“My role as general counsel,” says
Lerman, “is not to take over somebody
else’s work but actually to help guide,
steer, lead and add value where I can.”
Then he pauses and adds with a grin,
“And know when to stay away.”
If humor is one of Lerman’s hallmarks,
and many say it is, he needed it during
the recent—and ongoing—global financial
meltdown.
Starting in 2008, before Lerman arrived,
Fannie Mae was bailed out to the tune of
$116 billion and placed in conservatorship
under the aegis of the Federal Housing
Finance Agency (FHFA). The agency
delegated day-to-day business operations
to the company, but it has final approval
on major business decisions.
All of which is a bit ironic since Fannie
Mae was formed during the Great
Depression to buoy the then-sinking
housing market.
As part of its mandate as a government-sponsored enterprise, Fannie Mae was
required to meet goals set by the federal
government to provide mortgages to
low- and middle-income families. But in
the post Glass-Steagall era, as investment
banks began to act as unregulated private
securitizers, Fannie Mae backed riskier
loans to achieve its goals and compete
in the market. When the housing bubble
burst, Fannie Mae was pulled down with
the banks it supported.
A few rocky years followed. But today
Fannie Mae is thriving and more successful
than ever. The housing giant is paying
taxpayers quarterly checks in the billions
of dollars in dividends. A September 2013
payment of $10.2 billion to the Treasury
brings the total amount Fannie Mae has
paid to $105 billion.
One major factor in its turnaround
has been its work to resolve disputes
with banks, including billions in financial
settlements for Fannie Mae, and to
rebuild those relationships moving
forward. To help resolve those issues,
Fannie Mae hired a new general counsel.
True, Lerman had no direct housing
finance experience. But he was a star
litigator in huge cases for politically
unpopular clients, had previously
worked in complex arenas and brought
knowledge of both the housing and
finance industries. He was almost made
to order.
ONE OF THE MOST INFLUENTIAL MEN
in Lerman’s life was an immigrant from
Ukraine who never went to school and
arrived in the U.S. unable to speak English:
his grandfather. “He used to talk about
how he was successful in business,” says
Lerman, “because of his reputation for
integrity and his ability to deal with people
fairly and get along with them. So he
taught me a lot about values.”
Those values served him well when
Lerman, a 1981 graduate of Harvard Law
School, became an assistant U.S. attorney
in the Northern District of Illinois. The
prosecutor’s office operated with what he
calls a submarine mentality—the belief
that everyone on the team either works
together or perishes together. “That’s
where I really honed my skills as a trial
lawyer,” he says. “I tried dozens and dozens
of cases and did appellate work. You’re
responsible for soup-to-nuts because you
have a limited staff. You investigate the
case, you craft the case, you develop the
testimony, and you go in front of the jury.
It’s yours from start to finish.”
Some of Lerman’s best work during his
eight years as a prosecutor, he believes,
involved one particularly difficult decision
regarding a young woman caught
transporting drugs. She had no real link
to any drug organization and cooperated
with the arresting agents. The Drug
Enforcement Agency decided not to
charge her, and the case languished for
five years until a new agent inherited it
and decided to take action. Lerman was
the prosecutor.
“In those five years,” says Lerman,
“she had graduated from college, was
a member of her church, and had lived
an exemplary life. So now you have this
issue of what’s fair five years later. On
the one hand, drug trafficking cannot be
forgiven. On the other hand, look what’s
happened over the last five years. What
value is there now in plucking somebody
out of that world and punishing her for
something that she’s disavowed and
clearly moved on from?”
Though he couldn’t reveal names or
other particulars, Lerman did divulge that
the case went forward in a way that he
thought was fair to everyone involved. And
it is this sense of fairness and big-picture
approach that has made him such a
sought-after commodity.
“I thought he was one of the finest
young lawyers in America and I wanted
him here at Winston,” says Dan K. Webb,
chairman of Winston & Strawn. Webb
eventually lured him to the firm, where
Lerman became co-chair of the white-collar litigation group.
“His judgment and insights were second
to none,” says Webb. “Sometimes I will
decide that I’m going to do something
on gut instincts, and sometimes your gut
is not right. Brad is a great check-and-
balance where he would walk into my office
late at night and say, ‘Do you really want to
do that?’ I would know that I’d better think
hard about it and we’d have a discussion,
and probably nine times out of 10 I would
decide he was right and I was wrong.”
In 10 years at Winston & Strawn,
Lerman handled a wide array of
cases—products liability, financial
fraud, accounting irregularity, political
corruption and antitrust. He also learned
how to handle infamous cases and clients
with a deft touch. He represented two
former Illinois governors, Rod Blagojevich
and George Ryan, in corruption cases;
defended Philip Morris USA Inc. in
tobacco litigation; and was outside
counsel to McDonald’s Corporation in
obesity-related litigation.
“He became what I call a very strong
client-relationship lawyer,” says Webb. “He
had excellent people skills and an ability
to communicate with clients so clients
understood what a great lawyer he was.”
“What you learn as a lawyer advising
those companies,” says Lerman, “is that if
you make a case that is truthful and factual
and calmly reasoned, that many times
people will listen. They may never agree,
but you can actually make a difference. In
the context of Philip Morris, almost nobody
likes cigarettes. The product itself is not
popular. And yet, in a litigation context,
or even in a regulatory context, when
the issues are understood and the facts
are brought to light and people are put
in a position of having to decide things
according to rules and legal concepts
and all the rest, you can actually have a
conversation. Dialogue is possible even
under those circumstances.”
In January 2009, he went in-house at
Pfizer to head the litigation group.
“One of the great strengths of Brad,”
says Pfizer’s executive vice president and
