Fried, Frank, Harris, Shriver & Jacobson
Fried, Frank, Harris, Shriver & Jacobson
Founded: 1890s as Riegelman and Bach
Gross Revenues: $225 million (1999)
NAIC: 54111 Offices of Lawyers
Fried, Frank, Harris, Shriver & Jacobson is a major international law firm that operates offices in New York City, London, Los Angeles, and Washington, D.C. In 2000 it ranked among the top firms offering legal services to corporate clients, as well as government agencies and associations. Fried Frank serves clients involved in mergers, acquisitions, taxation issues, antitrust, litigation, and most other areas of corporate law. Unlike some firms, Fried Frank has no single historic client that accounts for most of its revenues; its heritage as a law firm of mostly German Jewish attorneys in the early 20th century is also unique. Sometimes described as a liberal law firm, Fried Frank supports minority organizations such as the Mexican American Legal Defense and Educational Fund and the NAACP Legal Defense and Educational Fund.
Origins and Early Practice
Although the names of Fried and Frank would not be reflected in the company’s name until the 1950s, the history of Fried Frank may be traced to the 1890s, when a group of German Jewish lawyers began practicing in New York City at a time when few New York-based firms employed attorneys of Jewish or other ethnic heritage. The lead partner was Charles A. Riegelman in the firm of Riegelman and Bach. Later Riegelman joined other attorneys, and by 1929 he was part of a partnership known as Limburg, Riegelman, Hirsch & Hess.
Riegelman’s practice in the early 20th century focused on representing Maurice Wertheim and the investment bank he founded called Wertheim Schroder & Company Incorporated. When Wertheim died, Riegelman also served as his executor, a typical practice in the days before specialization.
In 1932 Walter J. Fried joined the firm as an associate. On January 1, 1934 the firm was renamed again, this time to Riegelman, Hirsch & Hess, after name partner Limburg died. In 1938 the firm recruited partner Arthur L. Strasser and thus became Riegelman, Hess, Strasser & Hirsch. By the end of 1939 Hirsch had died, so the firm of eight partners and seven associates became just Riegelman, Hess & Strasser.
With about 15 lawyers in the late 1940s, the firm’s name partners were Riegelman, Strasser, Schwarz, and Spiegelberg. The firm practiced general corporate law and litigation for both American and foreign clients, such as retailer Bergdorf Goodman; importer-exporter Stein Hall; Ecusta Paper, a cigarette paper manufacturer; and some Indonesian firms. Spiegelberg, in particular, had risen to prominence as a litigator for both American and British clients, and he was also well known for helping Congress pass “reverse lend-lease” legislation.
A few years before Riegelman died in 1950, the partnership recruited a new generation of young lawyers, including Hans J. Frank who joined in 1943. Frank had left Germany when Hitler’s laws forbidding Jews to practice law had been enacted; in the United States his practice emphasized international taxation. Meanwhile, Walter Fried’s specialty in real estate law significantly increased the firm’s billings. One of Fried’s contributions was in helping found New York City’s co-oping residential buildings. In 1955 the law firm became Strasser, Spiegelberg, Fried & Frank.
In 1949 the partnership opened its first branch office in Washington, D.C. Felix S. Cohen, former solicitor for the U.S. Bureau of Indian Affairs (BIA), was instrumental in founding the D.C. office, which worked mainly on representing Native Americans who used the new Indian Claims Commission Act in filing claims against the federal government. By the mid-1950s the Washington, D.C., office had developed more of a general law practice, under the leadership of Max M. Kampelman, one of the firm’s better known attorneys who in 1989 would receive the Presidential Citizens Medal from President Ronald Reagan and in 1991 would publish his memoirs.
According to journalist John Taylor, in the early postwar era “far and away the most dynamic of the younger attorneys at the firm was Sam Harris.” Harris had worked for the Securities and Exchange Commission, started during the New Deal era of the 1930s, and had helped the United States prosecute war criminals in the Nuremberg trials before joining Fried Frank in the late 1940s. Moreover, Harris represented uranium magnate Joseph Hirshhom of Canada and later joined the board of directors of Rio Tinto-Zinc Corporation after Hirshhom sold his business to RTZ. Harris was also important in recruiting other young lawyers for Fried Frank, especially several who, like Harris, had graduated from Yale Law School. In those early postwar years in particular, Harris helped recruit other Jewish lawyers who had been excluded from most of the nation’s largest law firms. He was made a partner in the firm two years after he arrived, in 1949.
