on the quote-unquote torch," she said.

One of the firm's key clients, the Starr Cos. insurance organization, came to the firm in a similar way. Hank Greenberg, the former chairman of AIG who now leads the Starr Cos., worked closely with Boies while he was defending Greenberg against a fraud case brought by the New York state attorney general. Gravante was also a player on that team. Now, said Bertil Lundqvist, the companies' general counsel, Gravante is a go-to litigator for Starr's high-stakes matters.

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Day to Day

The firm's new leaders say they're not just running the day-to-day work of the firm, but have improvement plans of their own.

In the near term, Gravante said he wanted the firm's lawyers to better promote their colleagues' services, citing as examples Charles Miller's work on divorce cases and the expertise of Harlan Levy, who formerly held a top post in the New York AG's Office, in dealing with state attorney generals' investigations. Partners will send each other requests-for-information on such areas without realizing the firm has great talents in-house, he said.

"We've got to do a better job at making sure people know everything we do," Gravante said.

In the longer term, the firm plans to grow its intellectual property practice. One of the firm's major successes in that area was its work for Apple, alongside Fish & Richardson, in the tech giant's multifaceted dispute with chipmaker Qualcomm.

Gravante and Harrison are currently on a swing through all 14 of the firm's offices to meet and hear from attorneys outside of New York, where Gravante works, and London, Boies Schiller's only international office and Harrison's home base.

Harrison joined the firm six years ago from Bingham McCutchen and built its London office from scratch. She's one of relatively few women leaders of law firms in the Am Law 100, and she said women associates and younger associates seemed particularly happy when she was announced as a managing partner at the firm's meeting in Key Biscayne, Florida, last December.

Gravante came to the firm in 2000, when his firm Barrett Gravante Carpinello & Stern became the New York City office of Boies Schiller. He'd previously worked at Cravath, Swaine & Moore leaving to work with the famed trial lawyer Jerry Shargel.

Conversations with other Boies Schiller partners suggest the firm's new managing partners don't want to veer too much from the founding partners' strategy.

Asked whether the new leaders had a different vision from Boies and Schiller, David Willingham, a white-collar partner in California who is on the firm's executive committee, said, "Different in the way that it's them carrying it forward."

"It's no secret the firm will be different in 10 years than it is today," Willingham said. But then again, he added, "That's true of every law firm."

While they have their own plans for moving the firm forward, Harrison and Gravante also said they welcome Boies and Schiller's expertise.

"They have line responsibility," Schiller said. "And then they liaise with [Boies and me] on each of their tasks, every few weeks, once or twice a month," or when something unusual comes up, he said.

He added, "We're not just saying, 'OK, you're in charge. I'm off to play golf.'"

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