Lord, Geller, Federico, Einstein

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Founded in 1967; purchased by J. Walter Thompson Co., 1974; continued as an autonomous unit until JWT became part of WPP Group, 1987; became independent again when Richard Lord formed a new agency, 1988; merged into Dentsu Y&R, whose U.S. operations became Lord Dentsu, 1990; sold to Spier, New York, 2001.

In July 1967, Richard Lord, Gene Federico and John Southard formed Lord, Southard, Federico. In March 1968, Mr. Southard left and was replaced by Norman Geller, and the agency name became Lord, Geller, Federico. In 1972, Nadeen Peterson became a partner and the agency became Lord, Geller, Federico, Peterson. Ms. Peterson left in March 1974, and the agency name morphed again, to Lord, Geller, Federico & Partners. Arthur Einstein was with the agency from the start, although his name was not added to the logo until 1978.

Billings rose steadily during the early years, reaching $9.6 million in 1973, with the agency handling small but prestige accounts (such as Steinway pianos, Hennessy cognac, jewelry retailer Tiffany & Co., The New Yorker and Movado watches).

Believing the shop needed the support of a larger agency to grow, Mr. Lord courted J. Walter Thompson Co., which acquired Lord Geller in 1974 for $325,000. Under the terms of the acquisition, Lord Geller retained full autonomy and reported directly to JWT top management.

IBM and the "little tramp"

In 1978, Lord, Geller, Federico, Einstein won the account to launch IBM Corp.'s personal computer, and the agency's creative staff came up with the idea of using a silent "spokesperson," Charlie Chaplin's "little tramp" character. The campaign, dominated by stark b&w images reminiscent of the silent film era, broke in print and on TV in September 1980.

In 1984, billings soared to $207 million, and the agency sought to balance its huge IBM billings with other large accounts. However, its efforts were stymied by conflicts of interest between potential new accounts and the clients of the larger JWT. By 1988, the agency had billings of $222 million, $150 million of which were with IBM.

Around that time, the agency partners began thinking about a buyback from JWT, but those plans were derailed by a crisis that brought down the agency.

In June 1987, JWT agreed to be acquired for $566 million by the WPP Group, a British holding company headed by financier Martin Sorrell. Messrs. Lord and Sorrell had a cordial meeting prior to the merger, but in the months afterward Mr. Lord felt that his options and independence were more constricted than ever.

About the same time, Mr. Sorrell formed a network of European agencies called Conquest Europe to be run by JWT managers in Milan but associated with Lord Geller. Mr. Lord flatly rejected the idea, but Mr. Sorrell went ahead with a press release that indicated affiliation between Conquest Europe and Lord Geller.

Mr. Lord set out to buy the agency back from WPP, but Mr. Sorrell was unwilling to consider a sale. Relations between Lord Geller and WPP soured further when Lord Geller was invited to compete for the $100 million Saturn automobile account. In February 1988, concerned about a conflict with JWT's Ford Motor Co. business, Mr. Sorrell insisted that Lord Geller cut off all contact with Saturn immediately.

The last-minute withdrawal was a major embarrassment to an agency that put a high value on its independence.

Executive defection

In March 1988, with discussions between WPP and Lord Geller concerning future executive contracts at an impasse, Mr. Lord and five senior Lord Geller executives abruptly quit their own agency. Among the principals, only Mr. Geller, who was 67 years old, and Mr. Federico, 70, remained at the agency. The others immediately set up a new agency called Lord Einstein O'Neill & Partners, with Y&R taking a 49% stake in the firm.

Mr. Sorrell turned to the New York State Supreme Court, arguing that Mr. Lord and his partners had engaged in a conspiracy to sabotage Lord Geller in a manner that "breached their fiduciary duties and the loyalty that they owed the plaintiffs."

The conspiracy issue took on new dimensions when detectives hired by WPP discovered several uncirculated memos written by one of the defecting partners referring to "clients we would probably want to take." The court issued an injunction against any other Lord Geller employees moving to the new Lord Einstein agency and blocked Messrs. Lord and Einstein personally—but not the new agency—from working with any former Lord Geller clients.

In April, Saab (never a Lord Geller client) awarded its $35 million account to the new agency, becoming its cornerstone business. After assigning a single project to Lord Einstein, IBM pulled its entire account from Lord Geller and split it between Lintas and Wells, Rich, Greene. Eight days later, Lord Geller, having also lost Dean Witter, Fuji and The Wall Street Journal, laid off a third of its staff.

The matter lingered in the courts for 17 months until a settlement was finally reached in October 1988 in which Lord Einstein O'Neill & Partners paid WPP $7 million. No public statements were made beyond the amount of the settlement.

In July 1990, WPP merged Lord, Geller, Federico, Einstein with Brouillard Communications. Lord Einstein O'Neill & Partners fared somewhat better in the short run, reaching billings of $78 million in 1989. However, its fortunes reversed sharply when Saab took its $25 million account away from the agency in January 1990.

Later that year the Lord Einstein name disappeared into the Dentsu Y&R partnership, whose U.S. operations became Lord Dentsu. By 2000, that unit had evolved into an integrated marketing communications unit called the Lord Group, with Richard Lord, then 74, still in place as chairman.

In 2001, Y&R and Dentsu, which each held 50% of Lord Dentsu, sold their interests to Spier, New York, an agency that specializes in book advertising.

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