Photo of Skadden executive partner Eric Friedman provided by the firm.
Who can blame him? The Skadden Fellowship Foundation is a singular accomplishment in American law – an audacious, extravagant gift to the profession and poor Appalachians, Mexican-American children in Los Angeles, juveniles in Philadelphia and Iraqi refugees and war veterans across the country.
In its 22nd year, two things stand out about the program, which was started with a $10 million endowment to commemorate Skadden's 40th anniversary.
One, no other law firm - anywhere, ever - has built a public interest corps on this scale. More than 90 percent of the 620 fellows have remained in public interest after their two-year paid stint at the so-called law firm without walls.
And two, Skadden is the firm that did it.
In its 62 years, Skadden has redefined the modern American law firm. Forged by a cadre of scrappers who were not part of New York's white-shoe elite, Skadden architected many of the hard-hearted dealmaking maneuvers that transformed corporate law. Its leaders began to run the firm using strategic business principles when other firms viewed themselves as equal parts civic institution and professional association.
And, in expanding, it made few friends as it hired top lawyers in every market it entered, with no concession to their attendant flotsam.
But a funny thing happened to the legal profession in the past 20 years. American business grew, its legal needs became vastly more complex, and Skadden's singular focus - what's good for its clients is good for Skadden - a mantra for the age. Call it the Zen of Skadden.
There are seven U.S. firms, give or take, that can plausibly claim they are the best in the U.S., whether measured by money, power, bodies or exclusivity.
As a whole, however, no law firm has had the impact on the nation's legal landscape as has Skadden over the past two decades.
"We walk through walls for our clients," says Friedman, who became executive partner in 2009, only the third person to hold the post. "That's our way to visually articulate what it's all about. We talk about our firm values as a constant reminder of what we're living up to: performing the highest quality legal work; client service and intensity of effort; teamwork and collegiality; the highest ethical standards and a commitment to social responsibility and diversity in the law.
"For us, that is what we strive for as lawyers. For me, you've got to live it, and that's what our partners all live up to as well," says Friedman.
Skadden built those walls it now walks through brick by brick, growing to be the world's third-largest firm lawyer by lawyer, partner by partner, client by client. It has assembled a corps of nearly 2,000 of the world's best lawyers, yielding more than $2.2 billion in annual revenue.
It has redefined what a "national" law firm is by its time-honed method of building out its presence in key legal markets. Rather than enter a city by acquiring a firm or large group, it hires a star or two, blends them with Skadden veterans and gets down to business. As a result, Skadden is unsurpassed on Lawdragon's list of the 500 Leading Lawyers in America each year since it was first published in 2005.
Routinely, the firm places 20-plus lawyers on the guide, selected by their peers and independent editorial assessment of the top lawyers guiding the biggest deals and cases in the nation's most important markets.
"We were never interested in just being present in a practice or market," Friedman explains. "We wanted to be the best across practices, geographies. That's what sets us apart from our peer firms. We had the confidence."
In the 1970s, the firm began its East Coast expansion, opening in Boston (1973), Washington, D.C. (1975), and Wilmington, DE (1979); the "80s brought seven more offices, including Los Angeles (1983), Chicago (1984) and its first international staging (Tokyo, then London, Hong Kong and Sydney); the "90s rounded out its national footprint, with Houston (1993) and Palo Alto (1998), and saw a concentration on global efforts (Paris, Beijing, Frankfurt) that continues today.
And when it's a buyer's market, watch out. Since the recession began, the firm has added two dozen all-stars, including New York's Chief Judge Judith Kaye, Deputy Director of the Securities and Exchange Commission Brian Breheny, New York Federal Judge Stephen Robinson, Assistant General Counsel to the Commodities Futures Trading Commission Mark Young, Massachusetts Acting U.S. AttorneyMichael Loucks, former O'Melveny litigation heavyweight John Beisner and stand-out Silicon Valley trial lawyer Allen Ruby.
A crown jewel of those acquisitions, of course, is Greg Craig, who joined Skadden when he left his post as White House Counsel rather than return to Williams & Connolly, one of the nation's very best law firms by any measure. Craig has earned legal legend status over 38 years as a leader in civil and criminal courtrooms, legislatures, the Oval Office and boardrooms.
