The Ultimate Lawyer-Statesman

How Gary Naftalis beat Perry Mason, defended Michael Eisner, and sank a shot at Madison Square Garden

Published in 2010 New York Metro Super Lawyers — September 2010

The receptionists were polite and apologetic, but unfortunately, they said, Gary Naftalis would be tied up longer than expected. When Naftalis finally appeared, he, too, was apologetic. He explained that he had been delayed by an emergency phone call. He also suggested, with a wry smile, that getting into his office right away was not necessarily a good thing.

“If you were in big enough trouble, you would have gotten in right away,” he said.

For people in big trouble, Naftalis is worth waiting for. Over nearly four decades, Naftalis, 68, head of the litigation department at the 360-lawyer firm Kramer Levin Naftalis & Frankel, has defended both civil and criminal cases for so many business and corporate clients that The Wall Street Journal called him “the Zelig of the white-collar bar: He’s everywhere.”

His list of clients seems like a roll call of the major financial scandals: Enron, Tyco, GlobalCrossing, Wedtech, Warnaco, WorldCom, Cendant, BCCI, Refco, Gary Winnick, the New York Stock Exchange, and the city of New York. He earns his nearly four-figure hourly fees fending off criminal charges, investigations and lawsuits relating to insider trading, corporate malfeasance, securities fraud, misrepresentation, conspiracy, perjury and a myriad of other legal woes.

Michael Eisner, the former Disney chairman who was represented by Naftalis in a long, dramatic, headline-grabbing trial, is a typical client. Eisner notes that he grew up in awe of Charles Laughton as the barrister in the 1957 movie Witness for the Prosecution, and Raymond Burr in countless episodes of Perry Mason.

“But neither compared to Gary Naftalis systematically tearing apart the plaintiffs’ case in the Delaware Chancery Court,” Eisner says. “Gary was awesome, fantastic, theatrical and always right.”

 

Naftalis grew up in Newark, the oldest of three boys. His father sold insurance, and his mother stayed home and made sure the boys, all good athletes, did their homework. By the time he got to Rutgers, Gary realized he wasn’t going to play small forward for the Knicks. Instead, he thought he’d like to be a diplomat or maybe a professor. He majored in history, worked as a busboy in the Catskills during the summers, and won a prized internship at the U.S. State Department the summer after he graduated college. Home on a holiday break from grad school at Brown, he ran into an old friend who was in law school.

“Why do you want to spend your time researching stuff in the library?” the friend asked. “You should be a lawyer. You’ll have much more fun.”

Naftalis’ family didn’t know any lawyers, but it did look like fun on Perry Mason. If he had known how much time lawyers spend in libraries, Naftalis drily notes today, he probably wouldn’t have taken the law boards.

He did well at Columbia Law School, eventually becoming editor of the law review, but was intimidated at first. When two of his four children started law school years later, Naftalis cautioned them: “Don’t be fooled by the people who are raising their hands at the beginning of class. There is an inverse relationship between the people who raise their hands at the beginning of class and those who end up doing well.”

One of his Columbia professors was Marvin Frankel, who became his mentor, friend, and later his co-author on influential books about grand juries and sentencing. Frankel wound up a federal judge, and subsequently name partner at Kramer Levin.

Another friend and mentor in the 1960s was Abraham Sofaer, then a young assistant U.S. attorney and later a Columbia professor, federal judge and State Department adviser. Sofaer urged Naftalis to apply for a job as an assistant U.S. attorney under Robert Morgenthau, then the U.S. attorney for the Southern District of New York and later the long-serving Manhattan district attorney.

Naftalis worked as a federal prosecutor from 1968 until 1974, the first two years under Morgenthau. “Being an assistant U.S. attorney was a life-changing experience for me,” Naftalis says. “It got me to know and understand that I liked the idea of being a trial lawyer.”

His first trial, the typical “dog of a case,” Naftalis says, that Morgenthau assigned to rookies who were probably going to lose anyway, involved counterfeiting a $5 bill. Sure enough, Naftalis lost—he grimaces at how bad he was—but he couldn’t wait for the next one. He learned that he had to be both super-prepared and natural—himself—in court. “I like being in front of juries,” he says. “I like people, and to be an effective lawyer you have to like people.” Over the next six years, he tried more than 30 cases and won convictions in all of them.

He moved to private practice to support his growing family, spent several years with a small criminal defense firm, and in 1981 was recruited to join Kramer Levin. Made name partner in 1992, he now holds forth from the 30th floor of the firm’s Midtown offices, with spectacular views of the Empire State Building. Photos, clippings and awards from his legal triumphs decorate the office, but he’d rather talk sports or show off dozens of family photos.

His wife, Donna, was a longtime specialist in children’s disabilities at NYU and elsewhere. Their youngest, Sarah, 23, is an aspiring comedic writer, while Daniel, 27, is a high school English teacher in Massachusetts. Of the oldest children, the 32-year-old twins, Joshua is an associate at the New York firm Wachtell, Lipton, Rosen & Katz, and Ben is an assistant U.S. attorney in the Southern District who prosecutes cases involving international narcotics and terrorism. Naftalis occasionally likes to sneak out to watch his sons in court, just as he used to sneak out to watch their lacrosse games. “The two best lawyers in the family,” he calls them.

