Why Should White Guys Have All the Fun? (14 page)

Lewis’s all-time favorite target was Charles Clarkson, a white attorney Lewis hired in 1972 right after Clarkson graduated from Brooklyn Law School. The tone for their long relationship was set during their first meeting. Lewis told Clarkson he wouldn’t be able to pay that much; Clarkson replied he wasn’t making anything at the moment, so whatever Lewis could pay would be a 100 percent raise.

“Everybody was afraid of Reg over the years and it got worse,” Clarkson says. “He would treat the opposition with kid gloves and he would scream at everybody else on his side of the table. It was warfare all the time with Reg.”

Lewis and Clarkson had an unusual relationship, to say the least. Another lawyer who worked briefly with Lewis says Lewis was constantly threatening to get rid of the retiring, gentle Clarkson for reasons Lewis wouldn’t specify. But when Clarkson discovered he had a tumor on his spine, a malady that caused him to miss many months of work, Lewis told Clarkson not to worry about his job and to take as much time off as he needed to recuperate.

Clarkson had a knack for bringing out both the saintly Lewis and the bullying Lewis. Clarkson was employed by TLC Beatrice International as a consultant when Lewis died in 1993.

Diana Lee, a young law student Lewis hired from New York University, has less sulfuric memories of her days at 30 Broad Street. A Chinese-American, she got a job with Lewis in 1973 and worked with him until 1978, the year the law firm became known as Lewis & Clarkson.

Lewis was pro-black in outlook, but when it came to business he hired only people who could deliver, regardless of ethnic and racial background. In the early days, his law firm was a rainbow coalition as he, Clarkson, and Lee worked long hours crafting deals. In time, Clarkson and Lee came to do the bulk of the legal work while Lewis concentrated increasingly on business development.

Lee recalls that on Fridays, Lewis would occasionally treat her and Clarkson to dinner at Mary’s, an Italian restaurant he loved in Greenwich Village. Lewis was also a tennis buff and began taking lessons at the Wall Street Racquet Club. Rather than go by himself, he dragged Lee along, too. Unlike Lewis, who already knew how to play the game
somewhat, Lee was a novice and only lasted three lessons before throwing in the towel.

Lewis often used the tennis court the way some businessmen use the golf links to cultivate business contacts and hammer out deals. So he wasn’t above mixing business and pleasure if he could accomplish both without hurting the business side of the equation.

Clarkson bore the brunt of Lewis’s verbal tirades at 30 Broad Street because Clarkson tended to knuckle under meekly instead of standing up for himself, Lee says. She, on the other hand, had a tendency to yell right back at Lewis when she felt she was right, making Lee a less tempting target. Despite those occasional run-ins, “I actually thought he was very fair,” Lee says. “He was very tough and he really drilled into us the skills of being a good lawyer. He gave us excellent training.”

Lewis worked long hours all his life and set the pace for his employees, who both admired his stamina and resented the fact that they were expected to keep up with him. Robert Suggs practiced law with Lewis for half a year in 1976. “Most people give you a timetable to do something that has slippage in it. If you came back to Lewis in six months, there would be no slippage in his timetable,” says Suggs. “He was very focused and if he had 12 things to do to get to the next point, he’d do them in sequence. A lot of people bullshit and are vague and their story changes every time they tell it. He wasn’t bullshitting.”

Lewis was keeping impossible hours to make his law practice successful. “I never thought that Reg was a family man: He preferred staying in the office,” says Clarkson, Lewis’s partner of more than 20 years. “He always spent a lot of time in the office. A lot of times I would think to myself, ‘Gee, why isn’t Reg going home? What the hell’s he still in the office for?’ and I hated it, because I felt like I had to stay in the office as long as Reg was there.”

One day in 1976, Lewis left around midnight while associate lawyer Robert Suggs, who was working on a big financing transaction, left afterward around 3
A.M
. After a few hours sleep and a quick shower, Suggs was back in the office at 7
A.M
., while Lewis came in about 30 minutes later. When Lewis saw his young charge already at his desk and working, he smiled. “Had Suggs been in the office all night?” Lewis wanted to know.

