Fried, Frank, Harris, Shriver & Jacobson’s Valerie Ford Jacob said Wednesday she is stepping down from her position as cochair on the heels of a year that saw the firm rebound from a shaky 2012 by recording increased revenue and its highest-ever profits per equity partner, according to The American Lawyer’s reporting.
The firm’s revenue rose 3 percent for the fiscal year ending Feb. 28, to $458.5 million, while its profits per partner soared 24 percent, to $1.635 million. Revenue per lawyer rose 9 percent, to $1.02 million—the first time Fried Frank’s RPL has crossed the $1 million mark.
“We had a very strong year,” Jacob says. “A number of practices were very busy—real estate, corporate, asset management and private equity. We’re going into this year with a lot of momentum.”
By contrast, Fried Frank’s gross revenue in 2012 slid 6 percent, while profits per partner plunged 17 percent—the steepest dive of any Am Law 100 firm that year.
Jacob says she told the firm’s partnership Monday that she would step down as cochair immediately, a year earlier than originally planned. Her fellow cochair, David Greenwald, who joined Fried Frank from Goldman Sachs & Co. in October, will take over as sole chairman. The firm said last year when Greenwald came aboard that he would assume that role in February 2015.
A former Fried Frank partner, the 55-year-old Greenwald spent 19 years at Goldman, where he was deputy general counsel and international general counsel. The 61-year-old Jacob, who will now take the title of senior partner and focus on client relationships, tells The Am Law Daily she is “very excited” about making the change after leading the firm for 11 years.
In moving into Fried Frank’s top leadership post, Greenwald takes the reins of a firm whose ranks have been thinning: Overall lawyer head count dropped by 5 percent during the most recent fiscal year, to 450, and the equity partnership ranks shrank 10 percent, from 134 to 120. And while Fried Frank doesn’t have a big nonequity partner class, that group more than doubled, from seven to 15.
Jacob says the changing composition in the partnership ranks did not reflect a push to de-equitize underperformers. “That’s the way it turned out last year,” Jacob says, noting that some partners came from the government, and were automatically made income partners when they started. Counting all partners, the firm’s compensation per partner still rose 18 percent, to $1.5 million.
Despite the improved financial results, Fried Frank continues to see a stream of significant partners depart. Douglas Flaum, the former head of the firn’s securities and shareholder litigation practice, jumped to Paul Hastings last summer, as did securities and commercial litigator Shahzeb Lari. Ropes & Gray, meanwhile, poached two overseas partners: finance lawyer Mark Wesseldine in London and capital markets and M&A lawyer Victoria Lloyd in Hong Kong. London antitrust partner Alasdair Balfour also left last year, to join Allen & Overy.
The firm has also continued to endure high-profile losses in the first part of 2014. So far this year, white-collar specialists Dixie Johnson, William Johnson and Carmen Lawrence have headed to King & Spalding. Lawrence, who made the move last week, was cohead of Fried Frank’s securities enforcement and white-collar criminal defense practice. Tax partner Robert Guat left to lead Proskauer’s London tax practice this year; and real estate partner Brian Lichter joined Davis Polk & Wardwell.
“We don’t comment and wish them all well,” Jacob says about the departures. “In today’s world, the lateral recruitment market is more aggressive.”
Greenwald’s ascension to sole chair will likely strengthen the firm’s relationship with Goldman Sachs, which has long been Fried Frank’s largest client. The firm represents Goldman in its role as financial adviser to Cole Real Estate Investments in its $11.2 billion sale to American Realty. It is also advising Goldman in its role as financial adviser to Bristol-Myers Squibb in the drugmaker’s $4.1 billion sale of a diabetes drug alliance to AstraZeneca. In yet another major drug sector deal, the firm is representing Goldman in its role as financial adviser to drugmaker ViroPharma Inc. in its $4.2 billion purchase by Irish biopharmaceutical company Shire.
Other transaction highlights for the firm last year included its representation of Virgin Media Inc. in its acquisition by cable company Liberty Global Inc. for $23 billion. Fried Frank is also advising Time Warner Inc. on the sale of its headquarters for $1.3 billion and its planned move to Manhattan’s Hudson Yards. On the litigation front, the firm represents the independent directors of JPMorgan Chase in shareholder derivative litigation stemming from the LIBOR investigations.
This report is part of The Am Law Daily’s early coverage of 2013 financial results of The Am Law 100/200. Final rankings and full results for The Am Law 100 will be published in The American Lawyer’s May 2014 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue