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February 23, 2011 5:41 PM

Joseph Flom, 1923-2011: He Built the Preeminent Law Firm in America

Posted by Ed Shanahan

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Skadden, Arps, Slate, Meagher & Flom partner and M&A pioneer Joseph H. Flom died early Wednesday, the firm announced. He was 87 years old. During a legal career that spanned six decades, Flom helped transform Skadden from a four-attorney shop to one of the world's largest law firms. A corporate lawyer by trade, he did pioneering work in the burgeoning M&A field, helping to establish Skadden as a top transactional firm in the process. (Click here to continue reading Flom's obituary). What follows is a profile of Flom written by American Lawyer founder Steven Brill for a 10th anniversary issue of the magazine that examined the biggest changes in the legal business to occur over the previous decade.

 

From the March 1989 Issue of The American Lawyer

 One can admire the superlatives that attach to Joseph Flom, or be jealous of them. But there is no denying them and no denying that Flom personifies the best aspects of the new age of lawyering.

Joe Flom, 65, is among the best lawyers in the profession, an Old World generalist with encyclopedic recall of case law and deal and litigation strategies, a whirlwind of creativity, a near-caricature of perseverance. He defines the concept of client service.

He is also the consummate lawyer-businessman, a visionary entrepreneur who took Skadden, Arps, Slate, Meagher & Flom from a 160-lawyer, $30 million-revenue, mostly one-practice shop ten years ago to a 1,000-lawyer, multifaceted, multioffice institution that will gross $400 million in the 12 months ending this March, but will still (not-withstanding whispers from competitors to the contrary) be true to its heritage as a humane, collegial place obsessed with providing the best in client service.

And Flom is just as clearly the embodiment of the lawyer as public-spirited citizen, a man whose firm has not only been a trailblazer in pro bono commitments but who has quietly made enormous personal charitable contributions that include "adopting" an elementary school class of 80 Harlem youngsters who are now the beneficiaries not only of Flom's wealth but also of large, though unsung, portions of his time.

Other firms have succeeded impressively in the last decade, and in that sense singling one out as a paradigm presents a distorted view. But what Flom has built in the last ten years (and it was, indeed, ten years ago that Skadden's ascension truly began) is breathtaking in its scope, in its retrospective simplicity as an entrepreneurial idea, and in its instructive value as a model, or metaphor, for what it will take to succeed in the big-business, megafirm world of lawyering in the nineties and beyond.

Flom is the outsider who has worked his way in. When he gave a talk three years ago to the class of Harlem youngsters whom he had just "adopted," he told them about a company that would not hire him as a messenger as a young boy because he was Jewish. That company "is now one of our firm's smaller clients," he reported.

An unassuming, stoop-shouldered, small man, Flom is not a gloater; he told his class the story, he explains, "to show them what hard work and determination can do for you."

He recalls that he was determined from the time he was 7 years old to become a lawyer. His parents had told him that education was his way out of Bensonhurst in Brooklyn and that being a lawyer could get him involved in public affairs and government, which was, he says, "considered by my mother and father to be the best thing imaginable."

While his mother took in piecework and his father worked in a sewing shop, Flom commuted to a special public high school in Manhattan for gifted students--"there was a competitive exam," he explains--that was a prep school for City College.

After just three years at City College, Flom served in the Army, then used a G.I. Bill scholarship to go to Harvard Law School, where he was an editor of the law review. He was not interviewed or was turned down for jobs at many Wall Street firms because of his religion, he recalls. And he didn't pursue feelers at the others that, as he puts it, "were beginning to open up" because he “just wasn't comfortable at a big firm.” His discomfort is easily imaginable; the shy, still-awkward Flom must have realized that he wasn't the type to become a trailblazer partner at these long-closed firms.

Instead, Flom signed on in the fall of 1948 as the first associate in the then-three-lawyer firm of Skadden, Arps & Slate, which had been founded just three months before.

Skadden, Arps wasn't just any three-lawyer shop. Its three partners had been associates at the Wall Street firm that is now Dewey, Ballantine, Bushby, Palmer & Wood; and they were determined to build another prestige, full-service firm. Only this one, they swore, was going to be based not on old school ties but solely on their ability to do the best quality work.

Today Skadden, Arps's clients include 175 of the Fortune 500, 18 of the world's 25 largest banks, seven of the ten largest Japanese banks doing business in the United States, and 23 of the 25 largest U.S. investment banks.

Name a big-time case or legal issue in the headlines in the last year or two, and you're probably naming a matter in which Skadden has been involved. The insurance rebellion in California? Skadden represents the insurance companies in their effort to nullify Proposition 103. The new structured finance market? Skadden worked on deals involving 25 percent of the new securitizations in 1988. The savings and loan crisis? Skadden represented longtime client Ronald Perelman in his year-end buyout of five Texas savings and loans. New-fangled securitizations of old-style debt? Skadden represented department store conglomerate Carter Hawley Hale Stores, Inc., in its recent $700 million financing of credit card receivables. Disaster litigation? Skadden represents the owners of the Dupont Plaza Hotel-San Juan and the Six Flags Great Adventure amusement park. Unbundled stock units? Skadden advised two of the three corporations (American Express Company and Sara Lee Corporation) that launched the idea late in 1988. Japanese investment in American real estate? Real estate partner Benjamin Needell represents, among other leading players, Meiji Realty of America Incorporated and Fuji Bank Limited. Mega-bankruptcies? Skadden represents A.H. Robins Company Incorporated and has been involved for clients in Manville Corporation, Allegheny International Incorporated, and a host of other bankruptcies. Wedtech? Skadden represented one of the defendants.

All of which is above and beyond the firm's involvement in just about every takeover fight, leveraged buyout, and other M&A deals of the last decade, from Conoco to TWA to RJR Nabisco.

Perhaps more impressive than the scope of the cases and matters listed above is the fact that Joe Flom had no personal role in any of them. All of that work was done by other Skadden lawyers, typically for clients who have never met Joe Flom and don't care all that much if they do.

It's not that Flom is retired, far from it; he pulled an all-nighter in January working for Texaco Inc. in its recent skirmish with Carl Icahn, and he was pivotal in the Macy's--Federated Stores battle. Rather, it's that Flom and his partners have built the most impressive institutional law firm in America. That they have done so mostly in the last ten years in an industry that's been around for more than 100 years makes Skadden's success almost unparalleled in the history of American enterprise. For this is not the story of some leader rising overnight in an industry that arose overnight, but rather of one entrepreneur and his partners turning the tables on some of the most established, powerful businesses in this country.

CLICK HERE to read the full profile.


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