The leadership crisis roiling the National Basketball Players Association pulled in another Am Law 100 firm Thursday when the union hired Orrick, Herrington & Sutcliffe.
Orrick enters the fray on the heels of an investigation by Paul, Weiss, Rifkind, Wharton & Garrison that resulted in NBPA executive director G. William Hunter being placed on an indefinite paid leave amid accusations that his stewardship of the union was marked by nepotism and mismanagement.
The NBPA’s interim executive committee and advisory committee have retained Orrick commercial litigation partner Christina Sarchio and employment litigation partner Lynne Hermle to advise the union on legal and business matters related to the Paul Weiss probe, which was launched in April 2012 after the U.S. attorney’s office in Manhattan and the U.S. Department of Labor issued subpoenas to the NBPA.
An Orrick spokeswoman said in a statement sent to The Am Law Daily that Sarchio and Hermle are leading a team of lawyers from the firm encompassing several practice areas that is advising the New York–based NBPA on various potential reforms. The firm declined to comment further about its work for the union.
Hermle, a noted Silicon Valley–based employment litigator who famously once made an opposing attorney throw up repeatedly by winning a series of pretrial motions, has been representing Kleiner Perkins Caulfield & Byers in a high-profile sex discrimination suit filed against the venture capital firm last year by investment partner Ellen Pao, a former Cravath, Swaine & Moore associate. (Hermle and San Francisco–based Kleiner Perkins are seeking to move Pao’s suit to arbitration, according to a report by sibling publication The Recorder.)
In an interview with The New York Times published Thursday, Hunter and his attorney, Newark-based criminal defense lawyer Thomas Ashley, pledged to exercise all their options to enforce the contract extension Hunter signed in 2010 under which he is to be paid $10.5 million through 2016. (Labor Department filings by the NBPA show that Hunter was paid nearly $3.2 million for his services in the period between July 1, 2011, and June 30, 2012.)
Fulfilling that vow could prove difficult, however, given that the 469-page Paul Weiss report indicates that the extension is not binding because the union never officially approved it. Indeed, three sources familiar with the ongoing union machinations told The Am Law Daily Thursday that the end of Hunter’s tenure with the organization he began leading in 1996 may well be at hand. NBA players are scheduled to meet and discuss his fate during NBA All-Star Weekend, which is set to take place in Houston from February 15–17.
The Am Law Daily reported last month that the Paul Weiss probe had absolved Hunter, a former federal prosecutor, of illegal activity. But the firm’s report also raised serious questions about such matters as $1.3 million in payments Hunter received for unused vacation time and his hiring of outside firms for NBPA business that employed some of his relatives, both of which cast doubt on Hunter’s ability to continue leading the union.
Even before the latest controversy erupted, Hunter had already clashed with NBPA president Derek Fisher during the five-month NBA lockout brought on by contentious collective bargaining negotiations with league management. The lockout ended in November 2011, but not before players held a meeting with DeMaurice Smith, a former partner at Latham & Watkins and Patton Boggs who now serves as executive director of the National Football League Players Association.
At the time, Smith was fresh off his own labor impasse, with NFL players and owners having reached a new collective bargaining deal of their own in late July 2011 to end a nearly five-month lockout. Smith’s former firms, Latham and Patton Boggs, served as key legal advisers to the NFLPA during that process, reaping roughly $4 million collectively in fees during the period between March 1, 2010, and February 28, 2011, according to our previous reports.
Orrick’s Sarchio, who is based out of New York and Washington, D.C., joined the firm in August 2012 from Patton Boggs, where she was cochair of the government investigations and litigation practice. Sarchio, a former assistant district attorney in Manhattan, told sibling publication The Blog of Legal Times that Orrick’s litigation practice and global footprint enticed her to leave Patton Boggs, a firm she joined in December 2008 from now-defunct Howrey.
At Patton Boggs, Sarchio was part of a team of lawyers from the firm that once represented disgraced financier R. Allen Stanford. (In our reporting on that case, we once noted that Sarchio’s profile on Patton Boggs’s website described her as, "charming in person, deadly in the courtroom.")
