Boies Schiller's downtown office
Photo by Thomas Wasper
At the height of an intoxicating advertisement in February 2017, Chris Caldwell was on Manhattan's Upper East Side and was courted at dinner in the fashionable Harry Cipriani Restaurant by David Boies, perhaps the most outstanding litigation lawyer of his generation.
Boies was determined to buy Caldwell's prestigious boutique law firm, Caldwell Leslie & Proctor, in Los Angeles.
At the time, Boies Schiller Flexner was facing declining revenue per lawyer and consolidation among its competitors. The company was also looking for an inexpensive way to enter the lucrative corporate litigation market in downtown LA.
After expanding his company in Armonk, New York, nationally and internationally, mainly through the acquisition of boutique companies in cities like New York and Miami, Boies believed that Caldwell Leslie & Proctor would be another good addition.
For her part, Caldwell's company was doing well. But it was also at a point where more brand clients had to be won to improve profitability and maintain the list of around 30 lawyers. The client also had to commit himself to volunteer work.
Boies, a prize-winning litigator who works seven days a week, was made famous by having Bill Gates act as special advisor to the U.S. Department of Justice in his antitrust action against Microsoft Corp. curled under oath and took the lead The Supreme Court of the Democrats drives against Gore in Bush.
The reflective Caldwell had built a more informal shop in Southern California with an ethos of supportive personal relationships and a commitment to a balanced life.
Could a marriage between companies that come from such different personalities work?
"I thought it was a strange game," said a longtime law firm manager.
Nevertheless, the partners of Caldwell and Boies, who were looking for a union, exchanged their vows.
"I think both we and the Caldwell Leslie people believed that there would be a cultural shift," Boies said in a recent interview.
However, the differences turned out to be too profound.
Just three years later, 12 Caldwell Leslie partners withdrew from their offices at 725 S. Figueroa St. to join the rival King & Spalding downtown – customers in tow. (Although Caldwell and another partner left BSF on the same day, they will later switch to King & Spalding once they have closed a case that would be a conflict for King & Spalding.)
"It was a cultural mismatch," said a contrite-sounding Boies who is not known for self-reflection. "I didn't spend much time in (Caldwell Leslie's) offices" after leaving the details to his partners.
However, critics say there is a lot more to it.
In legal circles, the dirty laundry from partner separations rarely flutters in public. But when this marriage got pissed off, Boies Schiller's management decided to voice his complaints in interviews.
The chaotic split offers a warning story to business owners in Los Angeles, considering selling to big money, big name internationals while expecting to maintain autonomy.
It's also instructive for out-of-towers looking to enter the LA market.
The separation came as no surprise to some. Nationwide, around 32 partners have left BSF for other companies in the past six months, including David Pressman, former US ambassador to the United Nations Security Council. Pressman, the lieutenant-colonel Alexander Vindman's lawyer during impeachment proceedings against President Donald Trump, left BSF's New York office on June 1 and went to Jenner & Block.
Typically, the BSF defects are attributed to frustration with poor advertising due to the role of boies in the Harvey Weinstein and Theranos scandals, and lack of transparency in governance and compensation.
People who are familiar with the company compare it to a family business in which relatives of the founders are faced with the question of why others do not. They also say that it is not always clear who is running the company.
While interviewing the Business Journal, BSF partners insisted that they work to improve transparency and governance, they said the most important lesson from their LA debacle was the need to rebuild the local office with lawyers who run the BSF – Adopt business model.
This model requires that offices accept greater central control. focus on bringing in large, complex cases; in such cases to work with lawyers from other BSF offices; and levy higher, uniform fees than Caldwell Leslie.
Nick Gravante Jr., New York Managing Partner, said BSF had spoken to some LA partners that they would be going anyway. Indeed, he ventured, the LA office could be more profitable without any defectors.
"We want first class work," said Natasha Harrison, managing partner of BSF in London. "They don't come to Boise Schiller to work in the middle class. They come to us for top jobs and complex disputes. Boies Schiller I know I'm elite and get top prices. Caldwell Leslie wasn't able to get top prices. … It was quite a challenge. "
"Caldwell Leslie," said Boies, "… (did not) have the blue chip core customers that BSF had."
David Willingham, former co-director of BSF's L.A. office, disagrees. "The statements about the partners who have left BSF to join King & Spalding are categorically wrong," he said in a statement to the Business Journal.
Some called BSF complaints red herring.
Several sources found that BSF's LA office was over his weight. Although only 8% of the law firm's 300 lawyers were accommodated, the local office accounted for between $ 40 million and $ 50 million of BSF sales of about $ 400 million in 2019, according to people who know the situation.
According to sources, BSF LA attorneys are sometimes charged at higher rates than their counterparts in New York. Companies like King & Spalding usually only consult equity partners after they have confirmed their profits by calling their customers.
Just four months before the L.A. exodus, BSF stock partners had elected Willingham to the company's Executive Committee. When he later told BSF that he was going to leave, Boies and Harrison tried to convince Willingham to stay.
Regarding BSF's claim that L.A. didn't target large enough customers and cases, sources ignore how deeply Boies itself has damaged the BSF brand through its roles in the Weinstein, Theranos, and Jeffrey Epstein scandals.
Partners in several BSF offices, including LA, were deeply concerned about the role of Boies in these matters, the potential consequences they could cost customers, and the company's lack of strategic vision, so those familiar with their thinking People.
When news of Boies' efforts came to light on behalf of Weinstein, the LA office made an all-hands call with a crisis management team to find out how to speak to customers, the people familiar with the situation .
Some companies, particularly in Hollywood, viewed BSF as toxic. Some have even withdrawn from the existing BSF business, a person with knowledge of the situation. It is expected that some customers who have refused will sign with the partners who have joined King & Spalding.
More competition ahead
While Harrison technically correctly said that Caldwell Leslie relied heavily on mid-level work, his lawyers had largely moved to larger cases and clients in the three years since joining BSF.
Gravante and Harrison insisted on reviewing BSF's compensation structure and promised greater transparency.
But Boies said BSF would send partner Joshua Schiller, son of co-founder Jonathan Schiller, to fill one of two new positions as California co-management partner, and report to Gravante and Harrison. The firm will close its longstanding satellite office in Santa Monica and move several lawyers downtown. One of them, Ed Takashima, is now the new administrative partner of L.A.
In addition, John Kucera, deputy U.S. attorney for the Central District of California and coordinator of the DOJ's High-Intensity Financial Crime Task Force in Los Angeles, will join the firm in August to focus on white collar crime.
"I'm not going to direct anything, so I can't speak to future plans," said Kucera. "But I was told that I will have a voice."
Kucera said he is interested in mass actions in class action lawsuits and represents whistleblowers who, among other things, find calculations of government work.
It remains to be seen whether BSF's new LA plans will lead to successful recruitment and retention of the top partners required to achieve their goals.
"While I hope that they will be successful," said a long-time managing partner of the law firm, "top-class lawyers in Los Angeles need not be in a situation where they are heavily administered." someone far away. "
A senior veteran of the L.A. legal community said, "Very successful lawyers with a significant reputation in LA will never agree to be centrally managed from New York or London. … I think the lack of flexibility will be a killer. "
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