M&A Power Wachtell Could Be ‘Last True Law Partnership’

  • Martin Lipton, the marquee name in its M&A specialty, embodies spirit of the firm
  • He’s 87 and it’s only natural to think about firm’s direction, key partner says it’s not changing

For decades, competitors of M&A law firm Wachtell, Lipton, Rosen & Katz have privately bet against its longevity, saying its business is too closely tied to a single person: Martin Lipton.

The 87-year-old attorney who created the “Poison Pill,” a corporate strategy to protect against hostile takeovers, has not stepped away from his 31st floor office at Wachtell’s headquarters in Manhattan.

He continues to spar with the likes of Carl Icahn, Paul Singer and other billionaires in proxy fights, meets with CEOs at the 21 Club for lunch, and pens memos about corporate law to a who’s who of business executives.

In fact, his schedule is as busy as it was in the 90s, his secretary says.

Lipton’s also advising United Technologies Corporation in its $23 billion acquisition of Rockwell Collins Inc. in what could be the largest aerospace deal in history. And he’s working with longtime client, CBS Corporation, which is confronting the departure of CEO Les Moonves over sexual harassment allegations as the media giant comes under new management.

Although Lipton has no plans to retire, the question of what will happen to his 260-lawyer firm when he does hang it up has been carefully considered throughout Wachtell’s ranks, according to interviews by Bloomberg Law with more than two dozen of its partners, associates, and staff.

As many as 10 key clients continue to rely on Lipton’s judgment. UTC general counsel Charles Gill says he communicates weekly, if not daily, with Lipton, including 3 a.m. emails if things get urgent. And while Larry Tu, chief legal officer of CBS, depicts his relationship with Wachtell as “very deep,” he acknowledges what he calls Lipton’s “unmatched legacy,” saying he’s a lawyer who has “built personal relationships with senior executives in many companies.” Those are “not easy to hand off to someone else,” he says.

One firm staffer goes as far as saying Lipton “is the firm.”

Lipton, however, sees it differently.

“If I wasn’t here tomorrow, the firm wouldn’t be any different,” he says in an interview at his office. “You don’t have a firm unless the generations can pass it on to the next generation.”

The Big Transition

Passing it on is what Lipton has quietly made what is likely his last act at his 53-year-old firm. And it has included more than just passing down legal work, a process that longtime clients such as CBS and UTC can attest to.

Marty Lipton attends the Allen & Company Sun Valley Conference on July 8, 2015 in Sun Valley, Idaho. (Photo by Scott Olson/Getty Images)

Although he surrounds himself with partners who take on greater responsibility, one key thing he’s done is try to preserve what he and others feel makes the firm special, and also a dying breed in the legal profession. A place that keeps a familial culture, where partners treat each other with respect, and where money, although they make plenty, is not ultimately what binds the place.

“The great thing about the firm is that the culture that the four [founders] started with has been bought into by now three generations of new partners,” says Lipton. “You try to keep a way of living together in practice that works, that hopefully everyone is happy with.”

What partners have bought into is a list of principles Lipton jotted down some three decades ago. Today, they sit in a small room connected to his corner office, where he likes to meet guests. There, a Stueben glass tower is displayed on a shelf and etched with small black letters. Get close and you can read all 35 principles.

They might seem dated to an outsider. One forbids marketing or public relations, saying the firm doesn’t seek clients that way. Another says it doesn’t recruit attorneys from a competitor. A third says the firm has no branch offices. It confines growth to five to 10 lawyers a year, most right out of law school or clerkships.

Perhaps most important is how the firm pays its partners through what’s known as a “lockstep” system. Compensation is tied to firm seniority, rather than hours billed or business brought in.

These principles—and the culture they’ve helped create, where attorneys meet on Tuesdays for lunch to stay close—have been held up by Wachtell partners as “genius,” a playbook worthy of a Harvard Business School case study offering broader lessons for corporate America.

They’ve also helped make Wachtell something of an outlier. It’s the only major law firm where, at least to Lipton’s knowledge, not one partner has joined another law firm for a bigger paycheck.

Lipton, who has made a name for himself protecting boards of directors from unwanted acquirers, has helped create a culture in his own firm that’s shielded it through the chaos of tougher times in the legal industry.

It is an industry where partners, even within the same firm, compete with each other for client business, engage in aggressive marketing campaigns, and seek to capture market share by poaching partners from each other, or executing full-scale mergers with competitors.

Activists and Principles

Lipton’s principles say Wachtell will never merge and emphasize the firm isn’t a business, but an old-fashioned partnership with no written partnership agreement – a handshake between friends.

Partners make decisions by consensus, each with one vote. Its lawyers are involved in the community, and the firm encourages them to teach, lecture, write books and law review articles, and participate in bar associations. There is no single major client, which helps keep its counsel unvarnished. And its lawyers deploy on client matters through organized task forces, across specialties.

Often this means butting heads with billionaire investors as Wachtell defends companies in hostile takeovers and activist shareholder campaigns.

Bill Ackman, for one, has invited Lipton to debate in a public forum about the virtues of activism, an invitation he’s not accepted. In an interview with Bloomberg Law though, Lipton says Ackman’s investment in Valeant, which cost his firm, Pershing Square Capital Management, $4 billion in 2016, was a vivid illustration of the perils of activism.

Bill Ackman, chief executive officer of Pershing Square Capital Management LP, speaks during a Bloomberg Television interview in New York, Nov. 1, 2017. Photographer: Christopher Goodney/Bloomberg via Getty Images

Two years ago, as its executives faced charges of accounting fraud and price gauging, Valeant stock collapsed, plunging by 90 percent. Since, the firm has brought in new management and its position improved in 2017 and 2018.

Ackman declined to provide any on-the-record statements for this story.

Wachtell has also riled other investors.

One is Carl Icahn, a longtime adversary who has often attacked the firm’s clients with takeover bids. In 2013, Icahn filed an unusual malpractice suit against the firm. He claimed Wachtell didn’t make important fee disclosures to its client, CVR Energy Inc., in a 2012 takeover by Icahn. Wachtell denies any malpractice and the case continues to play out in Manhattan court.

Billionaire activist investor Carl Icahn, center, arrives during the 58th presidential inauguration in Washington, Jan. 20, 2017. Photographer: Andrew Harrer/Bloomberg via Getty Images

Icahn, through his lawyer, declined comment.

Inside Wachtell, Lipton’s principles embody the anti-activist.

The firm is known for being adverse to change. Lipton and the only other living founding partner, Herb Wachtell, still sit on Wachtell’s four-person executive committee, though Lipton maintains it is an informal governing body that hasn’t met for years.

Now, as Wachtell undergoes yet another generational transition, a key question is how closely future leaders will stick to Lipton’s principles. Whether the firm preserves Lipton’s ethos or tweaks it is one of the most important decisions confronting the firm’s next generation of leadership.

Over the past 12 years, firm management has been taken over by Dan Neff, 65, who represented Whole Foods in its acquisition by Amazon, and Ed Herlihy, the 71-year-old bank lawyer who Jamie Dimon turned to for JPMorgan’s whirlwind acquisition of Bear Stearns.

Their strategy, rather than seeking to reinvent Wachtell, has been to continue with the status quo in terms of the type of work Wachtell handles and how the firm functions as a law practice.

“If I have one mantra, it would be, ‘Don’t mess up a great thing,’” says Neff.

Herlihy is the same. “We’re not changing,” he says. “We’re building a long term firm that we hope is here for many generations.”

Now, the firm has expanded from the dozen or so partners of Lipton’s day to 80 with different backgrounds and perspectives. Some are mulling who should take over post-Neff and Herlihy, though the conversations have been informal and preliminary.

One partner who declined to be named to preserve relationships, says that several of its characteristics are sometimes discussed. This includes whether to tweak the lockstep pay system to better compensate productive, younger partners, or whether to increase the size of its partnership.

Such changes seem minor in an industry that has seen dramatic re-configuration. Other major firms, such as Boston’s Bingham McCutchen, the lobbying powerhouse Patton Boggs, and Washington’s Dickstein Shapiro, have merged or been acquired.

