Revisiting the Forbes 400 and Its Deep-Pocketed Attorneys
Three years after considering the credentials of the lawyers littering Forbes’ annual list of America's 400 richest people, The Am Law Daily decided to revisit the magazine's wealth rankings and examine the legal lineage of both holdovers from 2010 and several who made their way into the upper echelon since the last time we looked.
For the purposes of this exercise, we focused on members of the Forbes list with law degrees, even if not all of them went on to formally practice. It should be noted that—with the exception of Joe Jamail Jr., the infamous King of Torts—the individuals mentioned here and in our 2010 article did not make their fortunes practicing law. Some, such as Jamail, have credited their legal training with being critical to their future business success.
The Houston-based Jamail—whose net worth Forbes pegs at $1.6 billion, good for No. 342 on the list—is the nation’s richest practicing attorney, even if, at age 87, he doesn't take on many new cases. But his name still gets mentioned on fall Saturdays as a result of his sponsorship of the football field at the University of Texas’ 100,000-seat Darrell K. Royal–Texas Memorial Stadium.
Those with legal bona fides joining Jamail on Forbes’ billionaires roll call since the last time we looked include:
No. 77. Randa Williams, $5.5 billion. Williams, who earned a law degree from the University of Houston and currently serves as chair of the board for Houston-based energy pipeline investor Enterprise GP, was a late addition to Forbes’ 2010 list following the death of her father, oil billionaire Dan Duncan. Williams previously worked at Butler & Binion, a Houston firm that closed its doors in 1999, and litigation shop Brown Sims.
No. 118. Daniel Gilbert, $3.9 billion. The Quicken Loans founder and Detroit native graduated from Wayne State University Law School in 1987. Still an active member of the Michigan bar, Gilbert also owns the National Basketball Association’s Cleveland Cavaliers. In 2010, he reportedly hired Jones Day to probe former Cavs star LeBron James' decision to jump to the Miami Heat.
No. 134. Stewart and Lynda Resnick, $3.5 billion. Through their Roll Global holding company, the Resnicks own brands such as Pom Wonderful, Fiji Water and Teleflora. Stewart Resnick has served as Roll Global's president and CEO since 1962—the same year he earned a law degree from the University of California, Los Angeles, which earlier this year announced that it had received a $4 million gift from the Resnicks to establish the Resnick Program for Food Law and Policy. The Resnicks, who have been mired in Pom-related litigation for the past several years, and the law school were the subject of controversy in 2011 over a $10 million donation by Lowell Milken to create a business law institute at UCLA.
No. 296. Donald Sterling, $1.9 billion. The real estate tycoon and owner of the National Basketball Association’s Los Angeles Clippers is no stranger to legal troubles or controversial statements. But Sterling, who was born Donald Tokowitz, is also an attorney. After graduating from Southwestern Law School in 1960, he became a divorce and personal injury lawyer, investing the proceeds from his work in real estate (if not, for the most part, constructing a winning NBA franchise).
No. 325. Eric Lefkofsky, $1.75 billion. The Groupon co-founder and largest shareholder in the ecommerce company of which he was named interim co-CEO in February first made the Forbes list in 2011. A 1993 graduate of the University of Michigan Law School, Lefkofsky went on to invest in several startups until hitting on Groupon in 2008. Three years later, the company raised $700 million through an initial public offering. Lefkofsky’s brother, Steven Lefkofsky, is a founder of Farmington Hills, Mich.–based Lefkofsky & Gorosh, which does some work for Groupon.
Before considering all the holdovers from 2010, we should note that we neglected to include 1970 Columbia Law School graduate Richard LeFrak's legal ties in our tally three years ago despite his presence on that year's Forbes list. LeFrak and his family, whose $5.6 billion fortune puts them at 74th in this year's rankings, operate prominent New York City real estate development firm The LeFrak Organization.
As for the rest of those holding steady three years later—read our previous article for more legal background on those mentioned below—the Pritzker family’s collective net worth totals more than $20 billion, according to Forbes.
