The last tycoons: the secret history of Lazard Frères & Co (76 page)

She was appalled. "I told him to fuck off," she said. She knew from then on that she, too, needed to become more barracuda-like. She decided to get even, in her way. "I'm so frosted at this," she said. "This sleaze, his wife had a baby the week before. That's when I said, 'Screw this, get yourself on the French deal, he ain't going to last long anyway, the way the kid's behaving.' I didn't know about the other stuff at the time. I just knew this guy did not understand reality." Soon after the incident, when she saw Felix talking to one of the senior Renault executives in the thirty-second-floor hallway, she went up to them and, in perfect French, offered to help out on the deal. Grambling spoke no French. Next thing she knew she was on the deal and Grambling was gone.

She worked for several years on various assignments for Renault as it slowly acquired Mack Trucks--first Renault took a 10 percent stake, then 20 percent, then 40 percent, until eventually Mack became a wholly owned subsidiary of Renault. It was very touch-and-go and very hard work. She had no life outside the firm. She worked directly with Felix and with David Supino. After Renault increased its stake in Mack to 40 percent, in 1983, Lazard received a huge fee, something like $8 million, one of the largest fees in its history to that point. But Felix never thanked Gerowin for her hard work.

Of course, there was more insult. Once, Allan Chapin, then a partner at Sullivan & Cromwell, the law firm (years later Chapin was briefly a partner at Lazard), organized a closing dinner for a Renault-Mack deal at one of the private clubs on the East Side. But the club did not allow women as members, nor did it, incredibly, allow women to enter the dining room. When Gerowin tried to join the dinner, she was not permitted into the dining room. The matter greatly offended the CFO of Renault, for whom the dinner had been arranged. "He heard what was happening," Gerowin recalled, "and says, 'Renault is owned by the government of France, we are a fair and equal opportunity employer. We cannot have a to-do. So I will go and have dinner with Mina.'" So the guest of honor left the event and had dinner with Gerowin. "His answer to Chapin was,
'Il y a mille restaurants au New York.'
There are a thousand restaurants in New York. You schmuck. You had to put it in this one? So he and I went and had dinner and the rest of them went to Allan Chapin's dinner and the next morning I explained to George Ames what had happened at the dinner. I didn't realize that this guy also told Michel."

Michel decided that Lazard's honor had been impugned, and for a brief time Sullivan & Cromwell was in the penalty box with Lazard. But only for a brief time. "So did these things happen?" Gerowin asked rhetorically. "You bet they did. I told you, 'You just never let them see you cry.' Actually, things reached a point where I didn't even cry. I would just be seething, absolutely seething." She often felt she would be assigned work the male bankers didn't want to do. And there was also the problem that some of the partners did not want to work with a woman. "You'd walk into their office, and they'd go into a cold sweat," she said. The best it got for her, she explained, was when after she had done some work for Ward Woods, he managed to give her a backhanded compliment at the year-end review meeting. Gerowin was told that Woods said: "I don't know why she's here. I don't think we should have women here.... But you know what? If we've got to have them here, I gotta say she did a hell of a good job." Recalled Gerowin: "I can deal with a guy like that."

After Gerowin had been at Lazard for a few years, the firm decided to hire a second woman banker, Linda Pohs. Pohs had been working at First Boston. There was a partners' meeting where the subject of hiring her came up. Jim Glanville spoke up at the meeting. "Why are we firing Mina?" he said. "She's getting the hang of it. The work seems okay. I don't understand why you're firing her for some unknown." Another partner corrected Glanville's misimpression of what was going on. "So someone finally said, 'We're not firing Mina,'" Gerowin recalled being told after the meeting. "This would be a second woman. And Glanville's answer was, 'I thought the EEO meant we only had to have one.' This should set the tone for you."

