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Financiers Andre Meyer and Felix Rohatyn made investment bank Lazard Freres into a major force in global finance. But in recent years, the firm has lost some of its prestige as its strong global market share in mergers and acquisitions has been challenged. On Nov. 15, Lazard announced that Michel David-Weill, chairman of Lazard's executive committee, will be succeeded in January by Wall Street dealmaker Bruce Wasserstein, 53. Wasserstein's title, literally, is "Head" of Lazard. David-Weill will remain chairman of the board of Lazard.
Wasserstein's job will be to restore Lazard to its former vaunted position. What's the plan? Hours after the announcement, Wasserstein spoke with BusinessWeek Investment Banking Editor Emily Thornton. Here are edited excerpts from their conversation:
Q: How will you and David-Weill share responsibilities?
A: There is no sharing. I have complete authority except that he's chairman of a board that has the right to veto a merger. Having said that, I look forward to his advice. I'm not threatened by it. And he wants to be helpful. [He knew] the only job I would be interested in is his job. He has known that for a while. It was just a decision on his part.... It was up to him, and that's why the offer was attractive.
Q: Will you be hiring a chief executive officer?
A: We're in the early stages. Ask me in a couple of months, and I'll tell you.
Q: What's your strategy for fixing Lazard?
A: To be focused on three things: Clients, clients, clients. I think that's the opportunity at Lazard. That's the plan.
Q: There's a perception that Lazard's biggest problem has been its failure to integrate its operations in New York, London, and Paris.
A: I'm not worried about that. The fact is there is a different client base in Britain and France. The opportunity is the internationalism of the place. Someone who is smart about it can harness the diversity of the institution and yet bring it together. My style is to be revenue- and client-focused.
Q: Given today's brutally competitive environment, is it still realistic to expect an investment banking boutique such as Lazard to gain the same preeminence as a full-service investment bank?
A: My objective is to offer people the highest quality advice. Otherwise, you don't have a reason for existence. If you're only as good as some behemoth, people will use that firm.
My focus will be on creating a culture of excellence in client service and developing client relations, wherever they may be. There's a good opportunity in transatlantic business. Remember, Lazard also has a strong reorganization practice, which offsets [some of the effects of the brutal environment].
Q: Who first approached you about becoming the head of Lazard? And when?
A: This is the outgrowth of the friendship that Michel David-Weill and I have had for 15 years. Episodically, he would try to get me to join. Before, the occasions weren't right, or the opportunity wasn't right. But everything [this time] was in alignment, and the opportunity was compelling. The first approach was in 1987. The last one was in 1997. Since last August, a lot of [firms] have approached me. But the big event was that Michel decided he wanted someone to replace him as head.
Q: These days, most Wall Street firms are concerned about their cost structures. They're tearing up multiyear agreements and laying people off. Is this your plan?
A: Anyone is going to be a disciplined manager. But the focus is on polishing Lazard's culture of preeminence and excellence and focusing on the client. If you do a good job [at Lazard], it has been proven you'll do fine. [Since it's a private partnership] Lazard doesn't have the quarter-to-quarter problems that other firms do. Being small and dexterous has its advantages as well as its limits. You're not paying for the large research departments or lots of people who don't contribute that much in terms of quality.
Q: There is a perception that you have been brought in to Lazard to dress the firm up for a sale. What is your response?
A: It's not a subject I'm focused on. If you were brought in, you'd make sure it's running as well as it could be running, so that's what I'll do.