Bruce Wasserstein: Deal King Lawyer?

Name any mega-deal in the last three decades, and there’s a good chance Bruce Wasserstein had a heavy hand in it.  Wasserstein, who died last Wednesday at the age of 61, served as Chairman and CEO of the financial firm Lazard since 2005 and was a lawyer at Cravath, Swaine and Moore in New York before he became a major Wall Street investment banker and owner of media properties such as New York Magazine.  Previous to joining Cravath in 1971, Wasserstein earned a joint degree from Harvard Business and Law Schools and studied British mergers during a fellowship at Cambridge. 

Dubbed “Bid ‘Em Up Bruce” for his tendency to stay in deals to the bitter end, The New York Times said that Wasserstein “reshaped the mergers and acquisitions business into a high art.” But he also had his critics. Among the flurry of obituaries came this jab from a Reuters columnist:

“Wasserstein was the driving force behind some of the worst deals of recent history. They generated vast fees for the banks he ran, but frequently failed to create any value for the shareholders who were ultimately paying them. Too many among the $250 billion of deals he squeezed through have proved to be lemons.”

At the time of his death, Forbes estimated his personal worth at $2.2 billion, making him No. 147 on the magazine’s list of wealthiest Americans.

But all the media coverage got us wondering. Was Wasserstein the king of the deal kings?

Add up all the categories Biter Lawyer considers, and you make the call…

The Benjamins

According to widespread reports, the combined value of deals Wasserstein had his hand in totaled as much as $250 billion. To put that in perspective, that’s equal to the initial spending limit for the $750 billion TARP program. In other words, real money.

But if measuring the total value of deals associated with Wasserstein isn’t your style, try this one on for size: The Wall Street Journal reported that Wasserstein’s death triggered stock options in his name that are valued at $188 million. According to the WSJ, that revelation “confirm[s] Mr. Wasserstein’s status as one of history’s most highly paid investment bankers.”

More Than Money

For i-bankers, the name of the game is money and nothing else. But a small handful have made their careers about more than making money, hoping to be known as titans outside the world of finance.

Did Wasserstein succeed? Here’s what Slate’s Daniel Gross wrote:

“He sometimes seemed more of a New York intellectual than a Master of the Universe. His early résumé was identical to that of many New Republic editors: He edited the Michigan Daily in college; went to Harvard Law; wrote an impassioned, anti-establishment book with fellow Naderite Mark Green; and studied at Cambridge University. After he made it big as an investment banker, rather than writing a How-I-Made-My-Gazillions memoir, he put together a 820-page treatise on corporate transactions: Big Deal: The Battle for Control of America’s Leading Corporations.”… He also became a financial backer of quality New York journalism. Wasserstein bought the American Lawyer in 1997 and founded a solid magazine devoted to covering the M&A industry, The Deal. In December 2003, he acquired New York Magazine, and installed a team that made it great again. (Disclosure: I wrote more than a dozen articles for New York after its acquisition by Wasserstein.) He did so not out of a desire to have his own platform or a column—a la Zuckerman—but with the intent of making excellent journalism into real businesses. (Wasserstein sold the parent company of American Lawyer in 2007.)”

One famous editor who worked under Wasserstein’s ownership, the Peabody-award-winning Kurt Anderson, who co-founded Spy Magazine, told Reuters, “he was hands-on in a way that an owner should be hands-on, but not hands-on in the way that, frankly, amateur owners often are. That is to say: meddlesome and trying to protect their friends.”

Philanthropy

It seems a little counter-intuitive to us, but one of the things uber-rich people do is give their money away.  Wasserstein was no exception, and one of his donations, a 2007 gift to his alma mater Harvard Law School, caught our eye. Harvard Law School, which is using the money to erect a building in Wasserstein’s name, called the gift “the most ambitious building project in the history of the law school,” while The New York Times pointed out that Wasserstein tied Arthur Samberg, chairman and chief executive of the hedge fund Pequot Capital Management, who gave the same amount to Columbia Business School.

So what would $25 million get you at Harvard, besides a building with your name on it? Well, with tuition in the neighborhood of $41,500 (not counting extras like books, beer, housing and outlines) Wasserstein’s gift still would have been enough to pick up the tab for about 600 students, which is roughly the size of Harvard’s first-year class. So keep that in perspective. With the stroke of a pen, Wasserstein could have sent 600 students to Harvard Law. Not bad.

Buzz

People always say nice things about you when you’re gone, and there was no shortage of Wall Street types calling Wasserstein the smartest guy in the room. But our favorite quote about the mogul comes from his sister—Pulitzer-prize-wining playwright Wendy Wasserstein—who wrote in New York Magazine that their mom was convinced Bruce had “messiah potential.” As for Wendy, she just called her brother a “genius.”

