Boies Schiller cash flow issues Forum

[Ultramar vistas]

Per AmLaw, BSF has missed a self imposed deadline to raise associate salaries to market, after pushing back the deadline several times, and “rumors are swirling” of cash flow issues.

Crazy stuff for what used to be seemingly the most solid and established “boutique” out there. I could see them recovering before, but tough to imagine any kind of successful recruiting or lateral hiring once the cash flow stuff is out there.

[Anonymous User]

Per AmLaw, BSF has missed a self imposed deadline to raise associate salaries to market, after pushing back the deadline several times, and “rumors are swirling” of cash flow issues.

Crazy stuff for what used to be seemingly the most solid and established “boutique” out there. I could see them recovering before, but tough to imagine any kind of successful recruiting or lateral hiring once the cash flow stuff is out there.

A few insiders I know (which is why I'm posting anon) have said some of this reporting is inaccurate or exaggerated. Still, I agree it will be tough for them to be able to recruit the kinds of top-flight recent graduates/clerks/junior associates that they could in the past, or compete with other top litigation boutiques for that kind of young talent.

At the higher end (more senior partners), I think this will affect them less (though maybe still some) because they would presumably have a clearer window into BSF's actual finances when they negotiate their partnerships.

[Anonymous User]

Per AmLaw, BSF has missed a self imposed deadline to raise associate salaries to market, after pushing back the deadline several times, and “rumors are swirling” of cash flow issues.

Crazy stuff for what used to be seemingly the most solid and established “boutique” out there. I could see them recovering before, but tough to imagine any kind of successful recruiting or lateral hiring once the cash flow stuff is out there.

A few insiders I know (which is why I'm posting anon) have said some of this reporting is inaccurate or exaggerated. Still, I agree it will be tough for them to be able to recruit the kinds of top-flight recent graduates/clerks/junior associates that they could in the past, or compete with other top litigation boutiques for that kind of young talent.

At the higher end (more senior partners), I think this will affect them less (though maybe still some) because they would presumably have a clearer window into BSF's actual finances when they negotiate their partnerships.

Posting anon because I go to Columbia and we are not supposed to give out schedule information. Boies is not recruiting at EIP this year. They used to interview 20-30 students here a year. Just a 2L, but does not seem to indicate anything good.

[Anonymous User]

Anon because I have direct info.

This was an accounting error that affected a limited subset of associates. The AmLaw article is incorrect/misleading.

[Anonymous User]

Anon because I have direct info.

This was an accounting error that affected a limited subset of associates. The AmLaw article is incorrect/misleading.

Given that you have direct info, do you also have an explanation for the apparent cutbacks (to 0) in recruiting from T6 schools?

[Anonymous User]

Anon because I have direct info.

This was an accounting error that affected a limited subset of associates. The AmLaw article is incorrect/misleading.

Given that you have direct info, do you also have an explanation for the apparent cutbacks (to 0) in recruiting from T6 schools?

I have no insight into recruiting this year.

[10b5-1]

Anon because I have direct info.

This was an accounting error that affected a limited subset of associates. The AmLaw article is incorrect/misleading.

The American Lawyer has pretty decent journalistic ethics and a good reputation - find it hard to believe that they would not have given BSF the ability to comment before publishing (standard journo practice), in which case this would all have been cleared up immediately.

I guess we will see if The American Lawyer retracts or takes down its post; that'll be the tell.

[Anonymous User]

Anon because I have direct info.

This was an accounting error that affected a limited subset of associates. The AmLaw article is incorrect/misleading.

Given that you have direct info, do you also have an explanation for the apparent cutbacks (to 0) in recruiting from T6 schools?

I have no insight into recruiting this year.

So you have definitive info on a trivial matter that implicates a systemic problem but no info at all on a major matter that signals the exact same systemic issue? Even if the missed deadline itself does not indicate cash flow issues, do you disagree that other indicia point squarely at major issues at the firm?

[Anonymous User]

Anon because I have direct info.