In August 1985, Gerowin's brother was killed in an airplane crash. Naturally, this caused her to rethink her goals and how she wanted to spend her life. She had given her all to the firm for the previous five years and received little but grief in return. "It was so brutal," she said. "I mean, my brother's death made me realize, you know what? I need a life. I'd given these guys a life." The tipping point came a couple months later when Bill Loomis asked her to lunch. "You're not being very productive lately," he told her. "I say, 'My brother died two months ago. We're still trying to find the airplane and lift it.' This was off of Block Island, and this guy looks at me and says, 'That was two months ago.' And it was like a snap awakening." She left Lazard soon thereafter to head up the restructuring advisory effort at Dean Witter, the brokerage firm that would later merge with Morgan Stanley. One longtime partner recalled that Gerowin did have a difficult time at the firm, partially for reasons unique to her and partially for reasons related to the slow changing attitudes toward women on Wall Street. "From the beginning, she had an unhappy experience," he said. "She didn't get along with partners. Frankly, I think it was very difficult then to be a woman. But I actually don't think it was about her being a woman; it was more just her working relationships and the work. At the time, though, the firm was extremely chauvinistic, as was Wall Street."

Gerowin may have paved the way for other women bankers at Lazard, but their task was no less imposing. Linda Pohs left the firm before the decade was out and soon thereafter married David Supino. Michael Carmody--a woman--joined Lazard after Pohs but left before her, supposedly a victim of unkept promises and harassment from the likes of Jim Glanville, Luis Rinaldini, and Felix. When she was pregnant, a Lazard partner said to her: "Why don't you just go home and do what you do best and have your baby?" After she was fired by the firm and threatened to sue, Wachtell, Lipton was brought in. She was said to have received a $1 million settlement from the firm and has moved to South Africa.

Sandy Lamb came from Mutual of New York. Christina Mohr came from Lehman Brothers. Kathy Kelly came from First Boston and Rothschild. Jenny Sullivan, Mary Conwell, and Susan McArthur all joined. These women were part of the general hiring wave on Wall Street in the 1980s that even Lazard could not avoid, per Loomis's recommendations. "And while we were one of a group of people, they built that firm on our backs," Kathy Kelly said. "And it would have been nice to have shared in the rewards. And I don't believe that by and large we did." The business was rapidly changing from being one where white men met and solved the social issues of mergers to one where white men met to solve the financial and social issues. The new crop of hires was proficient in the use of the computer programs that did the analytical work of relative valuation and dilution. These analyses became a new and integral part of the deal business. "And it was the beginning of seven of the most wonderful years of my life," Kelly said. "I have even tears welling in my eyes. Absolute, sheer unadulterated hell. But waking up every day was a pleasure because every day was an intellectual dialectic. Every day was a challenge. And you were working with people who weren't just smart. You could feel the tangible difference between yourself and their IQ. I mean, it was phenomenal." The new hires--men and women--were simply "utils," as one of them explained, "cogs in the machine." The problem for Lazard became what to do with the "utils" as they progressed and showed genuine promise as bankers. "Obviously that's where it becomes an issue," explained one of the women professionals at that time. "Because at the point at which you're no longer a util, there's a question of whether you become additive or a threat. Or just expense. You know what I mean? So it was a bit of a struggle without a lot of thought process around what you did with people in that gap between the time they were utils and the time they became gray-haired themselves. Let's just say there was a pretty long gap where you had to kind of fend for yourself."

To succeed at Lazard, the women bankers, even more so than the men, had to figure out a way to bring in business, the coin of the realm. Whereas some of the male bankers were paid well and were promoted for working on Felix's deals and "carrying his bags"--a role that had its own costs--and others seemed to get the deals that came in over the transom, neither of these more traditional avenues to success seemed to be available to the few women bankers at Lazard. Felix never chose one of the women as his understudy, although many of them said he was pleased to flirt with them and to work with them occasionally. Most of the women at Lazard could not figure out how to play this game or lost interest in trying. "It's a white man's world," one of them said. Kathy Kelly, for one, eschewed her social life for some seven years in favor of her Lazard career, and then on the day she thought she would finally be promoted to partner, she was fired.

