NEWSMAKER-Superlawyer Boies fights for corporations in peril
By Philip Klein
NEW YORK, June 21 (Reuters) - Corporate America, reeling from scandals that top executives misled investors and used company cash as their personal piggy banks, is turning to the same lawyer Al Gore hoped would stave off defeat in the last presidential election.
It's business as usual for David Boies, 61. The attorney has been at the center of the biggest legal fights of the last quarter century, including arguing "hanging chads" should count as Gore votes, grilling software billionaire Bill Gates in the Microsoft anti-trust trial, and nailing former junk bond king Michael Milken.
The omnipresent lawyer recently has been hired by companies Adelphia Communications Corp.<ADELA.PK> and Tyco International Ltd.<TYC.N>, as both struggle to overcome regulatory and criminal probes into charges of corporate malfeasance.
"In troubled times a company wants to turn to someone who has a reputation for thoroughness and integrity, and he has a reputation for that," said Charles Elson, director of the University of Delaware Center for Corporate Governance.
Boies' firm, Boies, Schiller & Flexner LLP, also is representing Qwest Communications International Inc.<Q.N>, the cash-squeezed local telephone company that is being investigated by the Securities and Exchange Commission (SEC) for possible accounting errors.
Boies, who has been known to appear in court wearing sneakers and poorly fitting suits, has a knack for explaining complex issues in plain English, said Steven Edwards, an attorney at Hogan & Hartson LLP. That's precisely what makes Boies one of the most sought after corporate attorneys.
After decades of involvement in big cases -- including aiding the U.S. Justice Department in its antitrust case against Microsoft -- Boies has enormous credibility among boards of directors, regulators and shareholders. As his stature has risen, so have his fees: he now charges over $700 an hour, according to news reports.
Boies has such a full plate, it seems impossible he can give any client the necessary attention, critics say. Then again, Boies 5-year-old law firm now employs 100 lawyers in five U.S. cities.
"Obviously, clients think it's worth it to get whatever time he can spend," Edwards said.
SCANDALS
Boies, who suffers from dyslexia, was selected by Time magazine as a runner-up to President George W. Bush for "Person of the Year" in 2000. He was born in Illinois and went to law school at Northwestern University outside Chicago.
He is no stranger to scandal. According to Time, he was forced to leave Northwestern after an affair with a professor's wife. Boies got his law degree from Yale University instead, and married the professor's wife. He is now on his third marriage.
In April, Boies agreed to settle with two women lawyers who filed a discrimination suit against him and his firm that claimed the firm paid women attorneys less and refused to consider them for partnership.
Tyco, reeling from allegations its former chief dodged state taxes on expensive art buys, and Adelphia hired Boies to conduct internal investigations into possible wrongdoing by corporate executives. These reviews parallel probes launched by the SEC, and in Tyco's case, by New York state prosecutors as well.
"You're not exactly dealing with shrinking violets here," said Edwards, who has known Boies since they worked at Cravath, Swaine and Moore in the 1970s. "You want somebody who can say: 'You better cooperate or you're out of here.'"
Within a week of hiring Boies, Tyco ousted its top lawyer who had been with the company since 1998, saying he was not cooperating with Boies' investigation. Tyco on Monday sued the lawyer and a former outside director, claiming the executives abused company loans.
OMNIPRESENT
Boies also has worked the other side of the fence -- representing Enron's former Chief Financial Officer Andrew Fastow, after Fastow's two-week disappearance during a congressional investigation.
Boies keeps a tight lid on his clients. He forbade Fastow from talking to reporters at a packed press conference at Boies' New York office. After reporters pleaded, Boies allowed his client to say, "Hello. Happy holiday season. Thank you for coming."
The wide array of cases Boies has handled over more than 25 years almost always have a lot at stake and broader legal implications, a long-time colleague said.
In addition to his work for the government in the Microsoft Corp. <MSFT.O> case and for Gore in the disputed election, Boies defended IBM against an antitrust suit and defended CBS News in a libel suit brought by U.S. Army General William Westmoreland. He helped the government recover investor losses from Milken and defended Internet song-swap service Napster in a copyright case.
He currently represents the Yankees Entertainment and Sports Network in its suit against Cablevision Systems Corp. and London insurers contesting an attempt by World Trade Center leaseholder Larry Silverstein to collect two claims for the Sept. 11 attacks.
"The pattern you see is David's involvement in what's among the most important and most challenging problems to deal with at a given time," said Robert Silver, who has worked with Boies for 22 years. "That's what he likes because he enjoys, I think, the challenge of the unknown, the difficult, the complicated -- finding what is simple in the complicated."
06/21/02 12:53 ET |
