Law Firms

As Martin Lipton Turns 80, Legal Observers Speculate on Changes at His Firm

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Martin Lipton is celebrating his 80th birthday today, raising questions about how his Wall Street law firm will change when he eventually leaves.

Lipton, a founder, rainmaker and mergers partner at Wachtell, Lipton, Rosen & Katz, has been handing high-profile deals to younger lawyers, the Wall Street Journal reports. Meanwhile, 64-year-old Edward Herlihy and 58-year-old Daniel Neff are handling most of the management work.

Retired New York University business professor William Starbuck says the firm’s business model may change when the next generation takes over. Wachtell has just one office, in New York. Its partners do most of the work rather than handing it off to teams of junior lawyers. The firm shuns hourly billing in favor of charging by the case. And the partners are paid on a lockstep compensation system tied to seniority. The system is apparently working, at least by one measure—its profits per partner last year were $4.3 million, more than any other law firm.

Neff tells the Wall Street Journal he expects the business model to remain the same. “We don’t anticipate changes to the firm’s approach to the practice of law, structure or values,” Neff says. “These are the things that have made the firm successful.”

He also expects any transition will be smooth. “Because Marty is so visible, so iconic and, frankly, so energetic, he and the firm are understandably viewed as inseparable,” Neff says. “But the primary business getters today are in other generations.”

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