Musk Suit Against Wachtell Hits Pioneering Use of Success Fees

Big Law’s increasingly popular use of success fees for handling bet-the-company deals is in the spotlight with Elon Musk’s suit against Wachtell Lipton Rosen & Katz over his rocky Twitter Inc. acquisition.

Wachtell has built a reputation as a go-to firm for such deals in transactions and litigation, often billing more like an investment bank than a law firm. Musk took direct aim at the firm’s bill practices and its use of success fees in his July 5 suit.

Twitter’s parent company, X Corp., sued the firm July 5 in San Francisco Superior Court, saying that a $90 million ...