The Work

November 15, 2011 6:02 PM

Boeing GC Leads In-House Team in $18 Billion Deal with Emirates Airlines

Posted by Brian Baxter

UPDATE: 11/18/11, 9:00 a.m., EDT. Boeing has bagged an even bigger airplane order. British firm Stephenson Harwood is advising Indonesia's Lion Air on a $21.7 billion aircraft order from Boeing, according to sibling publication The Asian Lawyer. Boeing is also handling internally the deal documentation for that transaction.

In what the company described as the largest order in its 95-year history, Boeing announced Monday that it has reached an agreement to sell at least 50 planes to Dubai-based Emirates Airlines for $18 billion.

Boeing has freqently turned to Kirkland & Ellis for the bulk of its corporate work since moving its headquarters to Chicago last decade, according to our previous reports. For example, the firm advised the aircraft manufacturer last year on its $775 million acquisition of defense manufacturer Argon ST.

For this transaction, though, Boeing relied solely on its in-house lawyers, according to general counsel J. Michael Luttig.

Luttig became Boeing's general counsel in 2006 after stepping down from a seat on the U.S. Court of Appeals for the Fourth Circuit. At the time, he was reportedly a contender for a nomination to the U.S. Supreme Court, according to a story by sibling publication The National Law Journal.

In an unusual twist, the Supreme Court once reviewed a capital punishment case involving a man convicted of murdering Luttig's father during a carjacking in Texas in 1994. Justices Antonin Scalia, David Souter, and Clarence Thomas recused themselves from considering the matter because of their prior relationships with Luttig. (According to Luttig's bio on the Boeing Web site, he helped Souter and Thomas prepare for their confirmation hearings while working in the Justice Department during George H.W. Bush's administration, and clerked for Scalia on the U.S. Court of Appeals for the D.C. Circuit.)

Luttig, who earned $175,100 as a federal judge, suggested when he left the bench that money was a factor in his decision. His salary has indeed improved in the private sector. An SEC filing by Boeing reveals that Luttig's total compensation at the company last year was $3.8 million. Luttig is the thirty-fourth highest paid in-house lawyer in the country, according to an annual report by sibling publication Corporate Counsel.

Boeing's agreement with Emirates calls for the aircraft manufacturer to build 50 of its 777-300ER planes for the airline. CNNMoney reports that the agreement contains options under which the company could supply an additional 20 aircraft to Emirates, which would add $8 billion to the deal's value.

Boeing debuted its 787 Dreamliner series last month, and expects to ramp up production of the new aircraft next year. The company took a hit this summer when it lost an exclusive sales relationship with AMR Corp., the parent of American Airlines. Chicago-based AMR agreed in July to pay $38 billion to buy a total of 460 commercial planes from Boeing and Airbus. (Five outside law firms landed roles on that deal, according to our previous reports.)

Susan Schwab, a strategic adviser at Mayer Brown, serves on Boeing's board of directors. Besides Kirkland, other Am Law 200 firms the company has turned to for outside counsel on various matters include Bryan Cave, Fish & Richardson, and Perkins Coie, according to a database compiled by Corporate Counsel.

Emirates Airlines is a subsidiary of The Emirates Group, a wholly owned company of the government of Dubai. Emirates spokespersons did not respond to requests for comment on their outside legal advisers.

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