Karp Ouster Tests Dealmaker Barshay’s Ability to Lead Paul Weiss

Scott Barshay, the first M&A lawyer to lead storied Wall Street law firm Paul Weiss, confronts an early test to his no-nonsense approach after Brad Karp’s surprise exit.

Partners’ “trust, and their faith, has been shaken,” said Cari Brunelle, a co-founder of communications firm Baretz+Burnelle. Barshay must “instill confidence and a sense of stability and avoid a slow bleed of departures.”

Barshay, who led the Paul Weiss corporate practice after Karp recruited him to the firm, became the new chair suddenly Wednesday after Karp was hit with new revelations in Justice Department documents about his ties to disgraced financier Jeffrey Epstein.

Karp, who is staying on as a partner, is a veteran litigator and active fundraiser for the Democratic Party known for contacts across business, politics, and academia. Barshay is known for his prowess as a dealmaker: He transformed Paul, Weiss, Rifkind, Wharton & Garrison into a destination for partners and clients working on high-stakes transactions in the 10 years since joining the firm.

“There will be a shift in leadership style,” said Rick Rule, former co-chair of antitrust at Paul Weiss who left in 2022 to start his own firm. The change will be “from a connection-based style of being people’s friends and being significant in political circles to someone who is very business-oriented and focused on the bottom line.”

“He doesn’t suffer fools gladly,” Rule added of Barshay. “You need to perform well. He’s big on merit.”

Barshay has been the second-most influential person at the firm behind Karp, according to a person familiar with him, who requested anonymity to discuss the new leader. He’s had a hand in steering major firm decisions for several years, including how much partners get paid and which lateral partners to recruit—even in practices outside of corporate, the person said.

Barshay, who holds the largest book of business at the firm, has earned a polarizing reputation from colleagues, according to the person. He sets high expectations for associates and partners, and colleagues have a limited window of time to impress him before being written out of his inner circle altogether, the person said.

Paul Weiss and Barshay didn’t respond to requests for a comment.

A League of His Own

Barshay first began making an imprint on Wall Street at Cravath Swaine & Moore, the prestigious firm founded in 1819. After steadily climbing the ladder upon graduating from Columbia Law School in the early 1990s, he and a group of more junior partners started taking a more assertive approach to business development than previous generations.

Barshay’s big deals as a young partner included helping United Airlines in a $3 billion tie-up with Continental Airlines in 2010. In 2015, he reportedly generated about $100 million in fees.

At Karp’s urging, Barshay left Cravath in 2016 for Paul Weiss in a move that shocked the industry. The Paul Weiss corporate practice was already strong, and Barshay’s arrival accelerated its growth and ambition, said Mike Parrillo, founder of legal recruiter Parrillo Search Group.

Barshay quickly made an impact at the firm, bringing with him longtime Cravath corporate clients such as Chevron Corp., IBM Corp., and Qualcomm Inc. He executed a $47 billion deal for Qualcomm to buy NXP Semiconductors in October 2016.

Paul Weiss lawyers steered more than $327 billion worth of M&A deals last year, landing among the top 10 dealmakers, according to Bloomberg data.

Barshay “found the right platform” at Paul Weiss, said Sabina Lippman, co-founder of legal recruiter Centerpeak. Barshay’s practice grew more than ten-fold since he joined the firm, she said.

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Not only did his practice grow, but so did Paul Weiss’s corporate team. Barshay aggressively hired corporate rainmakers from other firms, emphasizing public and private mergers and acquisitions.

The firm has top corporate transactions rainmakers, such as Krishna Veeraraghavan from Sullivan & Cromwell, Neel Sachdev from Kirkland & Ellis, former top Morgan Stanley executive Robert Kindler, and Jim Langston from Cleary Gottlieb Steen & Hamilton. Paul Weiss this week announced the opening of a new Houston office led by prominent Kirkland & Ellis dealmaker Sean Wheeler.

“Building around Sean Wheeler has been my intention right from the very beginning,” Barshay said in an interview Feb. 3, one day before taking the firm-wide leadership role. “He just needed to say yes.”

Shift in Direction

The leadership shift solidifies a shift in direction that Paul Weiss has been making since Barshay’s arrival. It also underscores where the legal industry is headed, according to Rule.

“Increasingly, a lot of the business at the firm was driven by Scott and the people who he attracted,” Rule said. “Litigation and investigations, in my humble estimation, aren’t going to drive growth the way they did 15 or 20 years ago.”

Parrillo said Barshay brings “gravitas and vision” to his new post, allowing him to continue work he has already been doing at the firm. “Scott’s appointment as chairman reflects the role he has long played in shaping the firm’s direction,” he said.

Law professor and Barshay mentor William Widen, who worked at Cravath before joining the University of Miami’s School of Law, said he saw Barshay’s unique knack for running the business aspects of a law firm from the time they worked together.

“He was one of the excellent associates I had the good fortune to train ages ago,” Widen said. “He had unusual business sense and judgment as a junior lawyer so I am not surprised that he has excelled in the practice of law.”

—Justin Wise contributed to this report