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Tombstones: A Lawyer's Tales from the Takeover Decades.

Tombstones: A Lawyer's Tales from the Takeover Decades. Lawrence Lederman. Farrar, Straus, and Giroux, $24. As a partner at Wachtell, Lipton, Rosen & Katz, the high-powered New York law firm, Lawrence Lederman had a hand in some of the largest corporate deals of the last 15 years. He helped sell Stokely-Van Camp to Quaker Oats, auctioned Macmillan to Robert Maxwell, and unsuccessfully defended West PointPepperell from a ruinous takeover by William Farley. His toothless memoir is peopled by the usual suspects. Henry Kravis crafts leveraged buyouts, Bruce Wasserstein dickers with bidders, Robert Bass triggers a takeover, T. Boone Pickens artlessly tries to charm an opponent, and Michael Milken hovers in the distance. In the midst of it all, corporate plenipotentiary Lederman confers with boards of directors, fields late-night phone calls, and rushes out onto the tarmac to catch the next private jet.

For all the reconstructions of critical meetings and board room faceoffs, this book is oddly equivocal; Lederman fails to give us much of a sense of how he feels about it all. Before long, one high-stakes deal begins to look much like the next. It's as if Lederman believes the mere presence of these titans of finance is enough to sustain the narrative. The moral of this tale is similarly muzzy. Lawyers are agents for change, Lederman says. But, alas, change in the corporate arena "isn't always for the best. And there are considerable costs." Unfortunately, Lederman never says what these costs are, aside from a few moguls being forced out of corporations they either built or inherited.

The underlying story is Lederman's own climb up the class ladder. Educated at humble Brooklyn College, he worked his way into New York University law school and landed a job as a California supreme court clerk in 1966. When he ascended to Cravath, Swaine & Moore (the archetype of law firm prestige and power), a fellow clerk teased that by going to work on Wall Street, Lederman risked becoming "a United Fruit fascist bastard." Once at Cravath, he wound up working on a deal for-wink, nudge-United Fruit. Tutored by the sages at Cravath, the budding legal eagle moved to Wachtell, Lipton, and made partner just as the merger and acquisition era dawned. Eventually, Wachtell emerged as the preeminent firm representing managements against hostile raids. The thirst for its expertise became so great that its lawyers began billing like investment bankers, abandoning hourly rates in favor of fees based on the size of the deal, with bonuses for favorable results. While Lederman coyly notes that the firm's alliance with managements "proved very successful," he never offers the crass reality-that by some estimates, he and his cohorts each pulled down more than $1 million a year. Just so readers know he isn't a total greedhead, the author devotes a chapter to his pro bono work for Phoenix House, a New York residential treatment program for drug addicts. Asked to persuade a bank to forgive a loan to a drug treatment center Phoenix House sought to acquire (even nonprofits weren't immune to the empire-building craze), Lederman phoned a friend at Cravath who represented the bank and wrangled the release. We're assured that this is not an instance of legal old-boys trading favors. Rather, asserts Lederman, his friend merely assessed the bank's legal position and conveniently found it untenable. "That is the way lawyers always deal with each other," Lederman explains. "Without my saying anything, he knew it was best to be gracious. That's the way all cases are settled." Perhaps. But if Lederman were as genteel as all that, he wouldn't have made partner at Hyatt Legal Services, let alone at one of the most competitive firms in the country.

Lederman also supplies a blithe version of the convulsion at Wachell when partner Ilan Reich confessed to his role in Dennis Levine's insider trading ring. Reich was the second Wachtell partner in five years nailed for insider trading. Lederman had not only helped train the hapless Reich, but also hired the other partner nabbed for insider trading, Carlo Florentino.

Shaken by Reich's exposure in 1986, Wachtell chieftain Martin Lipton asked Lederman if the firm was somehow responsible for Reich's errant ways. Ever politic, Lederman assured him that Wachtell, Lipton was not culpable, although he admits to readers that the denial of responsibility continued to trouble him.

Lederman's explanation for the behavior of his fallen comrades is distressingly muddled. Since neither lawyer used the profits of his illegal trades, he asserts that "fear of failure," not mere greed, was the link between the two disgraced counselors. "If success eluded them, they would seek money to cushion the loss," Lederman writes. "Ironically, the firm offered both of them success, the antidote to their fear."

The author seems to believe that if only the two had waited for the grace conferred by partnership, they never would have strayed from the flock. But Lederman's facts contradict that contention. He notes that Florentino dabbled in illegal trading before arriving at Wachtell. Reich, he says, never trusted the firm to make him a partner, and he coveted the friendship of conartist Levine. To the jaundiced eye, it would seem that each man was doomed from the start, and the blandishments of a Wachtell partnership would not have made a difference. In an environment where one's worth is measured by the number of digits in a deal, it's not surprising that characters like Florentino and Reich sought a modicum of satisfaction and control elsewhere.

As unreflective-and unsatisfying-as his book may be, Lederman is still the first lawyer of his ilk even to attempt such a chronicle of the frenetic dealmaking of the eighties. Until Martin Lipton publishes his diaries, Tombstones will have to suffice as the fullest personal account of what it was like to act as a croupier for the shuffling of the country's assets. For readers obsessed with the arcana of transactions, it may be worth an afternoon's perusal.

James Lyons
COPYRIGHT 1992 Washington Monthly Company
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Author:Lyons, James
Publication:Washington Monthly
Article Type:Book Review
Date:May 1, 1992
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