He defended the Washington Post in Watergate, John Hinckley after he shot President Reagan, Alexander Solzhenitsyn when he was sued for libel by individuals involved in U.S. publication of The Gulag Archipelago, President Bill Clinton in impeachment proceedings, United Nations Secretary General Kofi Annan in the Volcker Commission investigation and the father of Elian Gonzalez in winning custody of his son.
"I was headed straight back to Williams & Connolly, no question," said Craig, who also served Madeleine Albright when she was Secretary of State and was a longtime senior advisor to Senator Ted Kennedy. "The homing radar was beeping and I was going back. This would have been the fourth time I'd left and come back" to Williams & Connolly, the place he learned to practice law.
But his time in the White House had opened the window to a fresh perspective on the days ahead. So when Joe Flom, David Zornow and Cliff Sloan asked that he hear them out before returning to the nest, he listened.
"I realize that I'm nearer the end of my professional life than the beginning, so I couldn't postpone any longer the idea of setting up a global practice," Craig said. "I realized this was a group of people I'd be happy practicing law with and that the platform is huge."
Craig recently saw Skadden's platform in action when he was hired by Metromedia to win release of two of its employees jailed in the Republic of Georgia. This was a complicated task, as Georgian legal structures are still a work in progress, and the concept of bail is unknown.
However, those are small hurdles for Skadden's scale and prowess. Craig was hired at Thanksgiving, contacted the firm's international arbitration specialists in London, got advice from its European human rights experts on entrapment standards in the EU and conducted a credible international arbitration by year's end. On Jan. 4, the employees were released.
"We were able to move more quickly on a number of fronts than you could do anywhere else," says Craig, drawing as well on the firm's office in Russia. "We came close to setting up an office in T'bilisi," he jokes.
Craig's choice mirrors that of Los Angeles - Tom Nolan, who was the top trial attorney at Howrey in 2004, when he was approached by Skadden. Already a monstrous business developer, the Skadden platform has enabled Nolan to expand his portfolio to the size of a small island nation.
"There is no question that my move to Skadden provided me with a much more powerful platform to compete for the biggest cases in the U.S. and internationally," said Nolan, who has won and collected trial judgments in excess of $1 billion and, on the defense side, beaten back trial claims in excess of $1 billion.
Shortly after joining Skadden, he became lead trial defense counsel in the WorldCom securities class action and has since represented Merrill Lynch, JP Morgan, Morgan Stanley, KPMG, Rosetta Stone in its trademark battles against Google, Peter Morton of the Las Vegas Hard Rock Hotel and Casino and MGA in the infamous Bratz-Mattel battle.
"But what's just as important is that Skadden allows lawyers to practice law," says Nolan, who is currently embroiled in a class action trial against Wells Fargo in Los Angeles. At prior firms, his roles in firm management siphoned off his focus on what he does best: trial work. At Skadden, although he co-chairs the West Coast litigation department and sits on the firm's compensation committee, those assignments do not distract him from helping clients facing the fights of their lives. "For a trial lawyer, it's a dream come true."
"We have as many stars as any firm, but we're not a star system," says Friedman. "I think our highest-profile partners realize that part of the secret of their success and their ability to accelerate their own career development is to team up with other partners in other practices or geographies to deepen client relationships. It is the way to win."
Or, as securities litigation head Jay Kasner puts it, "what we do for the greater good also ends up benefiting us individually."
Skadden's success is deeply embedded in the burn of deal culture. It's intense, focused, multidisciplinary and fast.
"What you're seeing is the historic core culture which came from the early takeover days. Think about how those worked," explains Tom Kennedy, an M&A partner and the architect of the firm's visionary Global Knowledge Strategy effort.
"A large group of individuals was assembled quickly and without too much hierarchy or stratification, to work together across multiple disciplines in a concentrated period of time in all kinds of forums in corporate and litigation," he says. "That led to a historic culture where people from different offices, practices and seniority levels, really learned to work together in a pretty non-stratified way to share knowledge and experience and really focus on getting the task done."
Skadden's dealmakers have helped define every era of corporate law, representing International Nickel Co. in the watershed successful hostile tender offer for Electric Storage Battery; helping Ronald Perelman prevail in his $2.7 billion hostile takeover of Revlon; leading the board of RJR Nabisco through the famous $25 billion acquisition by KKR; fending off Microsoft in its pursuit of Yahoo!; and, more recently, representing Bear Stearns in its Wall Street crash sale to JP Morgan Chase.
