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  The Thorn in Microsoft's Side

By David Segal
Washington Post Staff Writer
Monday, October 19, 1998; Page F12

Everybody hates losing, but nobody hates losing like super-litigator David Boies.

"It's a matter of priorities," said Boies, slicing into a slab of medium-rare steak. "Do you want to win, or would you like to sleep? Do you want to win, or would you like to take a day off?"

Last week, Boies wanted to sleep. After chatting cheerfully with a reporter for an hour at the Capitol Grill, he finished his meal and excused himself. Then he walked to a nearby booth, curled up on the leather upholstery and took a nap. A couple of worried waiters soon hovered nearby.

"He'll be fine," explained Jonathan Schiller, Boies's partner.

He'd better be. Today, Boies will lead the government's side in its splashiest lawsuit in years: the Justice Department's antitrust case against Microsoft Corp. The trial will spotlight Boies's folksy delivery and gift for improvisation -- not to mention his odd habit of strapping his wristwatch to the outside of his sleeve.

But pursuing Microsoft is just a half-time gig for Boies. Thirteen months ago, he opened a boutique litigation firm with Schiller, a longtime friend and D.C. lawyer. Since then, Boies & Schiller has tripled in size to 34 lawyers and consumed the bulk of Boies's waking hours, typically billed at $550 apiece. The result has been a grueling series of all-nighters, with Boies juggling Microsoft-related tasks -- he deposed Bill Gates in Redmond, Wash. -- and a full plate of private cases.

"I'd gotten five hours sleep on Thursday night, then I got up Friday morning and didn't sleep until 2 Sunday morning," he said before his catnap, smiling as though he savored exhaustion. "You've got to have the discipline to go to sleep, because if you try to do all the work in the first two weeks, you'll destroy yourself."

During a three-decade career as a corporate lawyer, Boies has litigated more than 45 highly complicated, bet-the-ranch cases. He has lost just once. In legal circles, this is an achievement as improbable as Joe DiMaggio hitting safely in 56 straight games or investor Warren Buffett whupping the Dow Jones industrial average since the 1950s.

His victories include successfully defending CBS Inc. against a $120 million libel suit brought by former Vietnam commander Gen. William Westmoreland. The case was dropped by Westmoreland before reaching a jury. Boies also helped the Resolution Trust Corp. win a $1 billion settlement against junk bond king Michael Milken and his employer, Drexal Burnham Lambert.

How does Boies win? He has a near-photographic memory and a trancelike focus on his cases, say colleagues. And though robotic in his preparation, Boies comes off as uncommonly approachable and human in court. Avoiding polysyllabic words and sporting the dowdiest jacket and tie in the room, he has an Everyman shtick that juries identify with and instinctively like. Instead of declaiming in soaring oratory, Boies seems to be keeping up half of an informal conversation. He appears disarmingly bereft of salesmanship, which turns out to be a very effective way to sell.

It helps, too, that Boies is, as one lawyer put it, an "analytical machine." Tom Goldstein, a 28-year-old associate at the firm, recalls watching Boies answer questions in an over-the-telephone deposition while simultaneously debriefing George Steinbrenner, the Yankees owner and a client, on a conference call on another phone.

"It was the most extraordinary thing I'd ever seen," Goldstein said. "I couldn't wait to tell my wife about it."

Boies's marquee value has been a boon to his new firm, but the growth of Boies & Schiller is also the result of exquisite timing. The legal market is thriving and the firm's specialty -- complex commercial litigation -- is in high demand. And because B&S is new and relatively small, it doesn't have a long list of clients, which means it's free to take whatever business comes knocking. That's in stark contrast to more established firms, which often must turn away potential clients because of conflicts of interest with current clients.

Of course, it didn't hurt that Justice asked Boies to commandeer the most talked-about antitrust case in years shortly after the firm opened.

"We didn't send out announcements when we opened," Schiller said.

A Study in Contrasts

At first glance, Boies and Schiller seem like a very odd couple. Schiller is 6 feet 5 and athletic, and his endlessly ringing cellular phone lends him a Hollywood agent's air of hurry and polish. He's partial to salads and pricey suits.

Boies seems rumpled by comparison, a triumph of function over style. Though he pockets millions a year, he favors Macy's off-the-rack suits because, as he put it, "the price performance is hugely better." He straps his watch outside his sleeve because that allows him to glance at the time without breaking his train of thought or connection to a judge or jury.

"It's got a nice, beautiful face," Boies said, showing off a low-end timepiece that would elicit snickers from his lawyer peers.

