To Melvin A. Eubanks, WR Lazard & Co. is like the Chicago Bulls sans Michael Jordan: The team no longer has a superstar, but it's still a championship contender.

"He'll be missed," Eubanks said of the firm's founder, Wardell R. Lazard, who died in May. "But one of the things we're trying to do is get away from the star system and let people know there is a team here." Without their star player, "the Bulls still are respectable. They're still a first-line team," said Eubanks, who was named chairman and co-chief executive officer of the firm shortly after Lazard's death.

However, in their first season season without Jordan, the Bulls advanced to playoffs as expected, but were defeated by the New York Knicks.

So in proving their mettle, WR Lazard executives want to do something the Bulls could not: At the end of the season, they still want to be at the top of their game.

In recent weeks, the unusual circumstances of Wardell Lazard's death -- he died in Pittsburgh of an accidental drug overdose -- have opened the firm to intense scrutiny and widespread speculation about its prospects.

It also has propelled Lazard's widow, Betty, back into a key role at the company and spawned a whirlwind, nationwide roadshow by top executives to assure clients of the firm's stability.

As WR Lazard officials strive to move forward, they must combat concerns about whether the firm can overcome the loss of Wardell Lazard and adequately fill his role as client liaison and company pitchman.

They also must dispel perceptions that the company's prospects mirror those of another black-owned investment banking firm, Daniels & Bell Inc., which was crippled by the death of its founder in 1988.

Questions also have been raised regarding whether the Lazard family will sell the closely held company, or whether employees' concerns about the likelihood of such a sale will lead to defections.

As executives work to reassure clients, WR Lazard also must fend off other investment banks and pension fund managers interested in luring away the firm's most lucrative clients and seasoned professionals.

Several companies have also expressed interest in purchasing the firm's asset management business, mainly due to its attractive $2.6 billion investment portfolio, market sources said.

If that weren't enough to rattle clients, WR Lazard is a party to a Manhattan district attorney's office investigation of the New York State Job Development Authority. The Securities and Exchange Commission also is examining WR Lazard's ties to the agency, sources said.

The probes involve the firm's role on several bond transactions and as a swap agent.

Although the SEC routinely investigates investment banks -- and rarely unearths wrongdoing -- the specter of uncertainty alone can make clients skittish, several investment bankers and pension fund managers said.

Like General Electric in the wake of the Kidder, Peabody & Co. Treasury bond trading scandal, WR Lazard executives said they have moved quickly to name a new management team and to thwart perceived problems before they evolve into real ones.

"This is strictly a public relations problem," one market source said. "It's a very delicate thing."

No Plans to Sell

In her first interview since Wardell Lazard's death, Betty Lazard recently told The Bond Buyer that the company will not change hands.

"There are no plans to sell the business," said Lazard, vice chairwoman and principal stockholder of WR Lazard.

Although WR Lazard officials have received more than a dozen inquiries about purchasing the firm or a portion of it, "nothing is for sale," Lazard said. "We cannot continue Wardell's dream if we sell off the company."

To allay concerns about the firm's closely held ownership, details are being finalized to diversify stock ownership among "key personnel," Eubanks said.

"There is a plan afoot to maintain personnel by tying them to the company," Eubanks said. He declined to give specifics.

Uncertainty after Wardell Lazard's death caused employee morale to falter, said Eubanks and Thomas M. Mead, president and vice chairman of the broker-dealer WR Lazard Laidlaw & Mead Inc.

But the stock ownership plan and a policy of keeping staff informed of business developments has changed that, the executives said.

Among employees, "I see a new resolve to work even harder to get this job done," Eubanks said.

According to a 1988 filing with the SEC, the broker-dealer, then known as WR Lazard & Laidlaw Inc., is a wholly-owned subsidiary of WR Lazard & Co. Wardell Lazard owned 85% of the parent company. Mead had a 7% stake, and a former employee, Aaron Spaulding, owned an 8% stake.

A Lazard spokesman confirmed that Betty Lazard now owns more than 51% of the parent. He declined to give more specifics on the private company's ownership.

However, market sources said the only other shareholders are Mead and Kenneth E. Glover, vice chairman and co-chief executive officer of the firm.

Later, A Limited Role

Although Wardell Lazard was the driving force behind his company in its nascent stage, in recent years he played a more limited role, his widow and key executives said.

Lazard left Salomon Brothers, where he worked since 1980, to launch his firm in 1985.

WR Lazard & Co. broke ground as one of the first full-service, minority-owned investment banks, providing public finance, asset management, financial advisory services, and equity research.

In moving forward, WR Lazard executives point to one of the founder's tenets: To grow his company, Wardell Lazard employed a strategy of making business acquisitions and wooing seasoned Wall Street professionals.

At the time of his death, using skills honed during his tenure at the California Public Employees Retirement System from 1975 to 1980, Wardell Lazard oversaw the asset management portion of his company's business, officials said. However, he was not a portfolio manage, nor did he have any direct command over the broker-dealer's operations, company officials said.

He also brought Glover on board as vice chairman and chief administrative officer in 1993, to oversee daily operations.

Glover "was a coup for us," Eubanks said. "Ken has wide experience and is well respected." The addition "was something we really needed at that time," Eubanks said.

"Wardell always talked about having a critical mass of professionals," he said. "So we have people with relationships that are not tied to Wardell."

Sources familiar with the company said that Wardell Lazard employed a relatively loose management style, giving employees free rein to oversee their areas of business. However, Lazard was always available if needed to appear at presentations, one former employee who asked to remain anonymous said.

In the firm's early days, "Wardell was very active in marketing the services of the firm," said Curtis Harris, a senior vice president at Muriel Siebert & Co., and another former Lazard employee.

