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Lazard chairman Michel David-Weill may be about to lose control of the storied partnership his great-grandfather co-founded -- a predicament he largely brought on himself. But given the chance to turn back time, he tells Institutional Investor, he wouldn't change a thing.
It was April 1997, and Lazard Freres & Co. stood atop the banking world -- an undisputed global leader in corporate mergers and acquisition advice, its specialty. In a market dominated by ever bigger and more global enterprises, the small, secretive partnership had doggedly earned its place in the rarefied upper echelon of deal makers.
Yet for all its sense of triumph, Lazard had reached the end of the line. And no one knew it better, or felt it more palpably, than its chairman, Michel David-Weill, the great-grandson of one of the French emigres who in 1848 founded Lazard as a store selling blankets, shovels and other goods in New Orleans. The problem was leadership, or the lack thereof -- and more precisely, the lack of a clear-cut successor to the imperious David-Weill, who had led the firm for two decades.
His efforts to cultivate an heir appeared inconsistent when not indifferent. In truth, though 64, he did not wish to relinquish, Lear-like, his authority to anyone. But his ability to hold together the firm's famously fratricidal houses in New York, Paris and London was ebbing. And though he held the power, he did not drive the profits. That distinction belonged to a handful of bankers led by New York eminence grise and deal maker par excellence Felix Rohatyn, who would soon leave to become U.S. ambassador to France. And David-Weill's effort to maintain a century and a half of family control had just come undone when his son-in-law, Edouard Stern, abruptly left the firm after feuding with him. (David-Weill's four daughters had no interest in following him into banking.)
So it was that on a fateful spring day, David-Weill summoned his partners to a hastily convened meeting in a conference room in the firm's shabby offices on the 60th floor of 30 Rockefeller Center to lay out his vision for the future of Lazard. With his signature Cuban cigar, an Hoyo de Monterrey Epicure No. 1, wedged between his fingers, David-Weill...