Liz’s view
The downfall of the most powerful managing partner at one of the world’s most powerful law firms isn’t really a story about Jeffrey Epstein. Chummy emails with the wealthy sex offender were the proximate cause of Brad Karp losing his seat atop Paul Weiss, but the distal cause is a problem we’ve all got: overexposure to private equity.
Karp came to know Epstein through his legal work for Leon Black, the co-founder of Apollo Global Management. Apollo wasn’t just a client; it was Karp’s vehicle to take Paul Weiss from a respected but niche New York litigation shop to a dealmaking juggernaut.
In 2011, Karp lured a group of partners with deep hooks into Apollo and added more from rival firms and Apollo’s own legal department. Paul Weiss papered Apollo’s aggressive tactics in the world of distressed debt and added debt-financing experts in London and California to provide round-the-clock service. By 2019, Paul Weiss was earning a reported $100 million a year, in addition to fees from advising Black’s family office, Elysium.
That courtship brought Karp into Epstein’s orbit, and their correspondence — which shows Karp helped Epstein protect his plea deal on sex-trafficking charges and sought the billionaire’s help getting his son a job on a Woody Allen set — ended his 18-year run atop Paul Weiss when they were released by the Justice Department this week.
Would Karp have workshopped a legal brief for a convicted sex offender unconnected to his law firm’s most important client? We’ll never know, but I doubt it.
Paul Weiss isn’t alone in its reliance on private equity. Simpson Thacher built its business on work for Blackstone and KKR, Kirkland & Ellis on Bain Capital. These firms now pay their rainmakers like Wall Street stars and have dropped their courtly scruples for relentless commercialism.
But of course, this is hardly just about New York lawyers. Indeed, the American economy looks more and more like Big Law, overtorqued toward financial firms that are pushing into our retirement accounts, buying up our ophthalmologists and car washes, and are becoming the largest indirect employers in the country. Even our sexual predators work for private equity now.
Notable
- The latest batch of files released by the Department of Justice on Friday reveal Epstein’s intimate ties to “executives, doctors, lawyers, and dealmakers at the tops of their fields,” The Wall Street Journal wrote, demonstrating how the late sexual predator “traded on his connections to amass wealth and powerful friends.”