This was an accounting error that affected a limited subset of associates. The AmLaw article is incorrect/misleading.

Given that you have direct info, do you also have an explanation for the apparent cutbacks (to 0) in recruiting from T6 schools?

I have no insight into recruiting this year.

So you have definitive info on a trivial matter that implicates a systemic problem but no info at all on a major matter that signals the exact same systemic issue? Even if the missed deadline itself does not indicate cash flow issues, do you disagree that other indicia point squarely at major issues at the firm?

I happen to know someone whose paycheck was affected. That's why I know what the issue was.

[Anonymous User]

I mean, they had that huge batch of defections earlier this year right?

[Joachim2017]

I mean, they had that huge batch of defections earlier this year right?

Yes but you would think those departures would allow the firm to pay its associates their correct salary, or even match the market raises or fall bonuses or whatever, because they don't have to worry about much larger distributions to partners (who the firm said were not actually bringing in that much business relative to what it seemed in the press).

Instead it seems like the firm's cash flow problems have gotten worse. That suggests either that, contrary to what has BSF said publicly, the defecting partners were responsible for a lot of business, or that the firm doesn't have any new business / other cash flow problems that even the departure of partners and the freeing up of distributions to them has not been able to solve.

[ChairmanKaga]

I'm willing to believe the anon's claim that the associate comp issue is an "accounting error that affected a limited subset of associates", although AmLaw really messed up if it published an article about "cashflow issues" which can be explained so easily.

The concerning indicators to me remain the number and especially the caliber of the partners who have left and the strange PR tactics about it. At first, while there were only a half dozen departures, the new management repeatedly implied that the departing partners had been asked to leave. It was hard to believe at the time and in hindsight it's completely unbelievable. The numerous puff pieces about the new British MP this year didn't help the situation and came off as an effort to distract from the frequent departure articles.

Would love to hear from others with intel. For most of this year it's looked like we might be witnessing the next Bingham, but there's certainly a vocal denial of that from the firm itself.

[Anonymous User]

I wouldn't make much of the Columbia point. It seems like BSF focuses its recruitment on the schools that have high-ish rates of matriculation. A quick look on the BSF site shows there is less than five recent associates to join the firm from Columbia, so it could be reasonable to stop recruiting there. Plus, it's not like BSF recruits from all T6 schools all the time––they haven't been at Chicago's OCI in quite a few years.

[JusticeSquee]

I mean, they had that huge batch of defections earlier this year right?

Yes but you would think those departures would allow the firm to pay its associates their correct salary, or even match the market raises or fall bonuses or whatever, because they don't have to worry about much larger distributions to partners (who the firm said were not actually bringing in that much business relative to what it seemed in the press).

Instead it seems like the firm's cash flow problems have gotten worse. That suggests either that, contrary to what has BSF said publicly, the defecting partners were responsible for a lot of business, or that the firm doesn't have any new business / other cash flow problems that even the departure of partners and the freeing up of distributions to them has not been able to solve.

Yeah this has all been pretty obvious for a few months now. Rainmakers have left in droves, the firm is in rapid decline. If you're an associate there, you should start putting out feelers like yesterday.

[Anonymous User]

Anon because this information could possibly out me.

At a top end lit boutique and we have been flooded with resumes by Boies associates in the relevant market - one of NY/DC. We did interview some and all had a similar story of just saying something along the lines of “you probably have seen the press and it is just the right time to move on”. One was pretty forthcoming about the situation and my understanding is that the health of the firm is not great. I mean we have seen literally a resume for almost every associate in that office over the past 2 months. Take that for what you will.

[Anonymous User]

Anon because this information could possibly out me.

At a top end lit boutique and we have been flooded with resumes by Boies associates in the relevant market - one of NY/DC. We did interview some and all had a similar story of just saying something along the lines of “you probably have seen the press and it is just the right time to move on”. One was pretty forthcoming about the situation and my understanding is that the health of the firm is not great. I mean we have seen literally a resume for almost every associate in that office over the past 2 months. Take that for what you will.

