A law partnership has no outside shareholders. Whatever remains after rent, salaries, and staff goes to the partners, and the industry publishes the quotient under the name profits per partner. That number is a governance fact before it is a financial one. It tells you who owns the surplus, and ownership of the surplus is the franchise.
The franchise is weighted by revenue. It has to be. A partnership that gave equal weight to every equity partner regardless of what he brought in would lose the rainmakers to a firm that did not, and the rainmakers know this, and so does everyone else. The weighting rarely appears in the partnership agreement in those terms. It appears in compensation, in committee seats, in who gets a return call from the chairman on a Sunday. And because revenue composition can change faster than culture, a firm can hold an election it never announced and hand power to a bloc that did not campaign.
That is the story the Times told about Paul Weiss.
In 2008 the litigators owned the surplus. The firm’s identity was theirs to buy because it was their money. The Scottsboro appeal, the assistance to Thurgood Marshall in Brown, the Windsor case, the airport deployments in 2017, the two hundred and fifty family reunifications: these were purchases made by the residual claimants out of their own residual. They bought recruiting advantages and got them. They bought prestige at conferences and in the Financial Times and got that too. They bought the pleasure of the thing, which is a real good even if no accountant books it, and a partner making two and a half million dollars a year can afford to consume some.
The consumption and the returns pointed the same way. A firm can hold values for a long time when holding them costs nothing at the margin and pays in three currencies.
Karp saw that banking work would slow. He was right. He went after private equity and mergers because the money was there, and he brought in a man from Cravath and paid him more than the veterans to accelerate it. The litigators agreed to this. They had to; the pivot funded their raises. By the early 2020s corporate work threw off 65 percent of revenue.
The electorate had changed. The new owners had different tastes in what to buy with their money.
Nothing in the account requires anyone to lie or convert. Karp did not sell out. He financed a pivot with the litigators’ consent and the pivot carried a franchise transfer he did not price into the deal. Barshay said on arrival he had no interest in leadership, and he probably meant it, because he did not need leadership. He needed votes on the Deciding Group, and revenue delivered them without his asking. When he told a table of young litigators at Marea that he was running the firm already with Karp more as a puppet, and that he liked the arrangement because he could hold the power without the daily tedium, he was describing the setup accurately. The elevation of Barshay to chairman after the Epstein documents surfaced is a formality that recorded a transfer already complete.
The frame has to handle the small events or it is decoration. Take them in order.
Return to office, 2021. Korberg surveys employees and pushes for three days. Barshay pushes for five, mirroring the banks and funds his group serves. Korberg wins. Read the outcome and you might think the litigators still held the room. Read the call itself, on Mother’s Day, a head of corporate law telephoning a partner to press a point about attendance, and you see a man testing whether the franchise had moved yet. It had not, quite. He tested again the next year with questions about billable hours and pro bono ratios, and partners who could have told him it was not his business instead arranged a briefing.
Idaho, 2023. The state makes gender transition care for minors a felony. The ACLU and Paul Weiss sue. Barshay learns the firm will be named in the release and demands the name come out. He gets it, and gets prospective approval rights over all such releases. This is a lawyer whose clients bear the reputational cost claiming a veto over the publicity, and the veto is granted because he is paying. Karp’s fix was to have the firm’s name added to the ACLU’s website after the fact and his own name added as counsel of record, which is what a chairman does when he can no longer deliver the substance and still wants to deliver something.
The 2023 address to partners says it aloud. Pro bono made the country more fair and burnished the firm’s reputation over generations, and many of you came here for it, and the firm has since recruited lawyers with divergent political sensibilities, and we are a commercial law firm and not a public interest advocacy organization, and there is a war, and being in that war is not good for business. Karp proposed keeping the core work and being sensitive about which matters the firm promoted. Read that as a chairman describing the new electorate to the old one and negotiating the terms of the reduction.