Influence

Here’s a sign that you’re big—really big—in the financial world: Your death has the ability to move the share price.

In heavy morning trading, Reuters reported that shares in Lazard dropped by about five percent. Of course, that was a deal too good to pass up, and the smart money bet on Wasserstein’s legacy—building one of the strongest investment houses ever. By the end of the day, the share prices had rebounded, gaining two cents per share.

That shouldn’t be a surprise. Consider this comment from Wasserstein’s friend, Martin Lipton, a partner at the law firm Wachtell, Lipton, Rosen & Katz.

“The thing about Bruce was his strategic vision of investment banking,” Lipton said Friday. “If you look around this banking world more than half of the people were either his partners or young associates.”

Enemies

It’s good to have enemies. In fact, some say the measure of a man is the enemies he makes. Wasserstein made some pretty powerful ones, but his biggest feud—aside from all the hostile takeovers—was his bid to control Lazard.

His Washington Post obituary ended with a quote given to Vanity Fair by Michel David-Weill, whose family had founded Lazard in 1848. Wasserstein had pushed Weill out of the controlling position at Lazard, and shortly after he said of Bid ‘Em Up Bruce, “He was afraid of sharing power and tried his very best—and succeeded—in expelling me.”

But Wasserstein didn’t just make enemies in the boardroom. Would you believe that Wasserstein left the world with three, count ‘em three, ex-wives? We’re not sure if having an ex makes you great, but from our divorce lawyer pals, it’s clear that any guy who can afford a fourth wife (yes, he actually tied the knot once more after striking out three times) plus father children with anonymous women in between clearly got it going on.

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Bitter Staff is a collection of current and former editors, contributors, and various other lawyers who have written for Bitter Lawyer over the years. Posts include interviews, contests, and other general lawyerly and bitter content.

11 Comments

  1. M&ADude;

    October 19, 2009 at 7:00 am

    I think that most of Bruce’s deals were overrated. They were about ego (his) and little else. In the long run, few of them created much in the way of shareholder value.

  2. Craig

    October 19, 2009 at 8:25 am

    The guy definitely lived a full life during his relatively short stay of 61 years.  Regarding the philanthropy aspect, that is a joke.  I would not consider it charity to give money to a school, who already has more money that it knows what to do with, to buy a building with your name on it.

  3. BL1Y

    October 19, 2009 at 8:25 am

    What’s the importance of the total value of deals he “had a hand in”?  Are these deals where he was actually the decision maker, or just anything where he had a seat at the table?

  4. Devil's Advocate

    October 19, 2009 at 9:01 am

    Craig, I agree with you. But don’t you think that it’s fair to count as philanthropy anything that counts as a charitable donation by the IRS? Seems like a decent legal standard to me. Maybe not the best human standard, but donations to a law school are philanthropic. Maybe it’s just not what you think of when you think of giving to others.

  5. Craig

    October 19, 2009 at 9:12 am

    Devil’s Advocate, legally, I definitely agree that it should be considered charity, or philanthropic.  But Bitter Lawyer would probably not be one of my favorite websites if I thought the law was the end all be all for answers in the arena of human morality and goodwill.  In my personal opinion only perhaps, I think buying a building for Harvard Law School, so you can put your name on it, is more of an arrogant, grandiose display of wealth and power, than anything approaching goodwill.  There are plenty of law schools that actually need that kind of money.  Where the money would have a real impact.  Giving money to Harvard is like the rich giving gifts to the rich, at best.

  6. Craig

    October 19, 2009 at 9:19 am

    Just to be clear, I have no problem with Wasserstein giving his money to Harvard, or doing whatever he wants with his money for that matter.  I just have a problem with it being considered philanthropy.

  7. BL1Y

    October 19, 2009 at 10:30 am

    Craig: The reason it’s in the article though isn’t because it’s a generous act.  It’s evidence of him being King of Deals because he can spend that much money just for a nice little trophy.

  8. Craig

    October 19, 2009 at 10:34 am

    Good point BL1Y.  I guess it was mentioned for the very reason that it bothered me.

  9. Doug

    October 19, 2009 at 2:45 pm

    Guano, No lady would have your wing-ding.

  10. Lady lawyer

    October 19, 2009 at 4:04 pm

    Bravo Doug!

  11. EngineerdLawyer

    October 23, 2009 at 9:53 am

    I like “philanthropy” too. You can buy a lot of legacy buildings and scholarships named in your honor.

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