That's more than enough to cover the cost of the law degrees that five family members—Jay Robert, Thomas, Penny, Daniel and Nicholas II—earned at the University of Chicago, Northwestern and Stanford. While squabbling among the heirs to the Hyatt/Marmon Group fortune has mostly been resolved, the inheritance dispute has had repercussions for some Chicago firms handling Pritzker business.
S. Robson Walton, a former partner at Connor & Winters in Tulsa, Okla., is a former general counsel turned chairman of the board of directors for Wal-Mart, the retail giant founded by his father. Walton is No. 9 on Forbes’s richest Americans list with a net worth of $33.3 billion.
Others with legal links filling out the Forbes 400 ranks include Richard Kinder (No. 39; $10.2 billion); Sumner Redstone (No. 71; $5.8 billion); Robert Rowling (No. 93; $4.9 billion); Stephen Ross (No. 94; $4.8 billion); Robert Ziff (No. 98; $4.6 billion); George Roberts (No. 103; $4.4 billion); Trevor Rees-Jones (No. 103; $4.4 billion); Samuel Zell (No. 110; $4 billion); Ted Lerner (No. 110; $4 billion); and Riley Bechtel (No. 143; $3.4 billion).
Bechtel, the great-grandson of Warren Bechtel, who founded the construction company of the same name, began his career at Bechtel’s go-to outside firm, Thelen, which dissolved in 2008. Rees-Jones, a Texas oil billionaire and son of late Locke Lord of counsel Trevor William Rees-Jones, began his career as a bankruptcy lawyer at Thompson & Knight. D Magazine reports the younger Rees-Jones left his legal career behind with only $4,000 in savings to start his own wildcatting business. (Former Thompson & Knight partner Thornton Hardie III serves as president of The Rees-Jones Foundation.)
CBS and Viacom chairman Redstone has watched his wealth surge from an estimated $2.8 billion in 2010 to $5.8 billion this year, according to Forbes. Last year he donated $18 million to the Boston University School of Law, where Redstone was once a faculty member. He began his career trying tax cases as a special assistant to former U.S. attorney general Thomas Clark, who later became an associate justice on the U.S. Supreme Court. Ironically, Redstone is now facing scrutiny from the IRS over a $1.1 million tax bill from 1972.
Another name shooting up the Forbes 400 is pharmaceutical entrepreneur Randal Kirk, once the only attorney in Bland County, Va. Kirk, who checks in at No. 143, saw his net wealth soar from $1.7 billion in 2010 to $3.4 billion this year thanks to a $1.5 billion windfall from an IPO by his biotech firm Intrexon. (The offering yielded $1.4 million in legal fees and expenses for Troutman Sanders and Goodwin Procter, according to an SEC filing by the company.)
Filling out the Forbes list are Steven Rales (No. 157; $3.2 billion); David Rubenstein (No. 209; $2.6 billion); David Bonderman (No. 209; $2.6 billion); Neil Bluhm (No. 222; $2.5 billion); Mortimer Zuckerman (No. 243; $2.3 billion); Bernard Saul II (No. 252; $2.2 billion); Michael Jaharis (No. 273; $2 billion); Gerald Ford (No. 296; $1.9 billion); Bruce Karsh (No. 296; $1.9 billion); Peter Thiel (No. 314; $1.8 billion); Marc Lasry (No. 352; $1.5 billion); and Leon Charney (No. 386; $1.3 billion).
Lasry, who spent a year at New York bankruptcy boutique Angel & Frankel before going on to found hedge fund Avenue Capital Group in 1995, withdrew his nomination to become U.S. ambassador to France earlier this year. Thiel, a former Sullivan & Cromwell associate who quit the firm in 1996 to set up a hedge fund that invested in a predecessor to PayPal, was a key investor in Facebook ahead of its IPO last year.
Karsh, a former O’Melveny & Myers associate who co-founded financial services firm Oaktree Capital Management in 1995, saw his net worth rise from $1.15 billion in 2010 after taking Oaktree public last year. (The Oaktree IPO yielded $3.5 million in legal fees and expenses for Simpson Thacher & Bartlett and S&C, according to an SEC filing.)
