• Legal powerhouse Boies Schiller Flexner has experienced a rapid exodus of several top attorneys, many of whom were bothered by purported decisions by the firm's founders.
• Employees have been concerned about issues ranging from alleged nepotism to the unsavory reputation of some high-profile clients, including disgraced movie mogul and convicted rapist Harvey Weinstein.
• Employees, for instance, took issue with the way its leaders dealt with one of Jonathan Schiller's sons, a lawyer at the firm, after he purportedly used racist and homophobic terms at a party thrown by another of the firm's lawyers.

One of America's most prominent law firms is struggling to hold on to talent.

Legal powerhouse Boies Schiller Flexner has experienced a rapid exodus of several top attorneys, many of whom were bothered by purported decisions by the firm's founders.

This article is based on interviews with more than a half-dozen people with direct knowledge of various issues at the firm, from alleged nepotism to the unsavory reputation of some high-profile clients. These people declined to be named in order to avoid possible retribution from the firm.

The firm's founders are David Boies and Jonathan Schiller, who have been key players in major political and corporate cases for decades.

Boies is known for representing the U.S. government in its landmark 2001 antitrust case against Microsoft and for helping win a decision that overturned California's ban on gay marriage. Schiller has represented Goldman Sachs and the New York Yankees, among other major corporations and entities.

But attorneys who left have described their dissatisfaction with Boies for working with Harvey Weinstein, the disgraced Hollywood mogul who has been convicted of rape, and accused fraudster Elizabeth Holmes and her discredited blood-testing firm Theranos.

They have also alleged that Schiller's own family members received preferential treatment, both inside the firm and out. Employees, for instance, took issue with the way the founders dealt with one of Jonathan Schiller's sons, a lawyer at the firm, after he purportedly used racist and homophobic terms at a party thrown by another of the firm's lawyers.

Many people argued that Boies and Schiller sometimes overruled the firm's management committee, which had been trying to formulate a succession plan for when the founders eventually leave their roles. Former leaders at the firm would privately claim that they were not always presented specific details about the firm's finances, people familiar with the matter said.

"They keep naming new people as managing partners, but the reason people are leaving is it [the firm] is just a name," a former Boies Schiller partner told CNBC. "There's no transition going on, and David and Jon are deciding everything."

After reaching out to the firm's public relations team, CNBC spoke with Matt Schwartz, who is one of the new co-managing partners at the firm along with Sigrid McCawley and Alan Vickery. Schwartz is not related to this reporter.

During the nearly hourlong conversation, Schwartz denied that Boies and Schiller are making all the decisions. He said the leaders of the firm are always given specifics about the firm's financial deals, including with outside vendors. He also insisted that he and other co-managing partners oversee day-to-day operations.

"David and Jonathan are on the executive committee. Of course they are part of those discussions," Schwartz told CNBC on Friday. "They hold the titles of managing partners and are an important resource for us. But truly and honestly in every way the four new managing partners of Natasha [Harrison], Sigrid, Alan and myself run the day-to-day operations at this firm and we do so under the guidance and oversight of the executive committee. Whoever is telling you that the founding partners are running everything is wrong."

"The short answer is if I want to know how much money we are paying for any particular vendor or item, yes, that is something that is knowable," Schwartz added.

Scores of departures

At the end of 2020, Boies Schiller Flexner employed around 200 lawyers. Previously it employed just over 300. It boasts a high-powered client list including Facebook, American Express, Chevron, Delta, Barclays, Oracle and Sony. The firm, founded in 1997, has offices in New York, Miami, Washington, D.C., San Francisco, Los Angeles and London.

But the firm has experienced a brain drain in recent months: Nearly 60 partners left last year, according to Bloomberg. Some of the organization's top clients followed their attorneys who left. Two of the recent departures reportedly represented Apple, Facebook, Oracle and Elon Musk's Solar City Corp.

Additional corporate clients of the firm include Delta, UnitedHealthcare, John Hancock, Lincoln National, Carnival, NextEra and Burger King.

Boies himself said in a previous interview with lawyer and legal commentator David Lat that "some of the partners who have left the firm in the past did so because they were disappointed with leadership choices or because they had a different vision for the future of the firm." He didn't give further details.

Nick Gravante, a managing partner, left the firm last year. Gravante and other top attorneys, such as Karen Dunn and Damien Marshall, were part of the management committee that, according to Law360.com, was meant to "assume day to day responsibilities of operations as part of a long term plan to transfer leadership of the litigation firm from its founder to the next generation."

