I have been reading the semi-biographical account of the Wall Street Powerhouse: Lazard Freres & Co. and it has been very interesting, informative and educating. It has given me an insight into the evolution of Investment Banking over the last century and traces the company's roots from its birth as a San-Francisco dry goods store to its role as , probably, the inventor of the M&A Advisory business as we know it today.

I have always been interested in Lazard as it was one of the firms that stressed Intellectual Capital over financial capital. It was for the greater part of the 20th century an advisory firm and executed very few financing manadates. It had a lot of confidence in the knowledge, insight and contacts of its key partners and in their ability to offer useful and strategic advice to major corporations and governments.

Such partners such as the famed "Great Men" of Lazard such as Andre Meyer, Felix Rohatyn ("The Saviour of New York") and now, probably the last "Great Man" in Investment Banking, Bruce Wasserstein. In the era of full-service firms or "financial supermarkets", firms like Lazard are fast becoming endangered species. Though I believe that the need for pure-play advisory firms has never been greater; corporations, governments and financial sponsors need knowledgable and insightful advice that is not clouded by conflicts that may arise from potential financing businesses.

An advisory firm with a well developed bonds operation may steer its client into raising debt financing, even if that is not the best option for the client, in order to bring in business for its bond desk. A firm with a substantial equity capital markets operation may also do the same, all these scenarios raise possible conflicts between interests of the adviser and the client.
However, Pure advisory firms should have none of these conflicts and should be able to access their clients' position and positions in a relatively unbiased manner.