"I believe that Bill Loomis, acting in my best interest, was absolutely right in letting me go," she said. "However, I don't believe if I had been one of the guys that I would have been let go." Christina Mohr gave it her all. She transformed herself into a tough, no-nonsense street fighter who refused to kowtow to the men at Lazard. She fit the stereotypical profile of the successful tough-as-nails female Wall Street banker. She occasionally smoked cigars. Within two
days
of giving birth to her children, she was back at the office. Nobody, at any level, worked harder than she did. She was not much fun to work for. She carved out for herself a niche of the clients that nobody else at Lazard wanted--in retail and in consumer products, ironically the traditional route of the outsiders and the immigrants. She started bringing in clients and winning business. She also sought to mentor the few younger women at the firm and act as a role model for them. She became the first female M&A partner at Lazard, in 1990. "I remember Michel saying to me at one point, you'll become a partner the year after it is evident to everyone that you are one," Mohr recalled. Added Loomis: "I think that Christina Mohr is a classic example. To be successful at Lazard as a woman partner, you had to be
better
than your peers."

Then there was the unique case of Marilyn LaMarche, who worked for many years in the backwater that was Lazard's equity syndication department. She was a bit of an anomaly, though. There was a time--almost laughable now--in the late 1970s and early 1980s when Lazard was considered a bulge-bracket equity underwriter. Lazard rarely led a deal (even though it was the lead underwriter for the IPO of the Henley Group in 1986, one of the largest IPOs of all time), but the firm would be included in almost every equity underwriting syndicate because that's the way it was done at the time--when client relationships and capital were less important than the fact there was this set group of firms that did equity underwriting. LaMarche had Lazard's relationships with the institutional investors that bought the equity, and the firm made a fair amount of money as a result. Finally, in 1987, she was named a partner at age fifty-two. One of her partners explained why, in his opinion, LaMarche received this special treatment. "Basically she came back to her desk one day," he said, "and I understand there was a
turd
in a Baggie in her desk."

Another woman, Sandy Lamb, worked with David Supino on restructuring deals, and she became the second female Lazard partner in banking in 1992, when Supino's restructuring group was having a big financial impact on the firm in the wake of the slowdown in the traditional M&A business. The firm seemed to be slowly making some progress by the early 1990s with regard to its treatment of women. Lazard hired a woman named Nancy Cooper to create and run some sort of HR department, the firm's first such effort (and a miserable failure). Cooper was even a partner for a short time.

But that progress quickly came to a complete halt in the aftermath of the hiring of a beautiful young woman, an undergraduate at the highly regarded Wharton School at the University of Pennsylvania. Her name was Kate Bohner. She was athletic, tall, and striking, with long blond hair and long, muscular legs. When Bohner was in her junior year at Penn, she happened to be at a dinner party in New York on Valentine's Day 1987. She was seated next to Kim Taipale, an up-and-coming vice president at Lazard living in the East Village. They got to talking, and Taipale asked Bohner what she was thinking about doing for the summer between her junior and her senior years. Bohner said something about working at Goldman Sachs, and Taipale urged her to come to Lazard instead. Michel had just decided to shake things up at Lazard Brothers by installing a team of Lazard New York bankers there with the hope of having some of the American M&A techniques rub off on the British (who, of course, were disdainful of the whole exercise). Michel had asked Robert Agostinelli, Steve Langman, and Taipale to move to London to set up the Lazard Freres outpost inside Lazard Brothers. "Michel sent us over there to wind them up," one of them said. Taipale said the group needed a summer analyst. Would Bohner be interested in the job?

Bohner spent the summer in London working with the three New Yorkers, in a bull-pen-like setting, at Lazard Brothers. Their desks were catty-corner to one another. Bohner, then barely twenty, had a front-row seat on the deal business, Robert Agostinelli-style. "And there were no walls, so I could hear them negotiating, and I learned so much through osmosis," she said. This was a wonderful experience for Bohner. She had never before been exposed to international finance. She grew up in Wilmington, Delaware. Her father was chairman of the English department at the University of Delaware, and her mother was a poetry professor in the same department. When Bohner was a high school freshman in Wilmington, she was on the varsity lacrosse team. When she was fifteen, her mother left her father for her lacrosse coach. The coach happened to be a woman. "Remarkably, it wasn't as jarring as people assume," Bohner later wrote. "The experience taught me about a new type of permissive pluralism that I had not encountered before."