Ken King, who co-heads the firm's global corporate transactional practice from Palo Alto, sees the deal mindset as the firm's core competitive advantage.
"It really is the ability to marshal resources around the world, in 24 offices, 13 different countries, 2,000 attorneys in 42 practices. Doing that seamlessly, in a way that's all focused on the client wherever they may be, to further client needs in a very complex manner, is at the core of what we do best," he says. "The firm has a great culture of partners helping each other with a sole focus on what's best for the client. It's not about turf, or what's in it for me. It's how we can work together to get the client from A to B."
Skadden was an ideal fit for King, who had worked for a Japanese trading company in Tokyo for four years before going to law school. Following graduation from Boalt Hall in 1987, followed by a clerkship with then-Judge Kenneth Starr, King interviewed with firms in Northern California.
“I met with a number of law firms and oddly they were all very respectful of each other, but critical of Skadden. They viewed Skadden as having really changed the way law was practiced,” King recalls. “It had caused law to be practiced in a much more client-centric and professional services-oriented way and constituted real competition in every market.”
At one firm, a partner mentioned with disdain having sent Skadden a document in the morning, and receiving a marked-up version that afternoon. “Who are these people who would do such a thing?” he asked.
That perceived faux pas sounded like opportunity to King, who joined Skadden, got lots of opportunity early on and has since handled three of the five largest tech deals, including Yahoo! in Microsoft’s unsolicited $45b acquisition bid and Compaq in its $25b merger with Hewlett-Packard.
The deal culture also spelled opportunity to Jay Kasner when he graduated from Boston University Law School in 1980. The constant deal flow of the ‘80s meant substantial work on injunctions and other expedited hearings required to get transactions closed. “We were young lawyers doing things that oftentimes much more senior lawyers were doing at other firms, taking depositions, arguing in court. At Skadden, it was very much the situation that if you could handle it, you did,” Kasner recalls.
That all changed in the late ‘80s, with the downfall of Drexel Burnham Lambert and the Stock Market crash of 1987. The market for hostile deals – and the corporate control contests that came with them – slowed dramatically. “As a department, we realized we could no longer rely solely on transaction-related work to keep us busy,” says Kasner, who is currently defending subprime cases for Deloitte & Touche, Bank of America and Merrill Lynch.
The firm had, of course, a huge deal litigation capacity, and had begun to assemble strong practices in mass tort (Sheila Birnbaum), antitrust (the late Frank Rothman); and intellectual property. In the last 20 years, Skadden built a world-class litigation team that mirrors the accomplishments of its dealmakers on behalf of clients including Brocade, Broadcom, Merrill Lynch, Bank of America, Baxter, Putnam, Ernst & Young, Sprint Nextel and Anadarko Petroleum.
“The evolution of our group over the past 20 years has been tremendous. The department took a clear-eyed look at where we were and where we wanted to go, and I think we have gotten there,” says Kasner, who won the landmark Dabit v. Merrill Lynch in the U.S. Supreme Court, significantly curtailing the ability of plaintiffs to file class action cases in state courts.
Zornow was among the high-profile trial lawyers to join Skadden, after stints in the U.S. Attorney’s Office for the Southern District of New York; as an Associate Independent Counsel in the Iran-Contra investigation; and as a prosecutor in the trial of Oliver North. Having tried cases with and against legendary litigators including Rudy Giuliani and John Keker, he saw a great opportunity to expand upon the “terrific litigation team” at Skadden.
“At Skadden, I am fortunate to have as partners a superb array of trial lawyers who truly are the ‘best of the best,’” says Zornow, who is the Global head of Skadden’s Litigation/Controversy practices. He is currently defending Dr. Yves Benhamou, a French liver doctor embroiled in the FrontPoint insider trading scandal; Rajiv Goel, the former Intel employee charged in Galleon; Dell Inc. in the SEC investigation; Frederick Schiff, the former CFO of Bristol-Myers Squibb; and Martin Liechti, UBS’ former head of wealth management for the Americas.
An avowed Bob Dylan nut, Zornow brings Dylan’s philosophy to Skadden’s Zen. “He not busy being born is busy dying,” he says, of the firm’s constant pursuit of improvement. He plays a key role in keeping an eye out for top talent, like Craig and Robinson, who add further dimension to Skadden’s deep, deep trial bench.