Some firms have filed for bankruptcy, like Dewey & LeBoeuf, which once staffed as many as 1,300 lawyers around the world, with clients like Dell, eBay, and the Los Angeles Dodgers, or Howrey, which fell the year before. Even extremely profitable, prestigious firms have seen some cracks surface. Just recently, Cravath Swaine & Moore saw two prominent M&A partners exit over the past two years.

“It may be the last true partnership,” says Neff of Wachtell.

If that is true, then how long will it last?

Staff members and lawyers acknowledged their concern that firm culture could change after Lipton retires.

Constance Monte, the firm’s chief financial officer, is one staff member fond of Lipton’s legacy. She says Lipton includes partners in client meetings, shares work, doesn’t take the spotlight, and initiates a phone call if a firm member is in trouble. She hopes his generosity continues to live on in future Wachtell generations.

“I think carrying out those values, the firm will go on,” says Monte.

She isn’t without her reservations though.

“Not every partner may be as committed, but the majority are,” she says. “Things change; nothing can stay the same. I don’t know if everyone is going to stay … once the founders retire.”

Not Immutable

In terms of any changes going forward, Lipton downplays the importance of his principles in their closest reading, saying they are not immutable in the future. A number have already been challenged.

For instance, since as far back as the 1990s and early 2000s, the firm considered both a London and Silicon Valley office, neither of which worked out. But, he says, he can’t imagine Wachtell would ever change its lockstep pay system, which he considers “the essence” of the firm.

His principles capture the left-leaning ideals that carry over into his politics. He bemoans the election of Donald Trump, saying his public statements have threatened American democracy and his policies haven’t worked. One of Wachtell’s senior lawyers, Eric Roth, calls the firm’s lockstep system “socialism for rich people” because Lipton thinks top performing partners should share their profits throughout the rest of the firm.

Staff members should be valued, too, one of his principles says. And no layoffs should ever be conducted as a cost savings measure.

“I don’t think we’ve ever deviated from treating people well,” says Lipton. “We’ve never fired anybody, other than for cause. We terminated some people for cause, but never to save money.”

Profits Help

Of course, it hasn’t hurt that Wachtell has been so profitable. Though Wachtell partners insist they never disclose their financial figures, the firm is regularly pegged as the most profitable by The American Lawyer. In its most recent issue, it reported Wachtell earned profits per partner of $5.7 million a year. (One partner says that figure falls well below the average).

That’s because the firm advises on the most lucrative legal matters, with the ability to charge premiums on large public company mergers that don’t log hours of attorney time.

Instead, like an investment bank, Wachtell simply charges a single-line invoice that takes into account the size of a deal and the firm’s perception of Wachtell’s value, which a client can either accept or debate. The firm’s deal pipeline, meanwhile, remains active, handling about 75 major transactions a year, according to Lipton’s estimate.

Its headcount remains low. That’s compared to peers that staff at least double or even four or five times as many lawyers, which helps Wachtell generate profits that surpass rivals.

According to The American Lawyer’s most recent financial data, Wachtell’s attorneys generated, on average, $3.1 million in 2017, nearly double the next highest revenue-per-lawyer law firm. Sullivan & Cromwell, with far more associates and partners—812 attorneys, spread across 12 offices in the U.S. and overseas—generated $1.7 million revenue per lawyer.

Without such profitability, would Lipton’s values hold up?

For one thing, Wachtell’s lockstep pay system, which pays partners based on years of service regardless of performance, only works if there is enough money to go around, partners acknowledge.

Top partners only earn about three times as much as the most junior partners, whereas elsewhere in the legal industry, firms go out of their way to compensate star partners generously, sometimes as high as 25 times more than junior counterparts. Those partners’ compensation is tied to performance: how much business the attorney is responsible for, client contacts, and hours billed.

Money Isn’t Everything

What, then, would prevent a young, high-performing Wachtell partner, billing more than 2,500 hours a year, from joining a firm that compensates for that work, rather than stay at a firm where he or she will forever be ranked lower than senior partners who have amassed their wealth through loyalty to the firm?

“Money isn’t the last thing in their lives,” responds Lipton, who believes in the old-school ethos that the law is a profession, not a business, and that money should be viewed as a byproduct of the work, not the chief reason for it.

