When Alfred Youngwood became the first democratically elected chairman of Paul, Weiss, Rifkind, Wharton & Garrison in 1999, the firm was going through an anxious transition. Its longtime leader, Arthur Liman, had died in 1997, and Paul, Weiss was trying to find its way in his absence. “He took over at a very challenging time,” says Brad Karp, the current chairman of the New York firm. “There was a void at the helm.”
After a decade of Youngwood’s steady, careful leadership, Paul, Weiss emerged stronger than ever, financially and culturally. Not only has the firm been one of the most profitable over this span, but it has appeared on our annual A-List [click here for Power Shift from the July 2009 issue] every year since we started the project in 2003, showing its continuing commitment to pro bono work, diversity, and associate development.
For this accomplishment, as well as his community service, we award the unassuming Youngwood our first Law Firm Distinguished Leader Award. “He embodies values that can make a law firm great: pro bono, diversity, excellence, professionalism, and collegiality,” says Karp. “He always placed the firm’s interests first and foremost. It was never about him.” Says partner Jeffrey Samuels: “Alfred really held us together. Every day that he was chairman of the firm, he reinforced the glue among the partners that was so tremendously important.”
Outside the firm, Youngwood devoted his talents and energies to Central Synagogue in Manhattan, where he was president from 2003 to 2006. Since retiring from Paul, Weiss at the end of 2008, he has taken up a new challenge, working pro bono for the New York City Department of Education on programs for children with disabilities and special needs.
To the 71-year-old Youngwood, leading a law firm is a straightforward, but not simple, matter. “Managing a law firm is all about people,” he says. “Listening to people and caring about people and being part of their lives.”
Paul, Weiss’s success, as Youngwood sees it, is mostly about what the firm didn’t do. “The story of Paul, Weiss is not one of dramatic changes. We have grown very gradually in a very purposeful and moderate way,” he says, noting that the firm has never absorbed a large group of laterals. (During his tenure, Paul, Weiss’s head count increased a little more than the average for Am Law 100 firms–to 647 lawyers–but it kept a tight rein on making new partners. It has only 18 more partners than it did in 1999.) “I think slow, accretive growth helps the fabric of the firm and the ethic of the firm,” he says.
Youngwood also advocated for keeping Paul, Weiss partner compensation largely on a lockstep system. “I think that leads to a more energetic and more cohesive and more cooperative delivery of legal services,” he says. Karp notes: “Alfred believed in traditional law firm values. A lot of firms were increasing in size and jettisoning compensation models to pay stars lots of money. [Alfred's views] may have been unpopular at the time, but in the end it made the firm stronger.”
Under Youngwood, the firm’s revenue grew from $230 million in 1998 to $692 million in 2008, while profits per partner more than tripled, from $825,000 to $2.7 million last year. Youngwood didn’t do anything drastic to raise profits. The firm expanded its financial services practices by growing its relationship with Citigroup Inc. and other institutions, and it brought in a few key lateral partners, including litigator Theodore Wells, Jr. Wells and Karp have continued Liman’s role as marquee litigators for the firm. Under Youngwood, the firm also created more structure for its departments: Each practice group elected its own chairman, drafted business plans, and focused more on client development.
Youngwood spent his entire legal career at the firm, starting as an associate in 1964 and becoming a partner in 1970. He joined Paul, Weiss’s top management committee in 1981, and devoted nearly two decades to helping guide the firm before he was elected chairman. Even while leading the firm, Youngwood didn’t give up his tax practice, and spent about half his time on billable work. He helped structure the merger of client Warner Communications Inc. and Time Inc. in 1990, and the spin-off that separated client Viacom Inc. from CBS Corporation in 2005. “As long as he was a practicing lawyer, I would not go anywhere else [for tax advice],” says Robert Marcus, senior executive vice president and chief financial officer for Time Warner Cable Inc.
Notwithstanding his affection for the firm and its partners, Youngwood has a reputation as a daunting presence. “He’s serious, very serious. Part of it is being old-fashioned,” says Karp. Youngwood’s friend, Kenneth Heitner of Weil, Gotshal & Manges, notes: “He has an intimidating style at times, but he’s a teddy bear at heart.”
Peter Rubinstein, the senior rabbi at Central Synagogue, praises Youngwood as “one of the finest men I know,” and notes that Youngwood and his family are funding a project to Webcast services: “As much as what he’s done financially, it’s the esteem and respect he earned that really marked his tenure, and his ability to create consensus.” Heitner, who is now the synagogue’s president, adds, “He did a very, very good job of getting the synagogue’s house in order. He was a stickler about the budget . . . but [he] never lost sight of the fact that it’s a synagogue. He always knew where business stopped and religion began.”
When Youngwood turned 70 in 2008, Paul, Weiss’s mandatory retirement policy required that he leave the partnership. He says he doesn’t miss the managing role, in part because he’s enjoying his work for the Department of Education, helping to formulate new policies to educate special needs students. Youngwood, who calls this experience “very rewarding and exciting,” notes that he urges new associates to keep balance in their own lives: “You should do pro bono, and community activities, and pay attention to your family. You’ll have a more fruitful life and will be a better lawyer.”
WEB ONLY EXTRA
Audio Interview: Youngwood, in conversation with American Lawyer executive editor Robin Sparkman, addresses his firm’s selective lateral growth, the benefits of a lockstep compensation structure, and why, in his view, a firm leader must also be an active practitioner.