Nolan experienced the profound difference of Skadden’s platform just one week after living through the grueling four-month MGA-Mattel trial. Freedom Communications called and asked if he could parachute into a case that was set for trial in two weeks. A lot was riding on the dispute for the financially strapped newspaper industry, which faced the possibility of higher costs if the trial determined that newspaper carriers were employees rather than independent contractors.
Nolan started calling his partners, asking if the firm should take over at such a late hour. “‘No other firm would do this,’ one partner said,” according to Nolan. “That’s because,” said another, “no other firm could.”
Lawyers from across Skadden assembled on a dime to try the case, which was settled on favorable terms for Freedom.
As one of Skadden's leading M&A partners and co-head of its Private Equity practice, Eileen Nugent regularly draws on Skadden's ability to pull together a corporate team for a deal of any complexity, no matter where it may be. Last year, she helped Endo Pharmaceuticals buy the nation's sixth-largest generic drug maker, Qualitest Pharmaceuticals, for $1.2 billion, while leading a team that represented Burger King Holdings in 3G Capital Partners $3.7 billion buyout of the company.
“As a firm, we have the ability to tap a virtually unlimited group of talented attorneys with experience in every facet of the deal,” says Nugent, who was a corporate counsel before joining Skadden, and thus innately aware of the value of responsiveness. “Skadden's deep expertise in dealmaking allows us to help our clients in almost any situation they find themselves. It's a very important attribute of what we bring to the table.”
Friedman, who was a summer associate in 1988, joined Skadden in 1989 after graduating from the University of Pennsylvania. In the 21 years since, Skadden has “improved and changed in fundamental ways,” he says.
The firm he joined was a 1,000-lawyer firm with a heavy nationwide geographic footprint predominantly focused on corporate transactions and litigation; the one he today leads is a broad, international, interconnected multidisciplinary force of dealmakers and litigators, capital markets, bankruptcy and white-collar experts, and a deep regulated industry and government enforcement bench, with specialists in healthcare and Dodd-Frank financial services, energy and international arbitration. Since he’s been executive partner, he has broken down geographic walls, ensuring that all practices are run seamlessly and globally.
“It’s a vastly different firm than the one I joined, that has been able to change and stay ahead of the trends, really to anticipate the trends,” says Friedman.
Another key focus for Friedman is diversity within the firm and the profession. Skadden’s dedication to diversity is longstanding. The firm hired its first woman attorney in 1959, and made the first minority attorney partner in 1979. Its first female partner was tapped in 1981. The firm has been named among the “Best Places to Work for LGBT Equality” for three years running, and has received a perfect score on the Human Rights Campaign Foundation’s Corporate Equality Index. In addition to enhancing the diversity of talent at Skadden, Friedman wants to build a stronger pathway to the profession for a broader range of people.
To expand the pipeline for minority representation in the legal profession, the firm recently endowed the $10 million Skadden Honors Program in Legal Studies at the City College of New York, from which founder Joe Flom graduated. Freshmen and sophomore students at CCNY, whose student body is 80 percent of diverse backgrounds, will be able to enroll in pre-honors sequences; juniors and seniors are selected for a two-year scholars program that provides financial support, mentoring, LSAT preparation and a variety of other assistance.
“It’s designed to light the spark and excite their interest in big law,” said Friedman, who underscored that participants don’t have to go to law school and they don’t have to come work for Skadden. “Our goal is to lead the way in implementing strategies that benefit the legal community and our society for the long term.”
While firms that practiced as civic institutions first and businesses second have fallen by the wayside, the firm that practiced as a business first has embraced as its companion the value of civic leadership.
Skadden lawyers donated 200,000 hours of pro bono last year (in addition to the Fellowship program), with individual lawyers and the firm earning recognition for their contributions to public interest. The firm recently established the Sheehan Asylum Project at the University of Pennsylvania to help human rights asylum victims navigate the legal system.
“Our core values are not just a motto. We live them every day,” says Friedman.
As Skadden’s leader, Friedman spends much of his time assessing which industries and markets will emerge in need of top legal talent. He knows the resulting fees will fuel one of the world’s most profitable law firms. But, too, they will support a game-changing firm that increasingly defines its success not just by client engagements, but also by the role its attorneys play as leaders in the broader legal profession. The consummate outsiders who turned the legal profession upside down.
“We’re committed to performing our social responsibility at the same standard we practice law,” says Friedman. “Trying to innovate, trying to make a difference.”
Call it the Zen of Skadden.