The Law Firm Wall Street Influence Can’t Escape: How Sullivan & Cromwell Wrote the Rules of Modern Finance

Corporate law influence rarely announces itself. It arrives in footnotes, closing conditions, and regulatory comment letters written in careful, deliberate prose.

There is a building at 125 Broad Street in Lower Manhattan that most New Yorkers walk past without a second glance. It is handsome, institutional, unsentimental—the kind of architecture that suggests permanence rather than power. Inside, Sullivan & Cromwell LLP has, for nearly a century and a half, quietly drafted the legal frameworks that govern how capital moves, how corporations die and are reborn, and how governments decide which financial risks are tolerable and which are not. To understand the law firm Wall Street influence depends upon most, you must begin here. And you must begin with the uncomfortable truth that the legal architecture of finance was not designed by legislators or central bankers—it was designed, to a remarkable degree, by lawyers billing by the hour.

Sullivan & Cromwell was founded in 1879 by Algernon Sullivan and William Nelson Cromwell, at a moment when American capitalism was shedding its agrarian skin and growing something altogether harder. Cromwell, in particular, arrived as a legal mercenary of unusual audacity. He restructured the Erie Railroad’s debt, saved the Northern Pacific from receivership, and—most consequentially—lobbied the United States Congress to abandon the Nicaragua route for an inter-oceanic canal, steering the project toward Panama. A 1977 Foreign Affairs essay on American empire in Latin America noted that Cromwell’s role in securing Panama’s secession from Colombia in 1903 remained, at the time of writing, one of the least-examined legal interventions in diplomatic history. The fees his firm collected from the French canal company exceeded $800,000—equivalent to roughly $28 million today—making it, at the time, one of the largest legal payouts in American history.

The Cravath System Is Famous. The Sullivan System Is More Powerful.

Legal historians tend to celebrate the “Cravath System”—the pyramid model of associate recruitment, training, and partnership that Paul Cravath formalized in the early twentieth century—as the defining organizational innovation of elite American law. Harvard Law Review has examined this model extensively, tracing how it professionalized corporate legal practice and concentrated talent in a small number of New York firms. But while Cravath systematized the firm, Sullivan & Cromwell systematized something subtler and more durable: the relationship between the law firm and its clients that persists across regulatory epochs, market cycles, and even national borders.

John Foster Dulles, who served as the firm’s senior partner from the 1920s through 1949, exemplifies this dynamic with almost uncomfortable clarity. Dulles represented German industrial conglomerates before and after the First World War, advised on the reparations framework created by the Treaty of Versailles, and then—as Secretary of State under Eisenhower—shaped the Cold War foreign policy environment in which his former clients operated. The revolving door between Sullivan & Cromwell and the American foreign policy establishment is not a metaphor. It is, in many cases, a documented biographical fact.

“The most powerful legal institution in the world is not the Supreme Court. It is the law firm that advises the institution the Supreme Court is asked to review.”

This is not a sentence any senior partner at Sullivan & Cromwell would utter in public. It represents a judgment that serious scholars of institutional power—including Luigi Zingales at the University of Chicago Booth School of Business, whose work on financial sector capture merits wider attention among policy audiences—have approached from different angles and reached, in softer language, similar conclusions.

Structuring the Crisis: From Glass-Steagall to the Derivatives Revolution

The firm’s most consequential modern chapters are written not in the language of empire but in the language of financial engineering. When Glass-Steagall began its slow political death in the 1980s and 1990s—the Gramm-Leach-Bliley Act finally repealed its core provisions in 1999—Sullivan & Cromwell’s attorneys were central to advising the banks and financial conglomerates that stood to gain. The firm represented Travelers Group in its 1998 merger with Citicorp, a transaction that was technically illegal under then-existing law but predicated on the—correct—assumption that the law would change before the Federal Reserve’s regulatory grace period expired. It did.

This is not illegal. It is not even unusual. But it describes something worth naming clearly: elite law firms do not simply interpret the law. They help to determine which laws will exist, when they will be enforced, and how their language will be structured so as to favor—or at least not disfavor—the clients who pay to have them written. The Financial Crisis Inquiry Commission, in its 2011 report, stopped short of indicting any specific law firm for the legal structures that enabled the 2008 collapse. But its index contains the names of firms, transactions, and regulatory opinions that reward careful reading.

The Derivatives Question No One Wanted to Ask

Brooksley Born, as chair of the Commodity Futures Trading Commission in the late 1990s, attempted to regulate over-the-counter derivatives before they metastasized into the instruments that nearly destroyed the global financial system. She was overruled—by the Treasury, the Fed, and the SEC—after a sustained campaign by financial institutions and their legal counsel arguing that regulation would “disrupt” an efficient market. The legal memoranda supporting that position were not written by legislators. They were written by the Wall Street law firms whose clients stood to lose billions in compliance costs and margin requirements. As the Washington Post documented in a 2009 investigation, the legal and lobbying apparatus arrayed against Born’s proposal represented one of the most coordinated exercises of private legal influence over public policy in the post-war period.