This seems sussy as I'm also at a "top end lit boutique" (above NYC market comp), and at least as a junior associate, I have no knowledge at all of the resumes that get sent to us, with the exception of any particular individuals I'm interviewing (which is obviously heavily distilled from the much larger pool of applications, and I rarely interview). I guess boutiques operate differently but it seems strange that an associate would have such a strong finger on the pulse of applicants to the firm.

[Anonymous User]

Anon because this information could possibly out me.

At a top end lit boutique and we have been flooded with resumes by Boies associates in the relevant market - one of NY/DC. We did interview some and all had a similar story of just saying something along the lines of “you probably have seen the press and it is just the right time to move on”. One was pretty forthcoming about the situation and my understanding is that the health of the firm is not great. I mean we have seen literally a resume for almost every associate in that office over the past 2 months. Take that for what you will.

This seems sussy as I'm also at a "top end lit boutique" (above NYC market comp), and at least as a junior associate, I have no knowledge at all of the resumes that get sent to us, with the exception of any particular individuals I'm interviewing (which is obviously heavily distilled from the much larger pool of applications, and I rarely interview). I guess boutiques operate differently but it seems strange that an associate would have such a strong finger on the pulse of applicants to the firm.

Anon you quoted. I’m on the hiring committee, so I don’t see how would any of this information be suspect.

[Anonymous User]

Anon because this information could possibly out me.

At a top end lit boutique and we have been flooded with resumes by Boies associates in the relevant market - one of NY/DC. We did interview some and all had a similar story of just saying something along the lines of “you probably have seen the press and it is just the right time to move on”. One was pretty forthcoming about the situation and my understanding is that the health of the firm is not great. I mean we have seen literally a resume for almost every associate in that office over the past 2 months. Take that for what you will.

This seems sussy as I'm also at a "top end lit boutique" (above NYC market comp), and at least as a junior associate, I have no knowledge at all of the resumes that get sent to us, with the exception of any particular individuals I'm interviewing (which is obviously heavily distilled from the much larger pool of applications, and I rarely interview). I guess boutiques operate differently but it seems strange that an associate would have such a strong finger on the pulse of applicants to the firm.

Anon you quoted. I’m on the hiring committee, so I don’t see how would any of this information be suspect.

Yes, for top-end litigation boutiques that is not unusual. At the ones with which I have first-hand experience, current associates were very involved in the interview process for new associates, and at some firms, they even have a direct say in the ultimate decision.

Based on firsthand knowledge, I know some BSF associates are applying widely (I assume the anon who is talking about this is located in DC, the smaller market with slower business, but it would not be shocking for this to apply in NYC as well. The post-bonus period in Dec/Jan will be make-or-break for BSF, as that is when I assume the associates we're talking about will actually take the plunge and leave if they want to.

[Joachim2017]

ATL has an update on this from the firm:

https://abovethelaw.com/2020/11/boies-s ... erialized/

The firm says only a handful of associates were affected by this accounting glitch. Whether there are deeper cash flow problems at Boies...remains to be seen...

[Anonymous User]

Anon because this information could possibly out me.

At a top end lit boutique and we have been flooded with resumes by Boies associates in the relevant market - one of NY/DC. We did interview some and all had a similar story of just saying something along the lines of “you probably have seen the press and it is just the right time to move on”. One was pretty forthcoming about the situation and my understanding is that the health of the firm is not great. I mean we have seen literally a resume for almost every associate in that office over the past 2 months. Take that for what you will.

I will also add (different anon from the quoted; anon because personal info + connections) that, based on first-hand knowledge of associates at one of BSF's biggest offices, the firm just does not have enough work to go around to keep all current associates busy.

Some of their superstar associates or associates with ties to partners who bring in work are busy, but as a whole the firm is not. So there is a sense that, with a new crop of associates coming in soon, management will not exactly be sorry to see current people leave. They may not actively push them out, but there are other ways to make that sentiment felt...

[Anonymous User]

They are now trying to sublease part of their new office space in NYC, things not looking good.