His kids laugh at the familiar line. “My dad is a great lawyer because he is a fantastic guy—plain and simple,” Ben says from the U.S. attorney’s office. “He always taught me that there is no substitute for hard work and that you can’t be over-prepared. Grace under pressure is only possible when you’ve put in the time to master the material and the situation. Even at his age and his level, he outworks everyone in the room.”

“I turn to my dad whenever I need advice,” Josh says from Wachtell, Lipton. “He is a counselor in every sense of the word, which is why I think his clients turn to him. He is as smart as they come and has great judgment, and he is a nice guy who likes to kid around. He puts you at ease while he helps you decide on the best course.”

Both talk about the importance of sports in the Naftalis family: pickup basketball, ski trips, hikes, lacrosse, going to Mets and Knicks games. Their father, who listens to sports talk shows on the radio, tells how Kramer Levin’s basketball team played its way into a league championship game at Madison Square Garden a couple of years ago. The young partners and associates on the team, knowing how Naftalis feels about the hallowed hardwood of the Garden, asked him to suit up. Naftalis, then in his mid-60s, got in for a few minutes—long enough to box out, grab an offensive rebound and put it in. Laughing a bit, Naftalis says he might be the oldest person to score a basket in an organized game at Madison Square Garden.

He talks about the law in the same offhand manner. In particular, he likes to tell stories about challenging the testimony of opposing witnesses. In one case, the witness admitted testifying as part of a plea bargain that included a five-year sentence. Naftalis pressed the witness. He didn’t really expect to spend a day in jail, did he? He had a secret deal with the prosecution, didn’t he? No, the witness swore. At that point Naftalis whipped out the witness’ recent haberdashery orders: several new suits, a new overcoat, even a new tuxedo, all custom-made. “If you really believed you were going to prison, sir,” he asked, “weren’t you at all concerned that the styles of that clothing might have changed by the time you got out of jail?” The witness sputtered, the courtroom erupted, Naftalis won the case.

A big part of his job is keeping clients out of court. In one case, a client who pleaded guilty could have been sentenced to 315 years, but Naftalis negotiated it down to 16 years. In 2007, the city of New York hired Naftalis amid the Manhattan district attorney’s criminal investigation into a fire at the 9/11-damaged Deutsche Bank building, where two firefighters died fighting a blaze blamed on inadequate city inspections; Naftalis convinced the prosecutors that criminal charges were not appropriate. When the now-defunct securities firm Kidder, Peabody & Co. hired Naftalis in the face of possible criminal charges, Naftalis negotiated a civil settlement after prosecutors were, according to a Wall Street Journal article, “struck by his gentlemanly style.”

The grueling Eisner trial, which lasted nearly three months in Delaware Chancery Court, was “a wonderful case to try,” Naftalis says. It was also a classic example of the way Naftalis mixes law, facts, common sense and fairness in his presentations. In the mid-1990s, Eisner hired his friend, the super-agent Michael Ovitz, to be the president of Disney. After 14 months Eisner fired Ovitz, who left with a $140 million severance package. Outraged Disney shareholders sued, and Eisner hired Naftalis. The trial focused on innumerable facts and figures, dates and numbers: who said and did what and when and where.

“A lot of these are complicated, sophisticated cases, and there’s a big difference between perception and reality,” Naftalis says. In the Disney case, Naftalis presented evidence that persuaded the judge that Eisner had a long record of success at Disney, turning the company around and continuing to build it up, all to the benefit of shareholders. He persuaded the judge that both hiring and firing Ovitz—and arranging the severance package—were all reasoned and reasonable business decisions.

“We live in an age where there’s a tendency to say there ought to be a regulatory or criminal response to any kind of economic issue,” Naftalis says. “But sometimes things just don’t work out. It doesn’t mean there was a crime. It doesn’t mean there was a violation of security laws. It simply means that things didn’t work out. Somebody made the wrong bet economically. Somebody thought the market would go up instead of going down. In hindsight, everybody is a genius.”

Naftalis expresses no preference between trying cases before a jury or before a judge. “Juries are fun,” he says. “Juries like to feel that you respect them, and that they are smart, and that they are fair, and they are not going to make decisions based on hysteria or prejudice and bias.”

It works. Last year, U.S. District Judge Jed Rakoff presented Naftalis with the New York Lawyers for the Public Interest’s highest honor, calling him “the ultimate lawyer-statesman.”

“When we were both in the U.S. attorney’s office,” Rakoff says, “I learned more about how to be a winning trial lawyer from watching him than perhaps from any other source, and in the process I also learned how important it was, even under the pressures of the trial process, to be scrupulously fair, honest, and imbued with the highest ideals.”

“Gary Naftalis, by universal acclaim, is one of this country’s best, brightest and most versatile lawyers,” says Mary Jo White, a Debevoise & Plimpton partner, who credits Naftalis with persuading her to return to public service and which led to her becoming the Southern District’s first woman U.S. attorney, from 1993 to 2002. “He has had more success in the courtroom and outside than any lawyer I know.”

That success includes a great deal of philanthropic and pro bono legal work for causes such as the Legal Aid Society, the American Friends of Hebrew University and treatment centers for disturbed children.

That success also means that, as much as Naftalis has enjoyed schmoozing about law, family, sports and old movies—“Just watched Strangers on a Train again,” he says—the conversation is over. Someone in trouble is waiting for him. 

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