Sullivan & Cromwell was not alone in this landscape. Davis Polk, Skadden Arps, Simpson Thacher—the roster of firms that shaped the legal architecture of finance is longer than any single profile can contain. But Sullivan & Cromwell has a particular claim to primacy: it has advised Goldman Sachs on virtually every significant transaction and regulatory matter since the 1970s, a relationship that grants it an almost unparalleled window into the mechanics of how markets are made and, occasionally, gamed.

“Sullivan & Cromwell does not merely advise Goldman Sachs. In any meaningful structural sense, Sullivan & Cromwell helped to invent Goldman Sachs as a public company.”

That is less hyperbole than it sounds. The firm managed Goldman’s 1999 IPO, one of the most closely watched offerings of the dot-com era, structuring a partnership-to-corporation transition that preserved the firm’s culture while accessing public capital markets. The legal documents that governed that transaction—the partnership agreement modifications, the governance frameworks, the lockup structures—were instruments of institutional design as much as legal compliance.

The International Dimension: Exporting the Legal Architecture of American Finance

Sullivan & Cromwell’s reach is not confined to lower Manhattan or Washington regulatory corridors. The firm has served as lead counsel on sovereign debt restructurings, cross-border mergers, and privatization transactions across Latin America, Europe, and Asia. When Argentina restructured its debt in the aftermath of its 2001 default—the largest sovereign default in history at the time—American law firms, applying New York law principles to Argentine obligations, played a decisive role in determining which creditors recovered what, and on what timeline.

This is the often-overlooked international dimension of elite law firm influence: the fact that New York law governs a disproportionate share of global financial contracts means that New York law firms effectively set the terms of financial relationships between parties who may never set foot in the United States. The International Monetary Fund has noted in successive reports on sovereign debt restructuring that the reliance on New York-law documentation in international bond markets creates systemic asymmetries—between creditors and debtors, between sophisticated institutional investors and sovereign governments with limited legal resources—that have profound implications for financial stability.

A London Footnote That Illuminates the Architecture

The 2012 restructuring of Greek sovereign debt offers a revealing case study. The so-called Private Sector Involvement (PSI), which imposed haircuts on private creditors, was structured under English and New York law with heavy involvement from the major Anglo-American law firms. The legal engineering required to activate collective action clauses, manage holdout creditors, and satisfy the requirements of multiple legal systems simultaneously was, in effect, a demonstration of legal architecture at global scale. The creditors who recovered most were those whose bonds had been issued under legal frameworks that their lawyers had helped design.

The FTX Reckoning: When the Architecture Failed

No treatment of elite law firm influence is complete without confronting its limits. The collapse of FTX in November 2022 revealed something that the legal community found uncomfortable: that the most sophisticated legal structures are no protection against outright fraud. Sullivan & Cromwell had represented FTX as outside counsel and then, controversially, was appointed as lead restructuring counsel following the firm’s bankruptcy—a dual role that drew sustained criticism from the bankruptcy trustee and members of the U.S. Senate Judiciary Committee who questioned whether the firm’s prior relationship created irreconcilable conflicts of interest.

The firm denied any impropriety. But the episode illustrated something important: the legal architecture of finance is only as robust as the honesty of the people operating within it. And it raised a question that the profession has not yet satisfactorily answered—when a law firm’s institutional interests become entwined with its clients’ interests over decades of exclusive representation, who watches the watchmen?

Conclusion: Power Without Accountability, and the Reckoning Still Pending

Sullivan & Cromwell will not appear in most histories of Wall Street. Its name does not trend on financial media platforms. Its senior partners do not write memoirs or give TED talks. This opacity is, in a meaningful sense, the firm’s most powerful product: the ability to shape outcomes without ever becoming the visible agent of change.

I find this troubling—not because legal expertise is illegitimate, but because the concentration of that expertise in a handful of firms representing a handful of institutions creates something that does not appear in any regulatory framework: a private legal infrastructure that operates at global scale with minimal public accountability. The Administrative Conference of the United States has examined revolving-door dynamics in regulatory agencies; it has examined notice-and-comment rulemaking. It has not, to my knowledge, examined the systematic influence of relationship-based legal counsel on the shape of financial regulation.

That examination is overdue. As artificial intelligence reshapes the economics of legal services, as regulatory fragmentation accelerates across jurisdictions, and as financial crises continue to expose the gap between the law as written and the law as practiced by the people who draft it, the question of who designs the legal architecture of finance—and in whose interest—is no longer academic. It is the central governance question of the next century of global capitalism. Sullivan & Cromwell, and the small cohort of firms that sit beside it at the apex of the corporate legal hierarchy, have been answering that question, quietly, for 145 years. The rest of us are only just beginning to notice.