“When I was a lawyer 23 years ago, it was usually the bankers that got the first call on deals,” Kindler, global chair of mergers and acquisitions at Paul Weiss, said in an interview. “Now it’s entirely different—it’s the lawyers.”
Lawyers are navigating environmental, social and governance issues and tough regulatory hurdles under President Joe Biden’s administration, Kindler said. “There are many deals that are just not happening because of a realistic assessment of the time and the risk involved,” he said.
Paul, Weiss, Rifkind, Wharton & Garrison touted the former Morgan Stanley vice chairman as “one of the world’s leading M&A advisers” when the firm announced in June that Kindler would be landing in its New York office. His fingerprints are on some of the mega-deals of the last quarter century—Dow Chemical Co.'s $130 billion merger with DuPont Co., AT&T Inc.'s $85.4 billion acquisition of Time Warner Inc.; and Bristol-Myers Squibb Co.'s $74 billion purchase of Celgene Corp.
Kindler practiced at Cravath, Swaine & Moore for nearly 20 years before leaving for JPMorgan Chase & Co. in 2000. He joined Morgan Stanley six years later.
Now 69, he said he moved back to Big Law because Morgan Stanley’s James Gorman announced in May he would be stepping down as CEO, the bank’s deal-making machine slowed down, and lawyers have more career longevity than bankers.
“I was looking for a place where I can continue to be involved with M&A for the foreseeable future,” he said. “There are a lot more lawyers who are my age and older than there are bankers.”
Gorman became CEO in 2010 and Kindler said it was always his plan to stick around through the end of his reign. Under Gorman, the bank made clear it’s ratcheting back on deals.
“They’ll do deals, I’m sure, in asset management and the like, but James and the company have made it very clear that their transformation is complete, so they haven’t done any deals in the last three years.”
Activist Attacks
Paul Weiss, with Kindler on board, plans to build on large-deal work that has included World Wrestling Entertainment’s merger with Ultimate Fighting Championship to form a new public company with an enterprise value of $21.4 billion. The firm also advised Apollo Funds in its $8.1 billion acquisition of Univar Solutions and Merck & Co.'s $10.8 billion acquisition of Prometheus Biosciences.
Kindler will focus on dealmaking in the US and Europe, including advising on activist attacks, which he has defended clients from since the 1980s, he said. Activism has changed because institutional investors have become more involved in recent years, he said.
“When you’re doing a deal now, you absolutely have to evaluate what shareholder reaction is going to be,” Kindler said. “That’s why some deals are being structured to avoid a shareholder vote. If you issue more than 20% of your stock, you need to have a shareholder vote—and people are going out of their way to avoid a shareholder vote.”
That’s because a shareholder vote gives arbitrageurs and other hedge-fund and short-term investors the opportunity to buy up the stock and look at trading applications, rather than the pros and cons of a deal, Kindler said. Such investors might have a short-term investment horizon, making longer-term initiatives less favorable to them.
“I’ve done more activism than any other professional on Wall Street, since the early ‘80s, and so I think I do have a reputation for that,” Kindler said. “Paul Weiss also already has a reputation because they’ve had huge successes.” Those include representing clients on proxy fights with activist investor Carl Icahn.
Kindler’s move to Paul Weiss came after the chair of the firm’s corporate department, Scott Barshay, approached him about taking on a new role, Kindler said. Barshay, who Kindler calls his protégé, moved to Paul Weiss from white-shoe law firm Cravath in 2016, an unusual pivot at the time when lateral defections from the small and prestigious firm were rare. The two worked together at Cravath in the late 1990s.
At the firm, Kindler expects to bring in new work—his long-time clients include Time Warner Inc. and Paramount Global’s Viacom unit—and play a role with existing Paul Weiss customers.
“When they do deals or they have governance issues, or have activism issues, my longtime clients, I believe, will use Paul, Weiss,” he said.
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