Pallas Gets Boost From Litigation-Hungry Institutional Investors

London litigator Natasha Harrison has focused on high profile investor lawsuits in the nearly two years since she ditched her leadership role at Boies Schiller to launch a boutique firm.

Pallas Partners, Harrison’s new firm, is at the center of disputes involving Blackstone, Bain Capital, and Credit Suisse, among others. As its New York outpost reaches its first year, the firm’s transatlantic lawyers are positioning themselves for what they expect to be a spike in disputes over deals gone bad following the pandemic-era transactions boom.

“There has been a fundamental shift in the approach and appetite of institutional investors to litigate,” Harrison said. “We are also seeing fallout from the private equity boom of the last few years, in particular, parties seeking to walk away from deals with buyers’ remorse following failures to conduct proper due diligence.”

Harrison runs Pallas in some ways more similar to the businesses of her hedge fund and private equity clients than to traditional law firms. The litigation shop launched in the UK with the backing of outside investors and the firm often turns to litigation funders to team up on cases. It favors contingency fee arrangements in which payment varies based on results, pitching lawsuits as joint ventures.

“In a lot of our cases, we’re helping clients create value offensively,” said Duane Loft, the Boies Schiller alum who runs the firm’s New York office. “We want to be partners with our client. They want us to have skin in the game like they do.”

‘Pushing the Envelope’

Harrison launched the firm in early 2022, shortly after leaving Boies Schiller, where she was widely seen as heir apparent to firm co-founder David Boies. She took most of her London colleagues, and at least some clients, with her.

Pallas Partners—named for the goddess of war, wisdom, and handicraft—officially opened an office in New York in September 2022. Pallas Partners US is a separate entity under the Pallas brand.

The firm is advising Blackstone as the private equity titan explores possible claims against Bain Capital and others over the 2020 collapse of Italian tiremaker Fintyre, according to the Financial Times. Pallas declined to comment on the probe, which stems from a $243 million investment in Fintyre.

The firm also is representing Credit Suisse bondholders in a Swiss lawsuit seeking over $1.7 billion that they claim was wiped out when UBS Group AG took over the bank in February 2023. Pallas Partners is taking on Glencore on behalf of investors seeking over $2 billion after the mining giant pleaded guilty to market manipulation and bribery in a UK court.

Sweeping, US-style class action and securities fraud claims are becoming increasingly common in UK courts, Harrison said. That creates opportunities for investors.

“What we’re really seeing now is a shift in institutional investors in the UK who are proactively managing their portfolios,” she said. “It’s incumbent on them to actually take these types of actions.”

The firm’s relatively small client list allows it to take cases against major corporations with fewer conflicts than massive firms with offices around the world.

“They know that when they see our firm, it’s a firm that’s going to be aggressive, it’s going to push the envelope because we’re conflict free,” Loft said of adversaries. “We don’t have to worry about upsetting a big bank or upsetting a partner in our tax department.”

Outside funding helps even the playing field with larger competitors, according to Harrison.

“Litigation funding is a really important and powerful tool in the market, particularly for a young firm who’s building up,” she said.

Natasha Harrison

Pallas has 18 lawyers in London and another eight in New York. It’s looking to continue to grow, but Harrison said she wants to cap headcount at around 40 in each office.

“The moment you get over 100, you’re moving out of the boutique model,” Harrison said. “You’ve either got to stay under 100 or you’ve got to scale all the way up—that middle position is quite tricky.”

Long Arm of Law

In the US, Pallas lawyers are representing a group of investors suing over a breakup fee stemming from Hertz Corp.'s bankruptcy. They’re also advising hedge funds suing Bombardier Inc., alleging the Montreal-based aerospace manufacturer defaulted on certain bonds.

The firm is using its transatlantic reach to use litigation in US courts to aid related court battles playing out in foreign jurisdictions.

Pallas lawyers are trying to subpoena Republican presidential candidate Vivek Ramaswamy through a federal court in Ohio. They’re seeking information for a lawsuit filed in Bermuda on behalf of investment firm Alpine Partners, alleging that its shares in a Ramaswamy healthcare startup were undervalued when the company was acquired.

The firm is also chipping in on pro bono cases, with an eye toward complicated legal disputes.

Pallas is representing UK-based advocacy group ClientEarth in a lawsuit against Shell PLC’s directors, alleging that the energy company is responsible for climate change and the directors are personally liable. Loft said it’s the first time directors have been sued over climate change individually. The litigation is meant to change the boardroom conversation.

“It sounds simple, but there is no legal precedent that clarifies this intersection of directors’ duties and climate risk in the UK,” ClientEarth lawyer Paul Benson said. “Pallas offered the full package: the experience in litigating complex and novel disputes required to build this claim, but also the boldness to challenge traditional conventions.”