Dunn and William Isaacson, who was a vice chair at Boies Schiller, left last year to join the firm Paul, Weiss.

A leader steps back

Another leader might soon be out the door: Harrison, who recently stepped down as deputy chair. Boies once said Harrison, who is based in London and is also a managing partner, was in line to be his successor. People familiar with the situation said Harrison could now end up leaving Boies Schiller.

Harrison told CNBC in a statement that she has not been in touch with other firms but notably did not say in her comment whether she had any future plans to leave Boies Schiller.

"I am not in discussions with any other law firms, nor do I plan to enter into discussions with any other law firms, and any suggestion to the contrary is false," Harrison said. "It is an honour to be working with the other managing partners to lead one of the world's leading litigation firms through its transition to the second generation and in this regard, we have made significant and important progress over the last twenty months."

Harrison's decision to step down from the deputy chair role was due to personal reasons and not a suggestion that there are any problems at the firm, according to a Sept. 1 internal memo reviewed by CNBC. The memo was signed by the firm's managing partners, including Harrison, Boies and Schiller.

"Most notably as it relates to the pandemic, international travel restrictions have prevented Natasha from spending the kind of time in the U.S., actively engaging with the leadership team, the Firm and our U.S.-based clients, that she feels is necessary to fulfill the obligations of the Deputy Chair position," the memo said.

Schwartz confirmed that, since Harrison is no longer deputy chair, she will not be in line to succeed Boies as chair of the firm.

"Now that is not going to happen. That's the significance of Natasha stepping down as deputy chair. It's really a signifier that she's not going to take over as chair," Schwartz said. He said Harrison stepped down from the post "because she couldn't make a commitment to become chair down the road."

Schwartz gave no indication that there are future plans to transition beyond the current management structure, including having Boies and Schiller continue to hold some sort of leadership positions within the firm.

"The succession planning means: How is the firm going to be run after? The firm is now run by a group of people that is much broader than the founding partners," Schwartz said. "The day to day is run exclusively by the four new managing partners, with guidance from, but not control by, the founding partners. That is the succession plan in action."

Schwartz didn't seem to think there were any plans for Boies and Schiller to step away from the firm, including possibly retiring. "No, I mean you'd have to ask them. That's a personal decision to them, not anything that we're going to try to force upon them, certainly," he said.

Taking issue with a Schiller son

Harrison was one of many Boies Schiller leaders and firm employees who were disturbed by the original domestic abuse allegations levied against Josh Schiller, a partner at the firm and the son of Jonathan Schiller, according to people familiar with the matter.

Josh Schiller was detained in a California county jail in January following a domestic violence allegation. His lawyer, at the time, said "there was no instance of domestic violence." Schiller is married to Melissa Siebel Schiller, who is a sister-in-law of California Gov. Gavin Newsom.

The firm then put Josh Schiller on a leave of absence. He returned to work earlier this year after outside investigators employed by the firm cleared him, and prosecutors dropped the charge. He was cleared because "there was no physical harm or instance of domestic violence in this case," his attorney told reporters.

A person within the firm, who declined to be named in order to speak freely about private matters, said Jonathan Schiller recused himself from any matter involving the investigation into his son.

Yet, for leaders at the firm, many took issue with the fact that this was only the latest incident involving Josh Schiller, these people explained.

For instance, Josh Schiller was heard using the N-word at a party hosted by Susan Estrich, who joined the firm and became a partner in 2018, according to people familiar with the matter.

A person with direct knowledge explained that Schiller tried to reenact a Dave Chappelle joke comparing the use of the N-word to a homophobic slur.

Afterward, Estrich sent a note to the firm's leadership calling the remark inappropriate, the people added. A member of the management committee privately insisted to other leaders at the firm on an investigation but none of the party guests were contacted, this person explained.

"Everyone who heard it was horrified," this person who was at the party explained to CNBC.

Josh Schiller later told associates that he used these words as part of a joke, one of the people said. Schiller did not respond to an email seeking comment on the incident.

Estrich left the firm last year and is now a partner at Estrich Goldin. Among other career moves, Estrich is known as the attorney who defended the late Fox News executive Roger Ailes from accusations of sexual harassment.

She did not respond to CNBC's request for comment.

