Lawrence Murphy was born at Wedford, Ireland, in 1831. He moved to the United States and enlisted in the 5th Infantry. During the American Civil War he joined the Union Army and by the end of the conflict he had reached the rank of major.
In 1869 Murphy moved to Lincoln County where he established a firm called L. G. Murphy & Co. In 1874 he made a fellow soldier and Irish immigrant, James Dolan, a business partner. In 1874 the two men established the Murphy & Dolan mercantile and banking operation. John H. Riley, another Irish immigrant, also became a partner in this venture. The company was highly successful and won contracts to supply beef to both the Mescalero Apache Reservation and Fort Stanton.
Lawrence Murphy and his friends were disliked by the small farmers in Lincoln County as they were forced to pay high prices from Murphy & Dolan while at the same time they had to accept low prices for their cattle.
In 1876 Alexander McSween and John Tunstall set up a rival business. These two men were given the support of John Chisum, the owner of a large ranch and over 100,000 head of cattle. McSween and Tunstall now established J. H. Tunstall & Co, a shop and bank close to the one owned by Dolan, Murphy and Riley.
IIt is said that Dolan attempted to goad Tunstall into a gunfight. Tunstall refused to use violence himself but he did recruit Billy the Kid to help him in his business dispute. On 18th February, 1878, Tunstall was killed by William Morton, Jesse Evans and Tom Hill. This incident started what became known as the Lincoln County War.
Lawrence Murphy died of cancer on 20th October, 1878.