People are the product - forgotten lessons from Joseph Flom
Very rarely has a corporate lawyer been so celebrated during life, but judging the legacy of Skadden Arps Slate Meagher & Flom pioneer Joseph Flom in the wake of his death last week, his career still looks hugely instructive for the global legal market he helped to create. Perhaps most revealing is a detailed profile of Flom from 1989 penned by The American Lawyer founder Steven Brill, which charts his achievement in pushing Skadden from outsider to the firm that arguably eclipsed its establishment rivals. From an upstart practice founded in 1948 - Flom was the firm's first associate - Skadden seized a huge opportunity when Manhattan's legal elite turned its nose up at the emerging field of proxy fights and hostile takeovers, which evolved through the 1960s and came to transfix Wall Street in the 1980s.
March 02, 2011 at 07:51 PM
3 minute read
Very rarely has a corporate lawyer been so celebrated during life, but judging the legacy of Skadden Arps Slate Meagher & Flom pioneer Joseph Flom in the wake of his death last week, his career still looks hugely instructive for the global legal market he helped to create.
Perhaps most revealing is a detailed profile of Flom from 1989 penned by The American Lawyer founder Steven Brill, which charts his achievement in pushing Skadden from outsider to the firm that arguably eclipsed its establishment rivals. From an upstart practice founded in 1948 – Flom was the firm's first associate – Skadden seized a huge opportunity when Manhattan's legal elite turned its nose up at the emerging field of proxy fights and hostile takeovers, which evolved through the 1960s and came to transfix Wall Street in the 1980s.
But Skadden was far more than lucky and opportunistic. The firm grew and developed at a startling rate through the late 1970s and 1980s and in doing so reshaped its industry. The closest the market has managed since is Clifford Chance at the peak of its 1990s swagger or Latham & Watkins in the noughties.
Skadden developed tactics that would become commonly-used (and even more commonly misused) in the years to follow. The vision was to build a legal empire on the back of core transactional disciplines. Skadden pursued growth through lateral hiring, developing methods for identifying and integrating partners that, decades on, many firms should review. It also ushered in professional management backed by detailed financial information.
So far, so global law firm 101. But much of Skadden's thinking still seems ahead of its time. Rather than being a monolithic brand, Flom's vision was for a cluster of high-margin boutiques backed by an effective model of cross-selling – which was itself reinforced by partner remuneration and management. The 'boutiques within a legal giant' model also kept teams nimble and entrepreneurial. Skadden also dared to lavishly invest in back and middle-office operations.
The idea was simple: allow your lawyers to be lawyers and provide a means for the hungry challenger to outclass the service offered by more established rivals.
What is particularly interesting about Skadden under Flom is the idea that in an increasingly complex market, in which client/law firm relationships were breaking down, what mattered was having the best people, not institutional relationships. And if people were now the product, the firm that could deliver that could seize huge commercial opportunities.
As a whole, such notions contrast with the current orthodoxies of global law in which firms compete to cut costs on infrastructure while cross-selling has been replaced by squeezing more out of a tiny club of bluechip clients. There are good reasons for some of these shifts but, given that the dominant form management style of global law seems essentially defensive, some lessons from Flom are worth revisiting.
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