Business with another Schiller son

Another Schiller son, Aaron Schiller, runs an architecture company, Schiller Projects, which has done business with the law firm. Schiller Projects designed three offices for Boies Schiller, including its new office in New York's Hudson Yards complex and offices in San Francisco and Washington.

Several leaders at the firm were frustrated over not being consulted before the agreement with Aaron Schiller's firm, people familiar with the matter said. Leaders and associates at the firm are also unhappy with the Hudson Yards office design, the people added.

Schwartz told CNBC that Jonathan Schiller didn't decide to have the firm hire his son's company.

"The selection of that design firm was not made by Jonathan. It was made by other members of the firm management and was the process of competitive bidding," Schwartz said.

Employees at the Hudson Yards office moved there in 2019 from their former space on Lexington Avenue.

Schiller Projects says on its website that the Hudson Yards space has "no private corner offices, but rather a flowing space — a unique approach to open office design." The website describes the space as "an inversion of the traditional law office model, flipping perimeter closed offices to perimeter open workspaces" and says it "is promoting measurable increases in collaboration and employee workplace satisfaction."

But lawyers often use private spaces to conduct the reading of often confidential briefs and to call clients. Boies Schiller associates have complained about being crammed into what they described as fishbowl-type offices, forcing them to call clients from booths instead of their desks, several people said.

After this report was published Friday, a spokesman for Schiller Projects told CNBC on Sunday:

"We are an award-winning architectural design firm with extensive experience in reimagining commercial environments and corporate workplaces. The Hudson Yards project went through a rigorous, competitive bidding process. The resulting work won multiple awards, including Interior Design magazine's 'Best of Year Corporate Office Design 2019 for North America'."

Boies, Weinstein and Holmes

Boies, meanwhile, can't seem to escape the fact that he extensively helped both Weinstein and Theranos.

The New Yorker reported in 2017 that Boies personally signed a contract for an investigative firm known as Black Cube to uncover information that could stop the publication of a New York Times article about Weinstein's abuses.

Boies' firm was representing the Times in a libel lawsuit at the time. Boies confirmed to The New Yorker that his firm contracted and paid two investigative agencies on Weinstein's behalf.

Potential clients have since opted not to work with the firm in part because Boies helped Weinstein, people familiar with the matter said.

"It's not like Weinstein and Theranos are helpful to the firm," a former partner explained to CNBC. "You've got a lot of women who resent the whole firm. They don't want to hear the name Boies Schiller Flexner."

Around 2017, members of the firm confronted Boies at a private retreat over his role helping Weinstein. In the buildup to Boies fielding questions from members, Dunn was approached by a group of the firm's employees with concerns about Boies helping Weinstein, according to multiple people familiar with the conversations.

Dunn did not respond to CNBC's requests for comment.

In remarks similar to what he said at the retreat, Boies told The New York Times in 2018 that, while he concedes he made mistakes, he was just defending his client. In that same interview, Boies used the same reasoning for why he defended Theranos.

"You don't know all the facts when you take on a client," he said at the time, "but once you do, you have a duty of loyalty. You can't represent them halfway. If, as a lawyer, you start to value how you are going to look to the media, as opposed to how your client will look, then you should find a new profession."

The firm's public relations team sent a comment to CNBC from Joanna Wright, a partner and new member of the executive committee, about the decision to retain Black Cube.

"Retaining Black Cube for Weinstein was a serious mistake as David has, himself, said. We have since implemented procedures ensuring that never happens again," Wright said in the statement. "Having said that, I don't believe there is another firm where you can consistently do well while doing good at the scale and level we have historically done that and continue to today."

Holmes and Theranos, according to The Mercury News, hired Boies and a team of lawyers from his firm in a dispute with The Wall Street Journal as the paper was aiming to publish a story on Holmes' company. In 2015, Boies was a member of the Theranos board. The Times reported that he worked to quash reporting done by then-Wall Street Journal investigative reporter John Carreyrou.

Carreyrou went on to write an acclaimed nonfiction book about Theranos' rise and fall called "Bad Blood: Secrets and Lies in a Silicon Valley Startup."

Holmes is on trial for fraud. She recently lost a bid to keep more than a dozen emails between her and Boies Schiller lawyers out of the legal proceedings.

Clarification: This story was updated to reflect that authorities held Josh Schiller in detention over a domestic violence allegation, which was later dropped.