Bluhm, whose name adorns Northwestern's Bluhm Legal Clinic, is a former Mayer Brown partner and founder of private equity firm Walton Street Capital. He is currently riding high on the surging profits generated by his Rivers Casino outside Chicago, according to Crain’s Chicago Business and Michigan Avenue Magazine.
Bonderman, a former Arnold & Porter partner who co-founded buyout shop TPG Capital in 1992, has seen his net worth grow from $1.8 billion in 2010 to $2.6 billion this year as a result of some savvy investment exits, most recently through the $6 billion sale earlier this month of luxury retailer Neiman Marcus.
Others appearing on this year's Forbes list are not attorneys but still have notable legal connections.
Nordstrom heiress Anne Gittinger, who checks in at No. 386 with a net worth of $1.3 billion, is married to Lane Powell corporate partner D. Wayne Gittinger in Seattle. The couple sponsor the D. Wayne & Anne Gittinger Professor of Law position at the University of Washington School of Law in Seattle, now held by Anita Ramasastry.
At No. 27 is Donald Bren, whose $14 billion fortune makes him the nation’s wealthiest real estate developer. He's married to Brigitte Bren, a former of counsel at now-defunct Arter & Hadden. The two wed in 1998, and Brigitte Bren now serves as a director for the Irvine Company, of which her husband is the sole owner.
Hedge fund honchos Daniel Loeb of Third Point and Chase Coleman III of Tiger Global Management, whose respective fortunes of $1.65 billion and $1.4 billion have them at Nos. 341 and 371 on the list, are the scions of Am Law 100 partners. Loeb’s father is Ronald Loeb, the former Williams-Sonoma general counsel and Irell & Manella tax partner who passed away last year.
Coleman, a descendant of Peter Stuyvesant, the last Dutch governor of New York, is the son of Pillsbury Winthrop Shaw Pittman partner C. Payson Coleman Jr., who heads the firm’s equipment finance practice. Coleman’s grandfather, Payson Coleman, served as managing partner of Davis Polk & Wardwell until his death at age 57 in 1982.
And then there's America’s richest man: Bill Gates, whose fortune Forbes puts at $72 billion. The Microsoft co-founder is the son of William Gates Sr., a former name partner at Preston Gates & Ellis, a predecessor firm to what is now called K&L Gates.
Some people have, of course, dropped off the Forbes list for one reason or another since we last took stock three years ago.
John Anderson, a founder and president of Los Angeles–based Topa Equities who died in July 2011 at age 93. The billionaire investor was a founding partner of leading Los Angeles securities firm Kindel & Anderson, which closed its doors in 1996—a decade after its Newport Beach office struck out on its own and other partners left for Paul Hastings. (Anderson’s former fellow name partner James Kindel, who later kept an office at McKenna Long & Aldridge, was also 93 when he died in 2007.)
Jess Jackson Jr., a former successful real estate lawyer in San Francisco, left his legal career behind after buying an 80-acre California pear and walnut orchard in the mid-1970s. Jackson, who was 81 when he died in April 2011, saw that investment grow into the enormously popular Kendall-Jackson brand of wines.
The death of private equity pioneer Theodore “Ted” Forstmann at age 71 in November 2011 led to Akin Gump Strauss Hauer & Feld picking up the lead role for the liquidation of New York–based Forstmann Little & Company’s portfolio. Forstmann was an heir to a textile fortune depleted to the point that he took up playing cards to supplement the $150 a month he received from his trust while attending Columbia Law School in the early '60s, a fact noted in Barbarians at the Gate, the seminal 1990 book about the art of the leveraged buyout.