His regular meal is steak, and he orders it "plain, with no butter, no juice, no parsley, no green stuff." For dessert he likes chocolate ice cream, and he's as crestfallen as a 12-year-old when a waiter says the restaurant has none.

Both men, however, are unabashedly compulsive about business. They talk about cases with the enthusiasm and earnestness of fathers discussing their children. Both exude outsized egos and are fiercely competitive, though they warmly defer to each other. And both relish a good brawl, unlike the majority of corporate lawyers who prefer settlement negotiations to the risks of courtroom combat.

"They are both masters at trial-room advocacy," said Lou Briskman, general counsel at CBS. "I don't think they do wills or estates but if you need someone to go to court, you'd have to search far and wide to find anyone better than these two."

The pair met in 1986, defending Westinghouse Electric Corp. in a series of suits brought by the government of the Philippines. At the time, Boies was a partner at the quintessential Wall Street firm, Cravath, Swaine & Moore. Schiller was a hard-charger at Washington's Kaye Scholer Fierman Hays & Handler. The two quickly became friends.

Last year, Boies left Cravath in a dust-up with his partners over his representation of Steinbrenner. The Yankees owner had filed an antitrust suit against Major League Baseball, but Cravath was also representing Time Warner, which owns the Atlanta Braves and is among the firm's biggest clients. Cravath told Boies to drop Steinbrenner to resolve the conflict. Instead, Boies quit the firm.

Initially, Schiller asked him to join Kaye Scholer. Boies had a better idea: Let's start our own firm. With $750,000 to cover rent, salaries and equipment, they opened offices in Armonk, N.Y., and Washington, hoping to break even in 45 days. It actually took six months, in part because the firm doesn't yet have a steady flow of cash coming from clients.

"We took a significant pay cut to do this," Schiller said. "But we're not concerned about that. We're having a ball."

Part of the fun will come from filing class-action lawsuits, which are typically the domain of plaintiffs lawyers and verboten at most corporate firms. (Executives are typically wary of hiring lawyers who sue other executives.) Boies & Schiller has already filed a class-action price-fixing case against the major international bulk vitamin manufacturers.

"We like these cases because we get to be the aggressor," said partner William Isaacson.

Better yet, these cases often make people very rich, very fast.

Meanwhile, there's plenty of defense work. The firm is involved in litigation in 10 states plus the District, and it's engaged in arbitrations in Paris, London, Singapore and Vienna. Clients include Unisys Corp., Northrop Grumman Corp., Raytheon Co. and CBS.

Then there's comedian Garry Shandling, whom Schiller is representing in a $100 million breach of contract suit against the comedian's former agent, Brad Grey. Shandling heard about Schiller through entertainment lawyers in Los Angeles after asking for a born litigator who didn't have Hollywood connections. Boies also represented radio commentator Don Imus in a now-dismissed libel suit filed by a New York judge.

To build its staff, the firm has cherry-picked attorneys from established rivals, including Cravath and Jones Day Reavis & Pogue's Washington office. That is where Schiller found Goldstein, an aspiring Supreme Court attorney, who said that Boies & Schiller has handed him a level of responsibility that no other firm with comparable clients would even consider.

"They gave me a massive piece of a $100 million litigation," Goldstein said, referring to a case filed on behalf of Worldspan, a computer reservation company seeking $175 million from a former partner and a rival in a fraud and breach of contract suit. The opposing side has 24 lawyers on the case. Boies & Schiller has fielded just four.

"It's a totally different approach," Goldstein said. "Boies has always believed in smaller, more devoted teams. There is no division of labor. Every lawyer on the case can do everything in the case."

During a recent visit to the firm's D.C. office near Friendship Heights there isn't a tie in sight. The furniture has a modern, L.A. feel, with granite desks and a wall of bright polished copper behind the receptionist's station.

Aside from Schiller, the other partner in the office is Isaacson, a long-haired 38-year-old. Todd Thomas, a 33-year-old associate recently lured from Kaye Scholer, is toiling on a handful of international arbitrations and recalling that he worked a fraction of the hours at his former firm.

"It's by necessity," Thomas said, expressing disappointment that a reporter wasn't a new associate showing up for work. "I've got a bunch of cases here that I could have handed you."

Recruiting an Old Adversary

Before the Microsoft matter, Justice's antitrust chief, Joel I. Klein, had never worked with Boies, though he knew him by reputation. Boies had led IBM Corp.'s triumphant 12-year war of attrition with the Justice Department, which in 1969 accused the computer giant of antitrust violations that echo the government's allegations against Microsoft. The Reagan administration dropped the case in 1981 after deciding that it wasn't worth fighting. So who better to champion Justice's cause this time than the guy who wore them down in the last big brawl?