When Suggs replied that he had gone home for a few hours, a look of disapproval and disappointment flashed across Lewis’s face. The display
was probably for effect as much as anything else. Lewis was a master psychologist whose attorneys struggled to win his approval and praise. He was able to get maximum motivational mileage out of something as simple as a smile or two-word phrases such as “Excellent work” and “Great result!”

But it was the stick, not the carrot, that Lewis resorted to most often when he wanted to light a fire under someone. Reginald Lewis could be extremely intimidating and intimidate was what he did on a regular basis. Even so, anyone thick-skinned enough not to be rattled by his loud voice or his sarcastic comments usually found something instructive in his remarks.

Every now and then, a reflective, almost wistful side of Lewis would emerge. As early as 1976, he talked of wishing he’d taken more time to smell the roses, instead of being so success-oriented. He made that comment to a number of people over the years, up until the time of his death. But when those moments of reflection evaporated, as they invariably did, Lewis would put his nose back to the grindstone and work as though possessed.

Lewis was a well-rounded man, and was aware that many of life’s interesting, pleasurable experiences were passing him by. When one of his young lawyers mentioned having taken two years off to travel the world, a fascinated Lewis listened attentively to a blow-by-blow description of the adventure. The thrill of such a sojourn would have to be vicarious.

Lewis had a pronounced bias for substance over style. His law firm mirrored that. The decor at 30 Broad Street could best be described as utilitarian. The carpet was an unattractive orange and visitors sat on a plain black leather sofa.

The firm had four small offices, one for each attorney plus the odd additional lawyer who joined the practice periodically. There were also three secretarial bays and a conference room dominated by a large round table.

In areas where a direct correlation existed between money spent and money generated, however, Lewis went all out. His law offices had top of the line copier machines, which allowed him to turn around documents—the life’s blood of any legal practice—faster. That let him be more profitable than if he’d invested in fancy furniture and ancient copier machines that broke down all the time.

Lewis’s bread and butter in his law practice was an emerging market of big Minority Enterprise Small Business Investment Companies, known as MESBICS. Created by the Nixon Administration, MESBICS are basically venture capital firms formed by corporations or foundations. They operate under the aegis of the U.S. Small Business Administration.

For every dollar a MESBIC kicks into a minority-run company, the SBA matches that by investing or lending up to $3. This multiplier effect means that a MESBIC scraping together $1 million for a deal would have $4 million to pump into a business after the SBA’s contribution.

Part of the SBA’s loan is of a nonrecourse nature, meaning that if a company goes belly-up, its assets are liquidated to pay back the SBA. In time, Reginald Lewis became probably the top lawyer in New York City—and arguably the country—when it came to doing major MESBIC transactions.

Lewis’s negotiating skills were legendary. He routinely out-negotiated far more experienced negotiators when aiming to protect his interests.

“You had to fight and squeeze whatever you got out of him, and negotiate and manipulate and play every game you could,” says Suggs. “He was intensely competitive and he could not negotiate without trying to get as many marbles on his side of the table as he could get. He always drove the hardest bargain he could. He was looking long-term structurally and financially, but he wasn’t looking long-term in his relationships with people that he felt he could just use and, when they left, replace.”

Suggs left Lewis after receiving an offer representing a 60 percent raise over his $15,000 annual salary. Lewis offered to meet the pay increase for six months, to be followed by a review. But after having seen Lewis continually increase the timetable for making partner and seeing him balk on a promise to pay health care insurance, Suggs decided it was an opportune time to leave.

Like all new attorneys growing a law practice, Lewis had to beat the wolf away from his door at times. Plus, clients were constantly devising
ways of wriggling out of his fee schedule, which always flipped the switch on Lewis’s volcanic temper.