Sarchio’s other clients have included the NFLPA, which Smith, her former Patton Boggs colleague, has headed since 2009. Smith has since staffed the Washington, D.C.–based NFLPA with several Patton Boggs alums, including former partner Ira Fishman and ex-associates Heather McPhee and Ahmad Nassar.
Federal tax filings by the NFLPA for fiscal year 2011 show that Smith received about $2.5 million in compensation as executive director, while Fishman was paid $682,658 in his role as managing director of the union. McPhee was paid $337,202 in her position as associate general counsel. Nassar took home $287,324 in his job as vice president of business and legal affairs for the union, according to a Labor Department filing.
In the aftermath of last year’s NBA lockout, union president Fisher sought to hire Patton Boggs for a review of its business practices under Hunter. The move immediately drew the executive director’s ire and set off a battle for control of the NBPA, according to our previous reports.
Sarchio was the lead Patton Boggs partner tapped to handle that review for the union. Asked about her retention at the time, she cited her previous experience advising the NFLPA. The assignment was shelved once the NBPA’s executive committee hired Paul Weiss to conduct its own internal investigation. Sarchio, who did not respond Thursday to a request for comment, subsequently moved to Orrick.
The union’s decision to hire Orrick and Sarchio has clearly rankled some in the pro-Hunter camp, one of whom remarked to The Am Law Daily on the condition of anonymity that she was "tethered to the waist" with Smith. Smith did not respond to a request for comment about his former colleague’s hiring by the NBPA.
A spokesman for Hunter and his attorney Ashley—the two men know each other from growing up as teenage sports stars in southern New Jersey—declined to comment on the matter when contacted by The Am Law Daily. (Ashley, who once represented former Newark Mayor Sharpe James on corruption charges, played basketball at Rugters University; Hunter was captain of the football team at Syracuse University.)
The latest legal developments follow the NBPA’s appointment earlier this week of former Weil, Gotshal & Manges associate and longtime union deputy general counsel Ronald Klempner as acting executive director during Hunter’s paid leave of absence.
Should the union’s rank and file move to elect a new leader during All-Star Weekend—current National Hockey League Players Association head Donald Fehr and acting ATF director B. Todd Jones, who is also U.S. attorney for the District of Minnesota, have been mentioned as potential replacements for Hunter—it could lead to other changes at the NBPA.
The union has already moved to terminate relatives of Hunter’s hired for in-house jobs—such as attorney and director of special events and partnerships Megan Natsuko Inaba and director of player benefits and services Robyn Hunter—amid pressure from players and agents pushing for change at the NBPA.
A new executive director is likely to play a role in determining whether Klempner and longtime union outside counsel Jeffrey Kessler of Winston & Strawn—the two lawyers once worked together at Weil—will continue to serve in their current NBPA roles.
Kessler, who has handled work for the NBPA for nearly 30 years, took a 60-lawyer team with him to Winston last year from the dissolving Dewey & LeBoeuf. He declined to comment when contacted by The Am Law Daily, as did Klempner and a spokesman for the union.
But sources say Kessler continues to handle several key matters for the NBPA, and the Paul Weiss report praised his "significant experience in antitrust law and matters involving professional sports unions," even hinting that Hunter would have been wise to listen more often to Kessler instead of deferring to firms like Howrey and Steptoe & Johnson that employed his daughter Alexis Hunter as special counsel.
When Smith took over as head of the NFLPA three years ago, some speculated that Kessler could soon find himself on the outs. And while we’ve previously reported on how Latham and Patton Boggs have encroached on some of the billable hours of Kessler and his team of sports litigators, he continues to remain a key legal adviser to NFL players on labor and antitrust matters.
Kessler is also no stranger to Orrick. While at Dewey predecessor firm Dewey Ballantine, he was a key figure in the merger talks between the two firms that ultimately collapsed in January 2007.