“Marketing” at Wachtell, Lipton, Rosen & Katz

The American Lawyer published the 1995 results of its annual “Am Law 100” survey and the survey reported that Wachtell, Lipton, Rosen & Katz had reclaimed the top spot in revenue per lawyer and profit per partner and had grossed $990,000 per lawyer – over $200,000 more than the second place firm.

Summary of “Marketing” at Wachtell, Lipton, Rosen & Katz
The American Lawyer published the 1995 results of its annual “Am Law 100” survey and the survey reported that Wachtell, Lipton, Rosen & Katz had reclaimed the top spot in revenue per lawyer and profit per partner and had grossed $990,000 per lawyer – over $200,000 more than the second place firm.

Ⅰ. Early History Wachtell, Lipton, Rosen & Katz (Wachtell Lipton) opened its doors in 1965. The founders were determined that their firm be an old-fashioned partnership rather than a business. They wanted to avoid hierarchy and to promote a congenial and egalitarian working environment and focused on excelling in a few select areas: corporate law, tax, antitrust, creditors’ rights, and litigation. Wachtell Lipton quickly established an excellent reputation. They successfully handled a law suit for Lipton’s friend’s firm which is the most prominent Wall Street investment firm. As a result, they did a lot more legal work for this firm, and this firm recommended them to its clients.
Ⅱ. Operating Principles Wachtell Lipton thrived over the following three decades. Largely through an iterative process, it developed a set of operating principles that differentiated it from other corporate law firms:
a. Case Selection and Innovation The matter-by-matter policy turned out to be a key competitive advantage. Wachtell Lipton attained the founders’ goal of avoiding routine legal chores. The firm could afford to be highly selective, for even in a slump, clients offered at least twice as many cases as it could handle. The firm preferred cases that involved new, challenging, and high-profile issues. The firm prided itself in its willingness to risk litigation in order to sustain the innovations that it believed would accomplish its clients’ objectives. b. Staffing and Growth Wachtell Lipton was the smallest law firm of the “Am Law 100.” It employed 140 lawyers and about 350 support staff in 1995 and had only one office. When need be, it worked closely with firms in other cities.
The firm limited its recruiting to top candidates from top law schools, and in an effort to preserve its unique culture, it prohibited lateral hiring. No one was hired or retained unless he or she was expected to become a partner. One partners described the firm’s typical lawyers as “wildly self-motivated, extremely self-confident and brighter than almost everyone.” Wachtell Lipton preserved a one-to-one ratio. The relatively small size of the firm combined with the unusual associate-to-partner ratio allowed associates to take on substantial responsibilities right away, to work with partners directly and informally, and to enjoy the satisfaction of meaningful client contact at an early stage in their development.
c. Compensation The compensation system reflected the egalitarian culture of the firm. It was intended to ensure that the firm’s success was shared equitably with all who made it possible.
d. Billing Contrary to most other law firms, a client’s final bill depended not only upon how much time the case took but also on such factors as the intensity of the firm’s efforts, the magnitude of the issue at hand, the complexity of the matter and the result achieved.
e. Work Ethic Clients were paying high prices for immediate results of premium quality, so every situation was treated as a crisis. The firm’s operations are geared to the needs of its practice-twenty-four-hour-seven-day full service; always prepared to do a deal, or do whatever on an overnight basis. The very close personal relationships among the lawyer means that whenever there is a need, there are volunteers to help. We treat one another like family.
f. Task Force Approach Wachtell Lipton was loosely organized into six practice groups: litigation, corporate, creditors’ rights, tax, antitrust, and real estate. The firm approached all matters on an interdisciplinary task force bases. Each case was tackled by a group of lawyers drawn from a variety of practices. The task force approach was one of the firm’s major competitive advantages.
g. Coordination and Control The firm is not a business; it is an old fashioned professional partnership. It is about handshakes among friends. This may be at the cost of structure and efficiency, but from the client’s standpoint, it means the work is done in the best and fastest way possible.

Ⅲ. The Successful 1980s Wachtell Lipton became one of the country’s most prestigious and profitable law firms by defending companies targeted for takeover. The firm’s achievements were largely attributed to Martin Lipton’s 1984 invention of the share purchase rights plan-popularly dubbed the “Poison pill.” In 1985, Wachtell Lipton successfully defended a prototype of the pill on behalf of Household International, Inc. before the Delaware Supreme Court. Hundreds of companies then adopted pills of their own. A prominent New York lawyer called the poison pill “the single most important development in corporate law in the past ten years.” Through the latter half of the 1980s, Wachtell Lipton played a central hand in such high-profile deals. Wachtell Lipton became the premiere choice for blue-chip managements besieged by hostile bids, and it repeatedly produced the highest revenue per lawyer and profits per partner of any firm in the “ Am Law 100.” Ⅳ. “Marketing” the Firm
Lipton indicated that his firm actually did carry out some activities aimed at building the firm’s reputation. What is marketing about for us?
- It is largely about exposing its expertise to inside general counsels. It is critical that our firm is viewed as having specialties in a few areas.
- Board room credibility is another very important aspect of marketing. The more board rooms you appear in, the more directors you meet, and you know most directors of major companies.
- Marketing is about making sure we have a solid reputation with investment banks. An investment bank can mean disaster if it doesn’t think you have the ability or credibility. It will go a long way to convince its clients.
- Finally, marketing is about the crop of geniuses we hire every year-not only because their extraordinary talents contribute to the quality of our output, but also because our young lawyers have an important role to play in building and maintaining relationships.