New Epstein Revelations Bring Massive Upheaval at Paul Weiss

Legal giant Paul Weiss is getting a new chairman for the first time in nearly two decades, but this transition is definitely not happening in a planned, orderly fashion.

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Brad Karp stepped down from the role yesterday after the latest tranche of Justice Department documents showed he had surprisingly close ties to disgraced financier and convicted sex trafficker Jeffrey Epstein—far closer than what Paul Weiss had originally indicated.

On this special episode of our podcast, On The Merits, Bloomberg Law editor Chris Opfer talks about what happened at this elite law firm and about the informal work Karp did for Epstein shortly before his death. Opfer also talks about why the firm’s profits may not actually suffer that much from this abrupt change in leadership.

“Long gone are the days of Paul Weiss being this, sort of, large litigation boutique,” Opfer said. “It’s much more a corporate-focused mega-firm.”

Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

This transcript was produced by Bloomberg Law Automation.

Host (David Schultz):

Hello and welcome to this special episode of On the Merits, the news podcast from Bloomberg Law. I’m your host, David Schultz.

The elite law firm Paul Weiss just got a new chairman. That, in and of itself, would be pretty newsworthy. But the reasons why are what makes this into a really big deal. Brad Karp, the firm’s chairman for almost 20 years, stepped down after it was revealed he had surprisingly close ties to disgraced financier and convicted sex trafficker Jeffrey Epstein. These revelations were contained in the latest batch of the so-called Epstein files released by the Justice Department late last week.

We’ll have more on this podcast about this still-developing story, but today, just hours after Paul Weiss announced the move, we want to update you on what went down, why it happened, and what it could mean for the firm moving forward.

To do that, we have today Bloomberg Law editor Chris Opfer. I started the conversation asking Chris to tell me a little bit about Karp’s background and about how he came to occupy one of the most powerful positions in the legal world for so long.

Guest (Chris Opfer):

Well, up until last night, Karp was the chairman of Paul Weiss, which is an elite global law firm based here in Manhattan. He is a lifer at the firm. He’s been there for nearly 40 years. He had been in the chair position for nearly two decades. He got there by being a big-time litigator, and it was widely expected that this would be his last term, this term that was set to expire in May of 2028, but other events have intervened.

Host:

I’ll say. Can you explain to me how Karp got involved initially with Jeffrey Epstein? You know, because as I understood it, he was initially representing someone who was suing Epstein, Leon Black, the head of Apollo, who was in a dispute with Jeffrey Epstein over fees. How did he go from representing the client who was suing Epstein to being a sort of informal advisor to the guy?

Guest:

Well, that’s a question that we have had and that a lot of other folks have had, and so it’s detailed in this tranche of emails that the Justice Department has released over the last year, all related to Epstein and his communications with a wide variety of people, Brad Karp being one of them, and it shows that the two of them had this relationship over the course of really a decade, which began with Karp representing Leon Black, the co-founder of Apollo and a longtime Karp client in a fee dispute with Epstein, and which, as you said, evolved over time to where it was really a much more chummy, friendly, personal relationship in which they discussed all kinds of different things.

Karp spent a couple of evenings being hosted by Epstein at his home in Manhattan, and even over time evolved into this relationship where Karp was actively advising Epstein on his sort of legal defense and his legal response to the heat that was building up around him as all of the allegations about sex trafficking and the like came back to light in 2018, 2019.

Host:

Yeah, and I think that’s one of the really crucial pieces that we reported out yesterday right before Karp resigned is that it looks like Karp was advising Jeffrey Epstein in the months before he died over how to keep a plea agreement intact. Now, Paul Weiss initially said that Karp had very limited interactions with Epstein, but it seems like this would sort of argue for the opposite of that.

Guest:

Yeah, it goes well beyond what Paul Weiss has been saying from the jump was the relationship, and it really showed that, although it may have been informal and Karp may not have been paid for his work, he was certainly advising on the legal strategy behind the scenes as multiple court cases were active against Epstein. There was a big push for the DOJ to scrap a controversial plea deal that Epstein had been able to secure back in 2008. There was a lot of talk about unsealing documents that were going to be probably not that great of a look for Epstein and a lot of his associates, and there’s Brad Karp actively weighing in on legal filings, as well as a letter to the editors of the New York Times that was ultimately signed by four lawyers who officially represented Epstein.