Korberg’s exit. Three million in compensation over a final year of pro bono and mentoring, then another year’s salary at roughly three and a half million, in exchange for a promise not to sue, not to disparage, and not to reveal that a deal existed. The firm was buying back a claim on its own story. It bought it out of the same surplus that had funded the story in the first place, which tells you the values and the settlement were always denominated in one currency. Whatever else the firm believed about Korberg, it priced the risk that Korberg would speak, and it paid, and it did not investigate what four people said Barshay had been saying behind Korberg’s back.
The website fight in March 2025. The Center to Combat Hate page comes down around the time of the White House deal, and partners argue over what can go back up. Dunn wants it restored unchanged and says the comparison between versions will be the problem. Bonvino wants it back with major changes and asks whether they are going to hand it to Boris or Miller for review. Then the solvency statement: last week was miserable, the firm was saved from the brink, the firm should take no risks, there likely won’t be a next time if we get hit again. These are partners arguing over how much of a purchase they can still afford after a margin call. The page went back up without the Proud Boys and Oath Keepers work.
Dunn’s proposed abortion rights case in the same weeks is the same argument at a larger denomination. She wanted to buy back independence with a lawsuit. Karp was lukewarm. Barshay was opposed. The purchase was declined, and Dunn left in May with Rhee and two others, and the Deciding Group tilted further corporate by their leaving, which is how these transfers compound.
Then the DJI withdrawal, which came before any executive order. In October 2024 the firm sued the Pentagon for a Chinese drone maker. After the election Barshay argued on a call that the firm should not stand adversarial to the government. In December the firm withdrew. The spokeswoman says the decision would have been made regardless of party. Perhaps. The timing tells you the new owners had already begun repricing the portfolio.
The Oval Office meeting in March 2025 follows from all of it. Four firms fought similar orders and won injunctions from angry judges. Paul Weiss’s leaders believed they could win too. Winning was not the constraint. Karp’s own reasoning, as reported, was that a favorable ruling would not stop an administration stocked with loyalists from refusing to deal with his lawyers, and more than three quarters of the firm’s clients held government contracts. Meanwhile partners on the corporate side were taking calls from rivals and saying so. A firm whose surplus depends on M&A cannot spend a year as the government’s named adversary, and the men who generate that surplus were the ones voting. Forty million in free legal work was the number that cleared the market.
Karp landed Apollo in 2011 as the opening move of the corporate pivot, and Apollo became the firm’s highest paying client. Through Apollo he knew Leon Black. Through Black he knew Epstein, and gave the sex offender free advice. In March 2019 he wrote to Epstein that a draft motion was overwhelmingly persuasive and that he particularly liked the argument that the victims had lain in wait and sat on their rights for strategic advantage. He put the word victims in quotation marks.
This was the pivot arriving at its terminus. Karp chased corporate revenue to fund an identity, the revenue came with relationships, the relationships came with obligations, and one of the obligations was flattering a man’s lawyers about a filing that mocked girls he had abused. The chairman who kept a photograph of a reunited father and daughter on his desk wrote that email seven weeks before he sat for interviews about the firm’s conscience.
When the Justice Department released the files in January, the Deciding Group met without him over several days. Partners reported irate clients. They decided he had to go, and Barshay told him.
Two implications follow.
First, the betrayal narrative gets the causation backward. If the story is that a firm lost its nerve, the remedy is nerve. If the story is that a firm’s electorate changed and the new electorate had different preferences, then nerve was never available to be lost, and the decisive moment was 2016, when a compensation package purchased something nobody at the table priced. Ask what Paul Weiss thought it was buying when it paid Barshay more than its veterans. It was buying M&A market share. It was also buying a vote, and then a bloc, and then the firm.
Second, a reputation is capital that a partnership can spend for decades without noticing it has stopped funding the reserve. Every year the firm consumed some of what Rifkind and Liman built, and every year it converted the consumption into recruits and rankings, and the conversion was profitable, so nobody asked what would happen when the reserve was tested. Rifkind’s granddaughters, both lawyers, wrote that taking action to stay off an enemies list does not advance the rule of law. They were writing about an inheritance their grandfather funded and the firm drew down.
The Times reports that after the deal, Paul Weiss provided no examples of work opposing the administration.
That is the residual, allocated.
