Y. David Scharf has made a career out of being a sort of billionaire whisperer, steering rich clients away from their often counter-productive desire to crush opponents.
Scharf, a partner at law firm Morrison Cohen, is an advocate of sensible compromise, something that is often the exact opposite of his marching orders.
“I am always mindful that when you’re not dealing with corporations but individual high net worth clients that there can be an element of pride that is attempting to be vindicated. It’s very important for me as a lawyer to sometimes step out of my role as a litigator and step into the role of adviser and a counselor. That means pointing out and being aware when decisions are being driven by passion as opposed to business sense,” he said. “These are the types of litigation that when you get called in, can be driven by something other than a simple pro-forma analytic of business. As a consequence of that, that’s where I step in, and I like to think that I separate myself other colleagues who will simply be the pitbull that is just on a leash and runs around attacking.
“I would do that, but I also have the restraint to come back to the master and suggest a different path if necessary.”
Scharf, who has represented clients such as Donald Trump, Leona Helmsley, Carl Icahn and Ian Schrager, said that pride-driven decisions are particularly endemic in the real estate industry, which is home to outsized personalities fueled by billions in personal income.
“In the real estate sector, as I have seen over the course of my career, there are a lot of big personalities who are the real estate moguls that have lined the landscape and the skyline of New York. The reason why they’ve been successful and why they’ve been able to build edifices that are tributes to their success is because they have very large personalities and they are very goal-oriented, driven and achievement-directed people. People like that don’t like it when other people stand in their way,” he said.
His greatest hits include Trump and Conseco’s legal skirmish for the ownership of the General Motors Building, which was privately settled in arbitration, and Icahn’s spat with Pershing Square’s Bill Ackman over vitamin company Herbalife.
Currently, he’s representing Kansas City-based REIT EPR Properties in an $800 million lawsuit brought by Westchester developer Louis Cappelli.
Scharf said that at the start of disputes, his clients go through a sort of sue-or-be-sued response. He believes that the brain chemical responses in this phase obscure the truth about engaging in lawsuits.
“They don’t see that litigation has complexities — different turns, different paths. It can go on for years and years at great cost,” he said.
“I hear so often from my colleagues that the dissatisfaction of clients comes from after the fact: ‘Why didn’t you tell me that I wasn’t looking at things the right way?’”
He attributed his own victories to a method that relies on shifting tactics, which can be triggered by something as inconsequential as a bat of an eyelash.
“There is a high degree of intellectual gymnastics that goes on in a case presentation. While certain parts of it can be scripted in your own mind, there are foils that are not scripted. What I mean by that is your adversary, the jury and the judges. You have to see how they’re reacting. You have to respond to the things that they are thinking about.
“Any good trial lawyer or appellate lawyer will tell you that you may have the best laid plans, but what sets apart the top-tier lawyers from [others[] is the ability to perceive their surroundings and adapt to what’s happening. You have to watch the body language of a jury. You have to be able to respond to a shoulder shrug or a raised eyebrow of a judge and that body language — the non-verbal communication — is giving you cues that require you to react,” he said.
“I always say, a case is like a highway that has many different exit points. You can get to one place many different ways. You can get off and take the side streets or take the freeway. It’s about finding the path towards your goal.ˮ