Host:

So this latest move that just happened yesterday is the latest in a string of setbacks for Karp over the last year or so. Can you talk about all the things that I guess have been sort of going wrong for him, starting with his heart attack about a year ago?

Guest:

Yeah, it’s really been a difficult 11-month stretch for Brad Karp, and this past week, really less than a week, has been the icing on the cake here for a pretty rapid fall from grace for the leader of one of the world’s most prominent law firms.

It began back in February or March when President Donald Trump issued an executive order targeting Paul Weiss and threatening to revoke security clearances, ban attorneys’ access to federal buildings, and to potentially tear up government contracts for Paul Weiss’ clients, and this all had to do with Trump’s repeated attacks on certain law firms because of their ties to people who had investigated Trump or had gone up against him in court or that he simply felt were too woke, and the response by Paul Weiss was to reach a deal.

Ultimately, they were the first of nine major law firms that reached these deals with Trump in the White House in which they pledged not only to walk away from certain diversity initiatives, but in fact to provide legal services on behalf of or in favor of issues of shared interests between the firm and the White House, so things like fairness in the justice system, veterans’ rights. And so all told, Paul Weiss sort of started this wave in which a bunch of other firms said, well, let’s just go ahead and make these deals as well so we can get out of Trump’s crosshairs, but these things were super controversial in that a lot of folks saw it as firms bending to a president that they should really be standing up against, and it led to lots of departures not only at Paul Weiss but elsewhere.

Host:

Yeah, and I mean, we reported earlier on this podcast that Karp gave a speech later last year where he said that experience of having to decide what to do and how to respond to this was worse than having a heart attack for him, that he thought that was more painful, which is pretty remarkable.

Guest:

That’s right, and he revealed at the time that he had had this heart attack, and then fast forward to last Friday when I think a lot of people at Paul Weiss and the other firms felt like the Trump deals were sort of in the rearview mirror and they could move forward. All of a sudden, there’s this new tranche of DOJ documents that have Karp’s emails to Epstein all over them.

Host:

Okay, finally, let’s wrap this up by talking about Paul Weiss, because we’ve been talking about the people, let’s talk about the firm. Karp has been at the helm at Paul Weiss for a long time. I have to imagine that his very abrupt exit will change some things at the firm, it has to, but on the other hand, Paul Weiss is such a huge firm, it’s so profitable, can the departure of any one person really derail the firm by that much? What do you think?

Guest:

It’s hard to say. In this case, no, because of what we’ve been reporting on has been happening at the firm already, and that is that under Karp’s watch, certainly in the last five years to the last decade, it has shifted from this very much a white-shoe litigation-focused firm to a corporate deals behemoth trying to compete with the Kirkland & Ellis’s and the Latham & Watkins of the world. And a big part of that was bringing in Scott Barshay, who’s the head of the corporate transactions practice, came over from Cravath and really helped transform Paul Weiss into what it is today.

And as part of that, they’ve also made a lot of changes that other major law firms have made that have moved them sort of into being more like massive corporations than what you would think of traditionally as a law firm, paying rainmakers at these unbelievable salaries that are approaching pro sports level and competing tooth and nail for work on the biggest deals in the country. And now as Karp has stepped down, Barshay has been elevated to the chairman role, and we think that’s just going to cement what’s already been going on there. And long gone are the days of Paul Weiss being this sort of like large litigation boutique, and it’s much more a corporate focused mega firm.

Host:

All right, that was Bloomberg Law editor, Chris Opfer, speaking with us here about the resignation of Brad Karp. Chris, thank you so much for taking the time.

Guest:

Thank you.

Host:

And that’ll do it for today’s episode of On the Merits. For more updates, visit our website at news.bloomberglaw.com. Once again, that’s news.bloomberglaw.com.

The podcast today was produced by myself, David Schultz. Our editor today was Greg Henderson, and our executive producer was Josh Block. Thanks everyone for listening. See you next time.