Besides that, other partners say competitor law firms don’t offer a platform with as uniform quality attorneys throughout the partnership. Though they may receive an immediate pay boost by joining a competitor, it is the mindset that their practice works best with all of Wachtell’s divisions – corporate, tax, benefits, restructuring, and litigation – supporting one another.

Join another firm and risk entering a different environment, where partners operate in their own best interest, compete for clients, and where your individual practice is not as well supported by the rest of the team.

Corporate partner Andy Nussbaum—chair of the board of trustees at Amherst College—says he is sometimes approached by law firms offering him “silly amounts of money.”

He poses the question: how would partners at those firms feel about an outsider coming in and earning so much more immediately? “If I were one of them, why would I want me there? I don’t like the message it sends to the rest of the partners, put aside what it says to the associates.”

So far, there has been enough money to go around and keep Wachtell partners happy. Global deal activity has been off the charts. The first half of 2018 counted $2.1 trillion in global M&A, more than 36 percent higher than last year, with Wachtell capturing more than $210 billion, according to Bloomberg’s M&A data.

Wachtell Lipton


It’s not only that no partner has left the firm for a bigger paycheck. Neff, the Wachtell co-chair, maintains he hasn’t even dealt with a partner who has been made an offer and is considering leaving.

“We will practice law and organize ourselves as we have done,” he says. “It has worked. We don’t see a reason to change it.”

Most Selective

Perhaps the clearest indicator of Wachtell’s trajectory is its people.

Senior lawyers like to say that they wouldn’t be accepted there today if they had applied with their law school credentials. It is among the most selective law firms, recruiting from seven top law schools – Harvard, Yale, Columbia, NYU, Penn, Stanford, and Chicago.

Sometimes, it will interview applicants from schools that send in resumes, like Duke, UVA and Cornell.

“Our lawyers want to understand how you think,” says Elizabeth Breslow, Director of Recruiting and Legal Personnel at Wachtell. “Anything on your resume is fair game and you might be asked about that article you wrote for law review or that project you worked on for work between college and law school.”

Wachtell accepts about 25 summer associates every year, although a number often go on to clerk, move into government, in-house, or pursue a different career path.

Such an approach has filled Wachtell’s halls with top law review editors and former clerks of U.S. Supreme Court justices and other prominent judges. But whether younger generations will continue to preserve Lipton’s idea of the-firm-as-family remains to be seen.

At least one senior lawyer feels shiny resumes have not always translated into a great fit. Law students from pedigreed backgrounds don’t necessarily demonstrate grit, he says, while others have viewed Wachtell as a place to pad their resume and then move on to another career.

Yet lawyers who have rose to partnership seem to share the firm’s esprit de corps, as well as senior associates interviewed by Bloomberg Law.

“There’s a lot of loyalty to this firm,” says Jacob Kling, a senior associate in the firm’s corporate practice who has advised on corporate matters for Thermo Fisher Scientific.

“There is a lot of appreciation for what Marty and Dan and Ed and that generation have done. They created this firm out of scratch.”

To keep Wachtell’s culture intact, firm partners have commissioned a video documentary of its history, which it shows to incoming associates so they can get a sense of the firm’s values, and Lipton often meets with summer associates, seven at a time outside his office, discouraging them to join just for the money, among other words of advice.

“It’s just contrary to our ethos to focus on money,” says Lipton.

An associate at Wachtell typically earns slightly above the base salary of other major law firms, which for first-years stood at $190,000 this summer. But many associates, often mid-level or senior-level, can earn as much as 100 percent of their base salary in bonus.

“You will be very unhappy if you come here for money,” warns Lipton. “You should focus on doing the best job you can do for clients and having a pleasant place to work.”

That is no easy task at a firm that serves as an emergency responder to boards of directors under attack.

Four hundred staff members do their part to make life manageable for attorneys.

According to interviews with mailroom staff, recruiting coordinators, secretaries, and those in accounting, staff members take requests of all kinds, fetching an attorney’s suit at his home closet if need be, or making arrangements for the client like ordering up special Dove bars for a conference meeting.

