Top Goldman Lawyer Helped Turn Around a Struggling Law Firm

Photo by Herval (Flickr/Creative Commons)

David Greenwald has been known to lace up his sneakers and run the eight miles from his Upper West Side apartment to Fried Frank’s office in lower Manhattan.

Since joining the firm in a leadership role in 2013, Greenwald has breathed new energy into the 450-lawyer firm, helping bring in record profits per partner, revenue per lawyer and gross revenue even as competitors struggle.

Greenwald’s success hasn’t hinged on any groundbreaking idea. Rather, his playbook draws on tried strategies: He retreated in Hong Kong where the firm closed its office. At a management level, Greenwald prioritized punctual time-keeping — fining partners $100 if they are late to submit their hours. It’s not Fried Frank 3.0, but it’s seemed to work nonetheless.

He said his most important decision was to focus on building Fried Frank’s core practice groups — a line that nearly every firm leader repeats. Greenwald cites real estate, asset management, private equity, M&A, capital markets and litigation.

It is a “very competitive market. Lots of firms that do the things we do,” he said in his usual  understated manner.

The question is why he wanted to enter law firm management in the first place?

Greenwald didn’t so much return to Fried Frank as emerge out of left field. Nineteen years earlier, he had departed as an M&A partner at Fried Frank to join his client, Goldman Sachs. Based primarily in London, he had risen to deputy general counsel and international general counsel, working in the merchant banking division and serving on a number of committees.

In 2012, when Goldman was posting profits that beat analysts’ expectations, Fried Frank was still trying to regain its footing after the financial crisis. That year, the law firm posted a 6.1 percent decline in revenue, in addition to lower profits per partner and gross revenues, as it had for several years off and on, according to the American Lawyer.

Greenwald said the firm approached him about sharing the leadership role with Valerie Ford Jacob, a capital markets partner who had led Fried Frank since 2003 while continuing to practice.

Originally, Jacob and Greenwald were meant to co-chair the firm for two years, until March 2015, but somewhere along the way that changed.

In 2013, Fried Frank posted its then-highest ever profits-per-partner, rebounding from several shaky years. Afterwards, Jacob handed the reigns to Greenwald one year earlier than planned.

“With the handover going very well, I decided there was no need for me to wait until next year,” she told The Wall Street Journal at the time.

Six months later, Jacob left the firm altogether, taking two partners with her to Freshfields Bruckhaus Deringer.

“I was disappointed to see her go,” Greenwald said. He did not comment on the reasons for her departure.

Jacob did not comment specifically on her departure but said, “Fried Frank is a great firm.”

Indeed, in 2015, the firm’s profits-per-equity partner soared over 20 percent to $2.2 million, and revenue per lawyer jumped 10 percent to over $1.2 million.

The Pre-Greenwald Period

The financial crisis took its toll at Fried Frank. At the end of 2008, revenues were down 10 percent to $488 million and its profits-per-partner had tumbled over 20 percent to $1.23 million — according to the American Lawyer and the following year it implemented layoffs. It has shrunk from more than 650 lawyers to 450.

Greenwald described a lack of focus when he came back to the firm: The London office had “terrific” lawyers, but none in practice areas that were strongest in the U.S. such as private equity, M&A and asset management. That meant they were missing opportunities to service clients.

In 2014, he helped lure asset management attorneys Mark Mifsud and Graham White from Kirkland & Ellis’ London outpost.

“Pre-Greenwald, it was sleepy in London,” says Mifsud.

Lateral recruiting has been a key part of Greenwald’s strategy. His strategy has been to avoid hiring anyone who seems likely to hop from firm to firm, a hazard in an active lateral market, he said.

“The market for lateral partners is incredibly robust … but we’ve lost partners because of that market,” says Greenwald. “And I’d be a fool to think that would stop any time soon.”

A Disciplined Approach

Inside Fried Frank, the firm adopted a partner evaluation system inspired by the Goldman Sachs Managing Director review process.

Associates are now allowed more participation in committees that were once reserved solely for partners, including the diversity committee and the pro bono committee.

“Since David came, it’s become more of a priority at the firm,” said associate Stacey Song, of the diversity committee and women’s initiatives.

Greenwald said he recently read Daniel James Brown’s The Boys in the Boat, the story of the American rowing team at the 1936 Olympics. Reflecting on the book, he said, “You realize that it’s about teamwork. Those boats go only when everyone is working together.”

CORRECTED: This story has been amended. Downsizing the firm has not been a pillar of Greenwald’s strategy and predates his leadership. 

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