"It seemed like an obvious choice," said Klein, who hired Boies last December.

Years ago, Klein had worked with Schiller when the pair were the first associates hired at now-defunct Ragovin, Stern and Huge. So Klein called Schiller and asked if he could spare his new law partner for the Microsoft matter. Schiller said yes and Klein called up Boies, who promptly agreed to work at half price -- $275 an hour -- for the challenge, and the notoriety.

Not all of Justice's attorneys were thrilled by the news. In the early 1990s, outside hotshots had been hired temporarily by the department, with less than stellar results. Moreover, a team of government attorneys had been investigating Microsoft for months, and inevitably some chafed at the sudden arrival of a newcomer. Boies's reputation for inhuman hours filled some of his new colleagues with dread.

Those tensions, however, quickly dissipated. Justice Department lawyers like to win nearly as much as Boies does, and they realized that their odds of victory were greater with him on their squad.

"When you go through lengthy litigation you have some good days and some bad days, and some people find that very draining and debilitating," Klein said. "Boies is just the opposite. He's got a forward-moving enthusiasm that never has the feeling of being manic."

For the past 90 days, Boies has neither watched television nor seen a movie, and more recently he stopped reading newspapers. Aside from the occasional article handed to him by colleagues, he has been in a self-imposed news and information blackout.

"Most people are balancing 10 or 20 priorities. I have two. My family and my work," Boies said.

Recently, Boies has been vacuuming up information about the software industry. Though he doesn't even use a word processor -- he writes in longhand or dictates -- and doesn't care for Web surfing, he has absorbed reams of data about high-tech business. He'll remember nearly all of it in court. Boies's recall is so good that associates often avoid speaking to him before trials for fear they'll say something factually incorrect, which Boies will remember verbatim.

"I tell people not to discuss anything with David unless they're absolutely sure that they know what they're talking about, because he could end up repeating it in open court." Schiller said.

Throughout the Microsoft suit, Boies said, he'll stick with the same playbook he has used in court for years: find a few key issues and hammer them home.

"In a short trial you can fool people. You can sometimes fool juries and you can sometimes fool judges," Boies said. "But in a long trial like this one, you need to find ground that you can fight and stand on regardless of how much the other side knows."

Boies wouldn't offer many details about the ground he'll be fighting from when he begins opening arguments today. But as ever, he's boundlessly optimistic about his odds of winning yet again.

"I know this much. We're outworking the Microsoft team," Boies said.

How do you know that?

"They look more rested."

A Who's Who of Clients

Don Imus: Boies represented the radio commentator in a libel suit brought by a New York judge. The case was dismissed.

Garry Shandling: Schiller represents the comedian in a breach of contract suit against his manager. Pending.

George Steinbrenner: Boies represented the Yankees owner in an antitrust suit against Major League Baseball. Steinbrenner alleged that the league was illegally conspiring to interfere with his team's 10-year, $95 million licensing agreement with Adidas. Steinbrenner prevailed in an out-of-court settlement.

Jonathan Schiller

Age: 51

Born and raised: Washington, D.C.

Education: Bachelor's degree from Columbia University, law degree from Columbia Law School.

Personal: Three children, ages 15, 18 and 20.

Hobbies: Tennis, reading books, attending the ballet.

Favorite cause: Washington Tennis Foundation, which helps at-risk youth by providing tennis and academic support.

Parents: Father is a lawyer, mother is a lawyer and psychologist.

Major win in court: $100 million jury verdict in class-action case against AT&T for shareholders of Charisma Communications Corp., a now defunct cellular phone company.

Big loss: "I haven't had a major loss in a federal or state court proceeding. I've lost one arbitration out of 40 or 50."

David Boies

Age: 57

Born: Sycamore, Ill., a small farming community.

Raised: Orange County, Calif.; father was a high school history teacher.

Education: Bachelor's degree from University of Redlands, Calif. 1964; law degree from Yale.

Personal: Married three times; six children, ages 13 to 39.

Hobbies: Television (especially "Star Trek" reruns), playing craps, tennis.

Major win in court: Represented the Federal Deposit Insurance Corp. in its insider trading litigation, which ended with junk bond king Michael Milken paying a $1.1 billion settlement.

Big loss: Represented Continental Airlines in an unsuccessful predatory pricing suit against American Airlines in 1993.

© Copyright 1998 The Washington Post Company

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