Receptionists work in shifts, and provide around-the-clock service from the firm’s single New York City office. Women dressed in black and white whisk in and out of offices, replenishing food and drinks and taking requests for refrigerator fill-ups. “Would you like a drink? Would you like a coffee? No? Are you sure?” It’s not uncommon that the question is asked repeatedly, by a second or third staff member who didn’t hear the first no thanks.

Neff, the firm’s co-managing partner, insists none of that will change.

“It’s a point of pride for us that in 2008, 2009, when the world was blowing up, there were no layoffs, and no cut backs, and other law firms went after that as a way of saving some money,” he says. “The people in the staff here have made a commitment to us, and we are going to make a commitment to them.”

The commitment, though, has not always been felt.

Around the time of the recession, a lawyer Wachtell hired from UBS to help manage the firm brought in a consultant to examine the firm’s staffing model. At least one employee in the mailroom received a performance evaluation by the consultant that was not to his liking. Some remember the consultant considered reducing staff overall.

“I would guess that every five years or so that somebody’s come up with ideas for saving money by reducing benefits or what not,” says Lipton. “But it’s not me. No question, if I was asked, I said no. I’m not in favor of that.”

Lipton says he doesn’t remember the consultant considering any cuts. But even though none were executed, Wachtell did offer early retirement packages to staff, according to one lawyer at the firm, and slashed staff bonuses.

“We still do extraordinary things for some people but the ‘treat everyone the way  you would like to be treated yourself’ approach that Marty founded this place on – I’m not going to say it’s gone, but it’s somewhat eroded,” this lawyer says.

The attorney also recalls that the former UBS lawyer proposed a rebrand that would have chopped the names, “Rosen and Katz” off the letterhead. Firm mugs were even ordered, which instead of saying “WLRK” in white letters over black, as they do now, read “Wachtell Lipton.”

They were done away with after the founding partners discovered his plans and expressed their distaste.

“I was appalled,” says Herb Wachtell, a founding partner who still uses a typewriter to write briefs. “You know, we have two former partners who I love. I didn’t want their name out of circulation. … I miss Leonard, and I miss George, every day.”

Wachtell referred to Leonard Rosen and George Katz, the two founders who would have been cut from the firm’s name, who died in 2014 and 1989 respectively.

Experiencing Change

William Starbuck, a business scholar who studied Wachtell in the 1990s, says that the firm’s growth could threaten its culture.

Back when Starbuck studied the firm, it had around 100 lawyers and already its partners were saying that the firm had become too large. The larger Wachtell gets, the more difficult consensus becomes, the harder it is to maintain its culture, as well as attorney quality throughout.

“When you bring in junior people you bring in new ideas, new ways of thinking about things,” says Starbuck.

What was once an even 50/50 split between partners and associates, which one of Lipton’s principles calls for to prevent hierarchy, has slipped. After years of slow growth, Wachtell has amassed 121 associates and 80 partners, along with 17 counsel and 35 of counsel. Associates must wait eight years to learn whether they will make partner, not the six that one principle outlined. And it is no longer “the basic premise that every associate will make partner,” as the principle says.

Neff says the firm’s growth has been fueled by the size and complexity of deals, as they become cross-border and multi-faceted with the globalization of big business. Whereas Wachtell once partnered with local, regional law firms to handle multi-jurisdictional mergers, nowadays many of those firms have been swallowed up and become part of giant legal behemoths, leading Wachtell to grow from within its ranks to take on more work.

The work itself has changed, too, Neff says. Forty page double-spaced merger agreements have become 100-page single-spaced agreements, with highly specialized sections dealing with things like executive compensation and benefits, he says. To keep up with its workload, the firm brings onboard its 25 summer associates every year, and it has hired several staff members to oversee their hiring, onboarding and retention, along with the firm’s other talent, including staff, partners and alumni.

With the added headcount, it can be difficult to keep tabs on everyone.

“I lost an ability to have a conversation with absolutely everybody here,” says Neff. “I wish that weren’t so. … It’s not a turn for the better from how I’d like things to be.”

Still, he says, Wachtell has demonstrated disciplined growth compared to its competitors. And its ratio of partners to associates is small compared to the industry norm.