Longtime Warren Buffett confidant and Berkshire Hathaway vice chairman Charles Munger fell off the Forbes list in 2011 after distributing shares in the company to his eight children upon the death of his wife Nancy in 2010. Munger, a founding partner of Munger, Tolles & Olson until leaving the practice of law in 1965 to join up with Buffett, owns California legal publication the Daily Journal, which Bloomberg reported this summer was profiting nicely from some savvy investments by its owner. (Forbes pegs Munger’s current net worth at a mere $1.2 billion. )
Also falling short of the Forbes 400 with a net worth of $1.25 billion is Todd Wagner, an ex-associate at Akin Gump and Hopkins & Sutter who made his fortune during the early Internet boom by co-founding Broadcast.com with Mark Cuban.
Wagner made partner at Hopkins & Sutter, which later merged with Foley & Lardner, but quit the firm against the advice of its senior partner in order to team up with Cuban in 1995. The two entrepreneurs sold Broadcast.com to Yahoo for $5.7 billion in 1999. (Cuban is ranked No. 222 on the current Forbes list with a net worth of $2.5 billion.)
Joseph Craft III’s connections to the University of Kentucky—from which he graduated with a law degree in 1976—run deep. A major booster of the school’s top-ranked men’s basketball team, Craft worked as an in-house lawyer in the coal industry, which is where he made his fortune after leading a management-backed buyout of a unit that became Alliance Resource Partners. But a 2011 divorce put a serious dent in what was a $1.4 billion fortune that now stands at $625 million, according to Forbes.
William Connor II, the son of a former trade attaché to General Douglas MacArthur during World War II, earned a law degree from Santa Clara University before joining The Connor Group, a Hong Kong–based sourcing and logistics business started by his father in 1949. Forbes puts Connor’s current fortune at $1.07 billion, down from $1.6 billion in 2010.
Colony Capital founder and chairman Thomas Barrack Jr. began his career as a lawyer. After law school at the University of Southern California and University of San Diego, Barrack went to work at Newport Beach–based Kalmbach, DeMarco, Knapp & Chillingworth, a firm founded by Herbert Kalmbach, the personal attorney to President Richard Nixon. (Kalmbach is now of counsel at Baker & Hostetler in Costa Mesa, Calif.) Barrack, who is still listed in California Bar records, started Colony Capital in 1991 to buy bad real estate loans after the savings and loan crisis. In 2005, he foresaw the looming real estate bubble, and he's once again issuing warnings about an overheated U.S. housing market. Forbes puts his fortune at an even $1 billion, down from $1.2 billion in 2010.
Korean immigrant James Kim, a founder of microchip maker Amkor Technology, attended law school in Seoul but never graduated. As a result, we did not include him in our 2010 report, but thought we’d note him falling off the Forbes list in 2011 as a result of his fortune being divided among his family.
One former lawyer who also did not appear in our 2010 article but who climbed onto the Forbes list in 2012 is Paul Singer, the founder of New York–based hedge fund Elliott Management. Singer graduated from Harvard Law School in 1969 before going on to work at two Wall Street firms and the real estate division of investment bank Donaldson, Lufkin & Jenrette. Singer opened Elliott in 1977 with $1.3 million from family, friends and savings, according to the Financial Times. Alas, a year after climbing onto the Forbes list, his $1.25 billion net worth caused him to slip back off, putting him in a category of 60 other billionaires that Forbes notes are simply not rich enough to make its top 400. Blame it on Argentina.
Forbes’s global billionaires list also has its share of well-heeled members with legal connections, including German ball bearing magnate Georg Schaeffler, a former associate at Haynes and Boone in Dallas who still appears on the Lone Star State’s attorney registry. Haynes and Boone founding partner Michael Boone only learned about his billionaire associate's family wealth after Schaeffler bought a mansion in the city’s tony Highland Park neighborhood, according to D Magazine. Schaeffler, who was paid in the low six figures at the firm, is now along with his mother worth a collective $2.2 billion.
Working off of Forbes's own rankings, Business Insider published a rundown earlier this year of the world's wealthiest law graduates. And not to be outdone, Bloomberg unveiled its own Billionaires Index last year to compete with Forbes and track incredible affluence on a daily basis.