Law.com Home > Large Law Firm Home

Gamble Pays Off for Some Boies Schiller Associates

Some will rake in part of a big contingency fee in multibillion-dollar antitrust case

David Boies is a gambling man. His associates, not so much.

Boies, the founder of Boies, Schiller & Flexner, loves the thrill of placing bets both at the casino and on big contingency cases.

In November one of those bets paid off when Visa Inc. agreed to pay his client American Express Co. as much as $2.25 billion to settle an antitrust suit. The payday for Boies and his partners should be huge. For associates who worked on the case, however, their share of that fee depends on how each decided to roll the dice.

Compensation for Boies Schiller associates is heavily tied to their billings. Associates who work on contingency cases normally get a percentage of the fee if and when it's recovered. Boies and American Express won't reveal the details of this fee, but Boies has stated in the past that the deal was a partial contingency arrangement. One lawyer familiar with the deal says the firm got an annual retainer of roughly $5 million (the case was filed in 2004), with a sliding scale contingent fee. The firm's recovery on a $2 billion settlement is likely to be huge: A 5 percent fee, for example, would be $100 million.

The associates who worked on the American Express matter were offered a choice each year at bonus time. They could take the conservative route and have their annual bonus include the hours they devoted to this case. That way they'd be assured of getting some credit for those hours. The downside was that those hours aren't counted toward the contingency fee. One lawyer familiar with the matter says the firm offered this bonus option to appease associates worried that the case might lead nowhere.

Plan B allowed associates to roll their hours over to the next year. If the case paid off, they would receive a share of the contingency fee proportionate to those hours. Ka-ching!

So how many of the associates who worked on the mammoth case decided to roll the dice? Between a quarter and a half, according to Boies. They'll come out better financially, he says. More than a dozen associates have worked on the case since it was filed, and none would return calls or talk about their choice.

A young lawyer who placed her bets on the contingency fee could be richly rewarded. According to one former lawyer at the firm, an associate's share of such a fee is tied to hours billed. The firm takes the percentage of hours the associate contributed to the case, divides by five and applies that fraction to the fee premium. Boies confirmed that this formula is "basically right," although other factors could increase the associate's share. A hypothetical example: If an associate contributed 5 percent of the overall hours to this case and the premium fee (the amount above normal billing rates) were $100 million, the associate would get 1 percent of $100 million -- which is $1 million.

Those dice may be looking a little more attractive now.