“We’ve never brought anybody in laterally for business,” says Lipton. “In fact, the people we’ve brought in laterally, we’ve said, ‘We don’t want your business, if you have any.’ We’re always afraid that that will change. Business is the firm’s business – not somebody’s business.”

Shortly after Andrea Wahlquist joined the firm from Simpson Thacher in 2014, the executive benefits lawyer recalls partners testing her commitment to the firm’s culture.

“Different partners who I hadn’t met before kept coming to take me to lunch, to make sure I understood this is the way the culture was,” she says. “‘Don’t bring any newfangled ideas from some other firm that you know isn’t our firm.’”

In recent years, the firm has thrown anniversary receptions to keep alums close, some of whom have gone on to become in-house counsel at large companies or SEC commissioners.

This year, Wachtell threw a reception at the Ziegfeld Ballroom, where George Conway made the rounds and partners gabbed about his critical tweets of his wife Kellyanne Conway’s employer, President Donald Trump.

Later, Neff gave a speech to mark the occasion, saying how Wachtell’s story could be the material of a movie producer, except that it is a little too improbable or sappy. The firm was founded by four Jewish lawyers who were not allowed entry to the establishment firms of their day: White Anglo-Saxon Protestant firms.

Despite its beginnings, some feel the firm’s change-averse culture has contributed to a lack of diversity.

Two years ago, one lawyer pointed out Wachtell had more partners named David than there were women partners.

“Over time, the partnership is adding more and more women and more diverse people and I think it is not where any of us want it to be,” says Jodi Schwartz, the head of Wachtell’s tax department who has been a partner since 1990.

“I think everyone wants more. No New York law firm is there yet,” she says. It’s hard because of the societal pressures of it. It’s a hard profession.”

Emily Johnson, a senior associate from North Carolina, created a women’s workout group so that the firm’s women lawyers can bond over a Fly Wheel session every Friday morning.

“Wachtell is not a place, in my experience, where you find work life balance,” says Johnson. “But you find work, life integration. And women’s workout was a way to do that.”

Wachtell has long had a reputation of being one of the hardest working law firms in New York City. One associate at a competitor firm calls it a “black hole.” But others within Wachtell downplay the reputation, saying they doubt the workload is much worse than other law firms handling large M&A.

Talk to Matt Levine, a Bloomberg columnist, who lasted less than two years at the firm as an associate before the 100 hour work weeks became too much. In 2007, Levine quit and found a job that offered a better lifestyle: an investment banker position at Goldman Sachs.

“You never left the office; it was all you did,” says Levine of Wachtell. “You’re there at 10 o’clock every night and so is everyone else. I might have lasted had my body not physically broken down.”

The Glass Tower

At the bottom of the glass tower outside Lipton’s office is an inscription, dated June 22, 2011, which reads: “To Marty, Our Visionary Leader, Role Model, Mentor and Friend, With Great Affection and Admiration on Your 80th Birthday.”

One floor above Lipton’s corner office on the other side of the building, Dan Neff recalls giving Lipton the glass tower as a gift seven years ago along with other firm partners.

Neff’s office is full of mementos of his own. On one wall there are bounds of stacked legal papers, photos of his family, including his wife of 40 years, and a framed piece of paper that says, “pa ∙ tience,” defining the noun as “the ability to tell someone to go to hell in such a way that they actually look forward to the trip.”

“We still have the anxiety of a relatively new firm,” he says. “That, ‘Gee, what if this year isn’t going to be so good?’”

“Up to a point, anxiety can be highly productive. We think it is here.”

Neff, a graduate of Brown University who has a J.D. from Columbia Law School, speaks with a nonchalant tone, like not much gets him riled. He is among the firm’s top performers, representing Allergan in its defense against a hostile takeover bid by Valeant Pharmaceuticals and its $66 billion acquisition by Actavis plc.

By his account, the firm’s generational transition has gone well and partners spanning multiple generations already execute the firm’s marquee deals.

Though Neff didn’t name names, the firm’s deal list shows partners in the generations below him and Herlihy taking on significant work. Adam Emmerich is representing T-Mobile in its merger with Sprint. Andy Nussbaum represented Salesforce in its acquisition of MuleSoft. Meanwhile, David Karp and Ronald Chen represented Broadcom in its $18.9 billion all cash acquisition of CA Technologies.

