Lee was born Solomon Lazarus Lee in 1859 at 12 Keppel Street, Bloomsbury, London. He was educated at the City of London School and at Balliol College, Oxford, where he graduated in modern history in 1882. In 1883, Lee became assistant-editor of the Dictionary of National Biography. In 1890 he became joint editor, and on the retirement of Sir Leslie Stephen in 1891, succeeded him as editor.
Lee wrote over 800 articles in the Dictionary, mainly on Elizabethan authors or statesmen. His sister Elizabeth Lee also contributed. While still at Balliol, Lee had written two articles on Shakespearean questions, which were printed in The Gentleman's Magazine. In 1884, he published a book about Stratford-on-Avon, with illustrations by Edward Hull. Lee's article on Shakespeare in the 51st volume (1897) of the Dictionary of National Biography formed the basis of his Life of William Shakespeare (1898), which reached its fifth edition in 1905.
In 1902, Lee edited the Oxford facsimile edition of the first folio of Shakespeare's comedies, histories and tragedies, followed in 1902 and 1904 by supplementary volumes giving details of extant copies, and in 1906 by a complete edition of Shakespeare's works.
Besides the editions of English classics, Lee's works include:
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