Fried, Frank, Harris, Shriver & Jacobson has hired David Greenwald, a deputy general counsel from Goldman Sachs Group, to take a leadership role in the firm.

Current chair Valerie Ford Jacob will serve as cochair with Greenwald through February 2015. In March 2015, Greenwald will take over as chairman while Jacob will become senior partner.

"His 19 years of experience as general counsel of the merchant banking division, as international general counsel and in other significant roles for our client Goldman Sachs, one of the world's preeminent financial institutions, will be a tremendous benefit to our clients and to our firm," Jacob said in a statement.

Greenwald worked at Fried Frank on mergers and acquisitions and private equity deals before joining Goldman's legal department in 1994, where he became deputy general counsel and international general counsel.

"Valerie has been the longest serving chair of the firm and under her leadership the firm has grown and is well positioned for strong performance going forward. It is an exciting time to come home and I look forward to contributing to the firm's continued success," Greenwald said in a statement.

Greenwald and Jacob did not return messages seeking comment and a firm spokesperson declined further comment.

At Fried Frank, Greenwald will face the challenges of falling profits and some partner departures.

Fried Frank's gross revenue slid 6.3 percent in 2012, to $444 million, while revenue per lawyer dipped 2.6 percent, to $935,000, according to the American Lawyer.

Profits per partner plunged 16.8 percent, to $1.315 million, which was the steepest dive in that measure of any Am Law 100 firm, The American Lawyer reported earlier this year.

The firm's profit margin fell to 40 percent from 45 percent and its headcount dropped 3.8 percent, to 476 lawyers last year.

In an interview with The American Lawyer in April, Jacob said the firm "had great momentum in the second half of the year, but a slower period in the first half, so we ended up essentially flat on time value and billings year-over-year."

The firm's summer associate class this year is 29, compared with 41 last summer, and its first-year associate class is 33 this year, six fewer than last year, according to data from The American Lawyer, a Law Journal affiliate.

As with most major firms, Fried Frank's attorney ranks are in flux. Three former Fried Frank lawyers said the firm cut several litigation associates in New York earlier this year.

On the partner front, the firm lost Douglas Flaum, the head of the securities and shareholder litigation practice, to Paul Hastings in June. In the past week, securities and commercial litigator Shahzeb Lari also left to join Paul Hastings as a partner.

Ropes & Gray snagged two Fried Frank overseas partners in the spring: finance lawyer Mark Wesseldine in London and capital markets and M&A lawyer Victoria Lloyd in Hong Kong. Another London partner, Alasdair Balfour, who focuses on antitrust matters, also left this year for Allen & Overy.

However, the firm in May added Daniel Mullen as a partner in its litigation department and energy group in Washington, D.C. Mullen was a branch chief in the enforcement division in the Federal Energy Regulatory Commission. In March, it added partner Jerry Howe in the government contracts and aerospace and defense practices in Washington. The firm also has hired some corporate and real estate associates this year.

According to a recent profile of Greenwald in Columbia Law School Magazine, he grew up in Newark and Glen Rock, N.J. After Columbia Law, he joined Fried Frank, advising large clients, including Goldman Sachs and private equity firm Forstmann Little.

Greenwald became a partner at Goldman in 2000 and moved with his family to London in 2006 to take over as international general counsel.

Greenwald told Columbia magazine that he benefited from mentors such as Arthur Fleischer Jr., senior counsel at Fried Frank, and Rich Friedman, Goldman's merchant banking chief.

"I tell people all the time that they should have mentors, plural," he told the magazine.

The Goldman position gave him a front-row seat to the financial crisis.

"It was really scary at that time, because it looked like the world was going to come to an end," Greenwald recalls. "But it was fascinating. Sometimes I step back and say, 'This is one of the most fascinating periods of time to practice law.' But at the same time, it's exhausting."

Greenwald's move to the firm would likely strengthen ties between Fried Frank and one of its longtime clients.

Gregory Palm, executive vice president and general counsel of Goldman, said in a statement: "We have benefited enormously from David's good judgment and wise counsel, and I am very pleased that we will still be able to call on his advice in his new role at Fried Frank, a firm which has ably represented us for many years."

Fried Frank is the latest law firm to hire its leadership from a client. In February, Cadwalader, Wickersham & Taft hired as its first deputy chairman James Woolery from JPMorgan Chase, where he served as co-head of North American mergers and acquisitions.

In 2010, DLA Piper hired Anastasia Kelly in the firm's Washington office after Kelly had served as a vice chairman at AIG. She is now co-managing partner at DLA in the United States and is a member of the firm's executive committee

"Bringing people who have been on the client side in some of these major financial institutions into leadership positions gives the firm a tremendous perspective," said law firm consultant Peter Zeughauser of the Zeughauser Group. "Understanding the mind set of a client is incredibly important today" as client relationships are no longer guaranteed.

Zeughauser and others noted the move is smart succession planning, as Fried Frank's mandatory retirement age is 65. Jacob, who joined the firm in 1978 right after graduating from Cornell Law School, can work with Greenwald for a time.

"It sounds well thought through, that they have 18 months of transition period," Zeughauser said. "He probably has a good sense of the firm but a lot of partners have moved on, so it's a good chance to get his feet on the ground."

Harvey Pitt, a longtime Fried Frank partner who chaired the U.S. Securities and Exchange Commission from 2001 to 2003, also praised Greenwald's hire.

"He's brilliant and very capable and effective, both as a lawyer and business counsel," said Pitt, adding that Greenwald will be "a significant factor in the future direction of Fried Frank."

Pitt, who founded a business consulting firm, Kalorama Partners, said that during his tenure at Fried Frank, the leadership worked to promote values and initiatives that "law firms tend to forget," such as associate morale and training.