When partners fail to perform at the upper end of Wachtell’s lockstep system, Neff addresses the issue with upfront communication, telling partners they aren’t cutting it, he says.

“Is it a fun conversation? Or easy to have?” he says. “No. But as we’ve gotten older, it’s easier to do than it used to be. Never easy. But easier.”

Firm Future

One can only speculate what Wachtell will look like in five to 10 years. But its attorneys continue to advise boards of directors and remain involved in their biggest matters. In CBS’s critical moments – through The New Yorker coverage of Moonves, revealing allegations of sexual harassment against him spanning decades, all the way up to his ouster – Lipton, and other Wachtell attorneys have been called upon as advisors to the board of directors during the turbulence.

The CBS Broadcast Center stands in Manhattan on September 13, 2018 in New York City. The popular television network has been under scrutiny since allegations of sexual misconduct forced out executive producer Jeff Fager and chief executive of CBS Les Moonves. (Photo by Spencer Platt/Getty Images)


Lipton declined to comment on the matter. And a CBS spokesman declined to comment on Wachtell’s role.

“I don’t think Marty has any desire to do anything else but what he is doing,” says Jimmy Dunne, senior managing principal of Sandler O’Neill + Partners. “But when that time comes, when he no longer is doing it, I think the firm is in incredibly good hands. Ed Herlihy and others are at the top of their profession. One of Marty’s great strengths is that he has elevated people around him and hired the right types of people and they are a very cohesive unit.”

Says Scott Bok, chief executive officer of Greenhill: “Even 35 years ago when I was looking to be a summer at Wachtell in ’83, my peers in law school would say, ‘Why would you go to Wachtell, given the bigger New York law firms? It’s so dependent on Marty Lipton?’”

“I just saw Marty the other night and he’s still going strong. But the firm has developed into something that is so far beyond him. If they lost Marty for some reason five or ten years into the history of the firm, that would have been a huge loss. You have to realize today, the firm has diversified the number of partners they have, the specialties they have, and I think it will just continue on with the very great success it has had into the future, whenever Marty is finished,” Bok said.

Yet beyond his connections and the dollars and cents tied to his name, are Lipton’s values.

Consider the path of Jesus Varela, a systems technician at Wachtell who has worked with the firm for 30 years. He sat with Bloomberg Law for an interview about his time with the firm and what follows is his account.

Varela was first hired in 1988, a time when he was a troubled 19-year-old growing up in a rough part of Brooklyn. Just weeks after joining the firm, his brother was kidnapped and killed by drug dealers. When Varela didn’t show up for work without explanation, he thought he would be fired, but instead, he received a call from his manager who offered her condolences and said he could return to work whenever he was ready.

The firm, he says, helped get him off the streets, where he had once wielded a gun in a shootout with gangs trying to rob his father’s grocery store. Several women at Wachtell taught him how to save his money and move to a safer neighborhood in Queens to raise a family. Because of this, he likes to say that the firm saved his life in more than one way, and that the women at Wachtell taught him how to be a man.

His gratitude only grew when he suffered a heart attack in April, and Lipton’s secretary – as she does with any firm member – made arrangements for him to be transferred to NYU Langone Medical Center, where he received treatment from some of the best cardiologists in the country. (Lipton was chair of NYU’s board of trustees, and a plaque hangs on the wall, thanking him for years of contributions).

After Varela recovered and returned to work, he felt compelled to write Lipton a thank you email. Upon receipt, Lipton called Varela into his office, so that they could meet face to face. He asked how they had treated him at NYU. Varela just continued to thank Lipton profusely.

“The firm has gotten big over the years,” Varela said Lipton told him. “But I know who the good people are here.”

“I know who the loyal people are.”

Reached about the exchange, Lipton didn’t question Varela’s account. But through Neff, he said the firm takes care of all its people.

To contact the reporter responsible for this story: Casey Sullivan at sullivan.caseyp@gmail.com

To contact the editor responsible for this story: Tom P. Taylor at ttaylor@bloomberglaw.com