Wachtell’s headquarters at the CBS Building in Manhattan. (Photo by Adam Kuban)
It’s one of the truly rare events in the realm of elite law firms. A partner leaves Wachtell, Lipton, Rosen & Katz.
After 14 years, Jeremy Goldstein bid adieu to the Black Rock, the CBS Building in midtown Manhattan that has been the longtime headquarters of Wachtell, where he served as a partner for the last six years. Goldstein left the firm three weeks ago to start his own practice.
Speaking with The Am Law Daily by phone on Friday afternoon, Goldstein says he began his career at Shearman & Sterling, working at the firm for all of nine months before heading over to Wachtell. The 260-lawyer firm, as usual, had the country’s highest profits-per-partner last year at nearly $4.8 million, according to The American Lawyer’s most recent Am Law 100 reporting.
And thus the $4.8 million question—why did he leave?
Goldstein, who worked in Wachtell’s executive compensation practice, is no stranger to big numbers. He attributes his decision to leave the gilded throne atop The Am Law 100 to a desire to do something more entrepreneurial, as well as to gradual changes in the financial services industry that led him to believe that running his own firm would be more beneficial to his practice long-term.
“I loved Wachtell, I owe so much to it and the people there,” says Goldstein, 40. “But I had the opportunity to run my own business, and so far it’s been going gangbusters.”
As Goldstein explains it, within the past two years there has been a “trifurcation” of the executive compensation work that lawyers at his level handle for clients, be they the compensation committees of corporate boards, a company’s independent managers, or the general corporate counsel that outside firms like Wachtell provide to companies themselves.
Partly because of new rules stemming from the Dodd-Frank Act, which requires the disclosure of certain outside advisers, and the rise of activist investors—the nemesis of Wachtell and its cofounder Marty Lipton—that have put increased scrutiny on corporate boards, it’s become harder for large firms to handle work for compensation committees, as well as a company’s general corporate work.
“Some have taken issue with the folks that set the pay also being hired by management,” says Goldstein, who while at Wachtell wrote memos on director compensation. “I don’t have a position on it one way or the other, but that’s the reality.”
As a result, the compensation committees of many top companies that Wachtell represents have sought to hire their own independent counsel. While Wachtell had been willing to handle that work in the past, Goldstein notes that the firm is first “an M&A shop,” so it didn’t want to risk losing the lucrative transactional work that fuels its annual rise to the top of the Am Law 100 rankings.
Goldstein says concerns about conflicts of interest put constraints on “two-thirds” of his practice. By setting up his own shop, which is called Jeremy L. Goldstein & Associates, LLC, he says he can now take on work that top Wall Street firms such as Wachtell, Sullivan & Cromwell and Simpson Thacher & Bartlett don’t want to recommend to one of their competitors. With outposts in Manhattan and Greenwich, Conn., Goldstein’s small shop isn’t a threat to larger rivals wary about referring work elsewhere that could jeopardize their future relationships with a client.
Since starting out on his own earlier this month, Goldstein says he’s already been taking on a “new matter every other day,” a workload that could force him to start hiring his own staff. For the time being, Goldstein says he has people he can call upon on an “as needed” basis.
Asked what his former Wachtell colleagues thought of his decision to leave the firm, where partners don’t usually leave of their own volition, Goldstein laughed, noting that they were “very supportive” and will remain “lifelong friends.” He cites Lipton and executive committee cochair Edward Herlihy as mentors, along with Adam Chinn, a former Wachtell executive compensation partner known for creating the “Chinn Up,” a rich compensation package for top corporate executives.
Chinn left Wachtell in 2007 to join boutique investment bank Centerview Partners, a move that The American Lawyer reported at the time led the firm to make a truly rare lateral hire of its own by poaching Michael Segal from Paul, Weiss, Rifkind, Wharton & Garrison. Segal’s hire—only the third partner hire from outside Wachtell in the firm’s history—was also prompted by the departure of executive compensation partner Michael Katzke to pursue a career in social work.
In 2009 Katzke returned to the law by joining the firm of prominent executive compensation expert Joseph Bachelder III. The Bachelder Law Firm eventually disbanded in 2012 when its namesake joined McCarter & English, and Katzke now has his own New York firm called Katzke & Morgenbesser.
In more recent years, Wachtell saw M&A partner Gavin Solotar leave the firm in 2012 to become managing director and general counsel at Greenhill & Co., another boutique investment bank, while partner David Bryan retired in early 2013. Earlier this year Stephen Gellman, a Wachtell real estate partner, passed away at 56. His death came four years after M&A partner Craig Wasserman died at 49 after a long battle with brain cancer, according to our previous reports.
As for Goldstein, he says he’s looking forward to coping with the challenges of establishing his own practice, which will focus on negotiating employment agreements for CEOs and other C-suite executives. And with plenty of work in Manhattan to keep him busy, Goldstein knows it’s only a matter of time before he sets foot in the Black Rock again. It might even seem as if he never left.