So intent was Lewis on getting his practice up and running that he sometimes dipped into his personal savings account to meet payroll during his start-up days. At home, there were piles of returned checks stamped “insufficient funds.” Around this time, the wife of one of Lewis’s Harvard classmates was working in a doctor’s office where Lewis was seen. At one point, while Lewis was being examined by the doctor, Marion Auspitz took Lewis’s frayed shirt into another room and stitched the collar. When Lewis put his feet up on his desk, a Lewis trademark once he started running the show, there would be circles on the soles of his shoes where the leather was nearly worn through to his socks.

Lewis pushed hard to collect his fees. He knew he was good. Damned good and not to be hired on the cheap. He had no qualms with charging fees comparable to those of large white-run law firms.

In the typical MESBIC deal, the legal bill usually isn’t discussed up front. And an entrepreneur putting up $25,000 and getting $2 million was usually so happy that lawyers’ fees were the furthest thing from his or her mind. So, Lewis generally saved the best for last.

“I’ve seen some borrowers really wince when they saw his fee,” says Howard Mackey, the head of Equico, a major Lewis client and the largest MESBIC in the country at the time. “Personally, I never blamed him—I mean the man’s out there on his own and that’s his work.”

With his business savvy growing exponentially, Lewis came up with effective ways of making sure his fees got collected. He began to stipulate that clients had to pay his firm as a pre-condition to closing their financing transactions.

But there were still occasions when Lewis simply had to back down and reduce his bill after a client complained and the MESBIC involved didn’t go to bat for Lewis. He found this particularly galling, because most of the borrowers were black and Lewis knew they wouldn’t dream of trying to make a white law firm reduce a legal bill.

Every now and then, Lewis would butt heads with an entrepreneur as ego-driven and stubborn as he. One such instance was when he worked on a MESBIC deal making it possible for
Black Enterprise
founder Earl Graves to buy two radio stations.

Lewis demanded his fee at closing; Earl Graves said no—Lewis would be paid in 30 days. “That’s unacceptable,” Lewis replied flintily. “If we don’t get it, we’re not closing.”

If Lewis wanted a test of wills, Graves was up to the task. Graves got on the phone to the chairman of Equitable Life, Equico’s parent company, to complain about their intransigent attorney. However, only after Lewis received assurances from Equitable that he would be paid in a timely manner did he relent and close the deal.

Again, it was just business for Lewis. There were no hard feelings on his part. He’d gotten what he’d wanted, which was to be paid immediately for the hard work he put into Graves’s transaction. Graves came away with a heightened respect for Reginald Lewis—in fact, he was one of the first people to tell Michael Milken to keep an eye out for a budding business superstar named Reginald Lewis.

Equico president Mackey figured Lewis wouldn’t have the nerve to quibble with Mackey about money. Wrong. “I always found him to be kind of hard-boiled, and we spent some time arguing about fees. I got mad at him, because I put him in the position at Equico where he was doing all of our business. I figured the last thing he would want to do would be to argue with me, but he started in on me like anybody else. We worked it out, but that’s the kind of guy Reg was,” Mackey recalls.

Lewis didn’t even cut relatives slack. When his uncle James Cooper bought a Baltimore bail bond business, he hired Lewis to represent him. Cooper flew to New York, where Lewis ironed out the final terms of the sale.

Cooper got his bill and blanched. He asked Lewis, “Are you sure?” Yes, Lewis replied, his hefty fee was correct. There had been no error.

“Either pay me all of the bill or pay me none of it.” Lewis told his uncle calmly.

Cooper paid his bill.

After a few years, Lewis’s law firm began to prosper. In time, it pretty much cornered the market in terms of representing MESBICs. But Lewis was deriving something from his MESBIC work that would be far more valuable in the long run than income: He was amassing an
incredible body of knowledge about how to structure corporate acquisitions through the use of debt financing.

Lewis was retained as general counsel by the American Association of Minority Enterprise Small Business Investment Companies and was shuttling down to Washington on a regular basis, attending meetings related to MESBICS.