Joseph Flom, who died last month at age 87, was perhaps the most important figure in the New York legal community since the men who created the city's great firms in the early decades of the 20th century. Flom spent the first 25 years of his career becoming the country's best lawyer in an obscure field that those firms disdained, then used his skill in M&A law to challenge them for supremacy not just in New York but nationally and internationally.
"As a person who changed the face of law firms in America, there's nobody who comes close to Joe Flom," says Stephen Fraidin, a partner at Kirkland & Ellis LLP.
That statement is true literally as well as figuratively, Fraidin notes. "When I graduated from law school in 1964, if you were any of the following -- Jewish, Catholic, African-American, openly gay or a woman -- you could forget about getting a job at all but a very small number of law firms. It was really the growth of M&A that changed law firms dramatically. He professionalized M&A and made it into a specialty, and as soon as that happened, the law firms said, 'We can't be so discriminatory, not because of moral reasons, but because we want to get the best and the brightest.' "
Flom grew up in Brooklyn in a working-class Jewish family. He made law review at Harvard Law School, but upon his graduation in 1948, his only job offer was from the three-lawyer firm that became Skadden, Arps, Slate, Meagher & Flom LLP. He became an expert in hostile takeovers, which moved to the center of American business in the 1970s and 1980s.
"Hostile activity gave you access to the board in a way no other corporate activity did," says William Frank, who joined Skadden in 1969. "Joe said that if you're in front of the board of one company, you're in front of 10 companies, because CEOs and directors are on the boards of other companies."
Flom had a broad vision of the opportunity before him. "I remember him in 1978 talking about being 1,000 lawyers," says Robert Sheehan, Skadden's executive partner from 1994 to 2009. "He thought there were no real limits other than constraints that would be put upon us by conflicts." In 1978, Skadden had fewer than 200 lawyers in three offices; it now has 10 times that number in 24 offices.
Flom added partners who specialized in areas other than M&A, then cross-sold their services to clients who paid Skadden on retainer to avoid the possibility of facing the firm in a hostile deal.
Says Sheehan, "That allowed us to encourage the general counsel to use us when there were a few months left on the annual retainer. We said, 'We've done the annual review for you, we've appeared before the board, why don't you use some of our other services?'?" Skadden began phasing out the retainers by the late 1980s.
As Flom was generating immense amounts of business, he and his partners had to manage a rapidly growing firm. Skadden M&A partner Peter Atkins says that by the late 1970s, "you could see that we were getting too big to have part-time management." Skadden tapped the consulting firm Arthur Young & Co. for advice in the late 1970s, then hired Earle Yaffa, the consultant on the study and a nonlawyer, to run the firm's administration -- an exceptionally unusual step at the time. A year later, Skadden corporate partner Peter Mullen became the firm's executive partner, giving up a successful practice to devote his time to management.
By the 1990s, Skadden's growth, ability to cross-sell and administrative infrastructure had become standard at large U.S. law firms. "You had to begin thinking about the law firm as a business that had to have a strategic direction," says Alan Klein, a partner at Simpson Thacher & Bartlett LLP.
Flom saw nurturing younger lawyers as a critical piece of that strategy. Says David Fox, who spent his career at Skadden before moving to Kirkland & Ellis in 2009, "A lot of the relationships I have, Joe introduced me to, and they were relationships he made me think I introduced him to. He didn't say this is me, me, me, he said this is you, you, you. It's a personal attribute he had that was unique."
It was also integral to Skadden's success, Atkins says. "Joe got the idea that this is an institution and the institution can outlive any individual, but the only way it will do that is if people are given the opportunity to develop, grow and eventually take over."