"Wardell was usually initially the first contact. He was always active in landing the business. Once the business was there" there were people in place to manage it, Harris said.

Memories of Daniels & Bell

Although some have likened WR Lazard's present situation to that which precipitated the decline of another black-owned firm, Daniels & Bell, there are some significant differences.

Travers J. Bell Jr., founder of the firm, which was one of the first black-owned companies to have a seat on the New York Stock Exchange, also died unexpectedly.

His company's fortunes turned as his son, an actor with no business experience, assumed a management role and reportedly squandered funds, while fighting with family members over the Bell estate.

"I don't think there are any parallels here except there was a death," Eubanks said.

Unlike Bell, Wardell Lazard had, in 1993, instituted a company strategy for developing management and gaining new business, and there are "lots more people with lines of authority," Eubanks said.

Bell had not groomed a successor and was responsible for most of the firm's operations.

"I was aware of what happened after Travis' death, and I was aware that we had to be proactive," Eubanks said.

WR Lazard also may have benefited from the counsel of Dwight L. White, former president and chief executive officer at Daniels & Bell, who left the firm after Bell's death to become a principal with WR Lazard.

In addition, Betty Lazard worked with her husband from the company's inception in 1985 through 1990. At one point, as treasurer, Betty Lazard signed employee checks as the only person other than her husband authorized to do so.

She also was aware of the strategic plan, Eubanks said.

Before Lazard died, plans already were underway to teach other family members the business. The couple's oldest daughter, Michell Dickerson, 24, began working late last month as a sales assistant at the firm. Another daughter, Miandre, 21, attends the University of Virginia and is expected to join the company upon graduation in 1995, Betty Lazard said.

Finances Appear Unscathed

Since Wardell Lazard's death, the firm has hired Earl Andrews Jr. as senior vice president in charge of taxable fixed-income and equity trading. Andrews, who worked at the firm from 1985 until 1992, most recently worked for L.M. Capital.

Financially, WR Lazard may be in a better position since Lazard's death, some market sources said.

According to documents filed with the SEC in March 1994, the brokerage firm had net capital of about $1.3 million as of Dec. 31, 1993. The firm also had $2.03 million of liabilities, primarily comprised of senior subordinated debentures.

However, in late 1993, the company negotiated the repurchase of an approximately $2.5 million loan with New Street Capital, the successor to Drexel Burnham Lambert Inc., Eubanks said. The 1988 Drexel loan was used to fund acquisitions including Kuhns Brothers & Laidlaw Inc. It comprised approximately $1.5 million of subordinated debt to the broker-dealer and a $1 million demand note to the parent company, Eubanks said. The final debt repayment is set for January 1995.

Eubanks declined to discuss details of the repurchase agreement, but market sources said the company reduced the size of the debt to approximately $1 million, by repurchasing it for about 38 cents on the dollar.

In addition, the company is rumored to have netted slightly more than $2 million from a key-man insurance policy on Wardell Lazard, sources said.

Seeking New Business

Moving forward with the strategic plan, Eubanks said the firm is actively seeking new business with federal government issuers such as the Federal Deposit Insurance Corp., the Resolution Trust Corp., and the Government National Mortgage Corp.

"All of this new business is a direct result of our planning where resources would go," Eubanks said.

On June 28, the firm underwrote its first municipal issue as sole senior manager since Wardell Lazard's death, an $8.2 million taxable issue for the Pittsburgh Urban Redevelopment Authority. Proceeds from the sale are expected to be used to help keep the Pittsburgh Pirates baseball team in the city.

The firm also was a finalist in New York City's search for a financial adviser.

"They are a firm that grew from strength," said Robert B. Lamb, a professor of finance and management at New York University's Stern School of Business.

Lamb said he believes the firm has a strong enough capital base and experienced professionals. In addition, the firm does U.S. government agency business, corporate and equity trading and underwriting, while others "are moving in that area."

However, Lazard's asset management business could be affected by Wardell Lazard's death, Lamb said.

"Lazard pretty much ran that part of the firm," Lamb said. "Because he devoted so much of his energies" to asset management, that is where his loss may be felt the most, Lamb said.

"A lot of this is personal relationship business," Lamb said.

"Five minutes before his death, I would have said they had a greater depth of management and greater expertise than most women- and minority-owned firms throughout the country," Lamb said.

But publicity could hurt the firm, he said, comparing the situation to First Albany Corp. after widely-publicized allegations of wrongdoing surfaced against a key officer there, Mark S. Ferber.

"The effect on First Albany when Ferber went afterward has been disastrous," Lamb said.

WR Lazard has lost three asset management clients since Lazard's death, officials said. The firm managed less than $100 million for the clients. None of the clients said Lazard's death was the reason for their departure, said company executives, who declined to give more details.

But Lazard officials are keeping an eye toward the future.

"We've added staff, we've added business, we're moving forward," Eubanks said.

"We hoped it would be by now" that people would see the company is advancing, he said.

Top 10 Minority-Owned Firms Lead- Managed(*) Rank([dagger])Grigsby Brandford& Co. $256.7 1Reinsos & Co. 201.8 2W.R. Lazard & Co. 172.1 3E.J. De La Rosa &Co. 127.6 4Pryor, McClendon,Counts & Co. 111.2 5Artemis CapitalGroup, Inc. 87.4 6Smith, Mitchell

InvestmentGroup Inc. 63.5 7M.R. Beal & Co. 43.3 8Guzman & Co. 26.5 9Estrada Hinojosa& Co. 16.8 10 (*)In millions. ([dagger])First half 1994 results.Source: Securities Data Co.

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