Robert Joffe is a litigator, not a transactions man. But during Fannie Mae’s and Merrill Lynch’s darkest weekends last September, it was this 41-year Cravath veteran who advised their boards’ independent directors.
Board work is usually seen as a low-stress gig, requiring little more than appearances at regularly scheduled meetings. In fact, that’s why Joffe got involved with it, after being elected Cravath’s presiding partner in 1999. (He left that position in 2006.) “The board work was at first more easily planned for,” Joffe says. “Of course, in the last year, regular schedules have gone out the window.”
Still, the work has never been a cakewalk. Joffe advised independent directors of the Federal National Mortgage Association (Fannie Mae) during its accounting scandal in 2004, and first worked for General Motors Corporation’s independent directors in 2006. Merrill Lynch & Co., Inc.’s directors hired Joffe in October 2007 when then-chairman Stanley O’Neal pitched a merger with Wachovia Corporation. The board opposed the merger, and O’Neal retired.
When last fall’s credit crisis hit, those boards again called Joffe. Stephen Ashley, then chairman of Fannie Mae’s board, says that Joffe is “as good as anybody I’ve encountered in taking complex issues, sorting them out, and giving very understandable and thorough road maps for boards to follow and discuss in making the decisions.”
Joffe was in the room when Treasury secretary Henry Paulson told Fannie Mae that the government would take the company into conservatorship. The following Friday, Joffe took off for the Berkshires to recover. The next day he got a call from a Merrill director about the possible sale of Merrill to Bank of America Corporation. (Joffe had represented Paulson, then a New York Stock Exchange board member, during a state probe into compensation for former NYSE chairman Richard Grasso. “I didn’t get any favors from him, nor did Fannie Mae,” Joffe says with a chuckle.)
“It’s fair to say that for the foreseeable future more and more boards will want their own advice,” Joffe says. He now is making regular trips to Detroit to advise GM’s independent directors; it’s work that he says “has consumed a lot of partner and associate time over the last six months.” In November, Citigroup Inc.’s independent directors retained Joffe to advise them on the government’s $306 billion in guarantees to the company. And on March 3, Joffe represented compensation committee chair John Finnegan in the New York State attorney general’s probe into Merrill’s bonuses. (Cravath partner Eric Hilfers advised Merrill’s compensation committee on bonus issues at a meeting on December 8.) It seems that board work’s reputation for predictability just might be the next victim of the economic crisis.
See all of our 25 Dealmakers of the Year from the April 2009 issue of The American Lawyer.