Reports surfaced over the weekend that Morgan Stanley general counsel Donald Kempf Jr. is leaving the firm. In its Sunday edition, the New York Times covers his departure in the context of a longer article about Ronald Perelman and the $1.45 billion verdict a Florida jury reached in his favor against Morgan over an investment in Sunbeam that went sideways.
There’s much ink given to case strategy and discovery, and how those issues may have lead to the ten-figure verdict.
The Wall Street Journal’s coverage ($) of the case noted:
Ironically, Mr. Kempf’s suggestion that Morgan Stanley settle the Perelman case for $20 million was twice rejected by the firm’s investment-banking division, according to people familiar with the matter. People familiar with the matter in the division say they shared the view of lawyers working on the case that it wasn’t worth settling on its merits at the time, and that it was later events that were Mr. Kempf’s responsibility, including the firm’s trouble producing documents, that ended up hurting the firm.
Mr. Kempf knows the real story, and like a good general counsel, he isn’t talking. While investment bankers are used to dealing with large numbers, they really pay attention when it’s not other people’s money.
Years ago when I started practicing in-house, I talked with a senior lawyer about the challenges of directing litigation in that setting. At one point, he remarked “Gunfighters don’t get a second chance”.
The Perelman case may be overturned, modified or settled on appeal. That probably won’t be front page news.
But for a general counsel, while the client may not always be right, it is the one that’s left.
Update: Tom Kirkendall also comments on Mr. Kempf’s departure here.