I’m no specialist on legal ethics, and I’m not going to
pretend to start now, but I have a different reason for recapping
this. This being the story of Boies-Schiller’s recommending
that big-time clients including Adelphia, Tyco, Qwest, and
half a dozen others, use a document management firm called
Amici LLC which was founded by a former colleague of David
Boies (who, colorfully, pled guilty in 1997 to four felony
counts of overbilling the federal government and served 33
months in prison), and which was indirectly owned in part
by several of Boies’ relatives including three of his children—with
no disclosure of the relationship.
With respect to ethics, I’ll let my former Stanford law
professor Deborah Rhode pronounce the verdict: "It’s
certainly an appearance of impropriety."
With respect to economics? All told, it looks
as though the clients spent $5-$10-million apiece with Amici,
and, although there are the usual protestations that the
fees were fair, indeed approved by the bankruptcy court in
the case of Adelphia, all Boies-Schiller could come up with
when word broke yesterday in The
Wall Street Journal was lamely saying the
nondisclosure was "inadvertent." Upshot: Boies-Schiller
has resigned its representation at Adelphia’s request and,
while Tyco and Qwest aren’t commenting yet, don’t be surprised
to see them follow suit.
Today Boies is quoted in damage-control mode as saying
“I should have made certain that everyone
knew about it,” but the real blow is not just the loss of Adelphia
et al. as clients in the short run, but rather to his
reputation for holding himself and his firm out as corporate
governance champions. Caesar’s
Wife, anyone?
Simply another example of "What was he
thinking?" That, to be sure, but I recount this
for another reason. Boies’ choice not to disclose—and
anyone of his intellect and rigor made, at some point, that
conscious choice—reveals a hubris that those at the
top of their game can fall victim to. At the very least,
he acted with "vast carelessness," in F. Scott
Fitzgerald’s felicitous phrase (referring to the very rich).
But of course, neither you nor I would let power or wealth
lead us astray from our principles, would we?