Much of Fried Frank’s expansion in the postwar era was influenced by Arthur Fleischer, Jr., who joined the firm as an associate after graduating from Yale Law School in 1958. From 1961 to 1964 Fleischer served as the assistant to the chairman of the Securities and Exchange Commission, then returned to Fried Frank. Under his mentor Sam Harris, Fleischer became a major securities lawyer by the late 1960s. In 1969 he helped organize the Practicing Law Institute’s first Annual Institute on Securities Regulation to help lawyers stay informed in that specialty. In 1971 the law firm changed its name to Fried, Frank, Harris, Shriver & Jacobson after Sargent Shriver joined the firm. Shriver was well known for directing the Peace Corps when it was started in the early 1960s during President John F. Kennedy’s administration.
In the 1970s and 1980s Fleischer led a team of Fried Frank attorneys engaged in building a strong merger/acquisition practice. In 1975 the firm worked on five such projects; that number increased to 87 in 1985, including one in which Fleischer represented General Electric in its $6.28 billion merger with RCA Corporation. In 1984 Fried Frank represented the Getty Oil Company when it was purchased by Texaco for $10 billion, and for the year 1986 the law firm participated in 11 of the 33 transactions valued at $1 billion or more.
Thus Fried Frank gained a reputation as having a “transactional” practice, based on case-by-case counsel, instead of having one or a few major long-term clients like some other leading law firms. New York’s Milbank, Tweed, Hadley & McCloy, for example, had for decades represented the Rockefeller family and Chase Manhattan Bank, while New York’s Shearman & Sterling’s major client since 1891 was Citigroup and its predecessors.
In 1980 Fried Frank attorneys and many others in the profession were saddened by Harris’ tragic suicide. “After his death there was a void,” said Harris’s colleague and friend, Leon Silverman, in the March 1987 Manhattan, inc., adding “He was the most important force in the firm. But it was the character he gave to the firm that permitted it to withstand his death and go on.”
Between 1981 and 1987 Fried Frank grew from 204 lawyers and 67 partners to 325 lawyers and 93 partners. The firm’s Washington, D.C., office went from 56 lawyers in 1982 to 93 lawyers just five years later. Harvey Pitt, the SEC general counsel who joined Fried Frank in 1978, was responsible for much of the Washington office’s growth.
Much of Fried Frank’s rapid expansion came from hiring experienced attorneys from competing law firms. Such lateral hiring or raiding began increasing in the late 1970s, after the U.S. Supreme Court ruled that professional advertising was a First Amendment free-speech right and after The National Law Journal and The American Lawyer began publishing articles about law firm finances and management. This was part of a major transformation of large law firms from a institutions characterized by long-term loyalty to one’s firm, relatively slow growth, and a great deal of collegiality, to more of a business culture emphasizing competition for top attorneys with rapidly increasing salaries, openly advertising for clients, specialization, less collegiality, and new offices both in the United States and abroad.
Although Fried Frank represented noted clients such as Goldman, Sachs & Company, Morgan Stanley, and Lazard Freres in the 1980s, its representation of Ivan F. Boesky probably garnered the most media attention. Fried Frank attorneys had in the 1970s begun representing financier Boesky as he established and operated his various businesses. When Boesky was investigated by the Securities and Exchange Commission, Fried Frank partner Harvey Pitt represented him. Finally, Pitt was Boesky’s counselor in 1986, when he was charged with securities fraud, advising Boesky to plead guilty to insider trading. Boesky was allowed to act as a government informant in exchange for shorter prison time (three years), paid $100 million in fines, and was barred for life from the securities business. Journalist John Taylor called this “a superb deal” for Boesky. Boesky also used Fried Frank attorneys to help him liquidate his partnerships; thus, “Fried Frank will have worked him on the way up and then worked him on the way down,” wrote Taylor.
The core values of Fried, Frank, Harris, Shriver & Jacobson include outstanding and creative solutions for a broad base of important clients, integrity, collegiality and community, individual autonomy and institutional focus, and recognition and rewards.
This was just one side to what the Wall Street Journal on December 21, 1987 called “the largest scandal in Wall Street’s history.” In 1989 a group of investors represented by the Cadwalader, Wickersham & Taft law firm sued Fried Frank for deceptive statements regarding Boesky’s finances. Moreover, in 1991, Fried Frank and the auditing firm Oppenheim, Appel, Dixon & Company agreed to settle a lawsuit out of court by paying $11.2 million to some 42 individual and institutional investors in Ivan F. Boesky & Company. Those investors alleged that the law firm had deceived them in documents prepared for the Boesky firm’s initial offering in 1986. At least two books, in addition to many media accounts, covered these and many other aspects of the Boesky scandal.
Another financial scandal occurred in the late 1980s when savings and loans firms began to collapse, leading to a massive government bailout of billions of dollars. In 1983 Fried Frank attorney Thomas Vartanian, as general counsel for the Federal Home Loan Bank Board, had helped develop new rules that deregulated the savings and loans; unfortunately, many took on irresponsible loans and thus soon failed. By the late 1980s Vartanian returned to Fried Frank, where he helped negotiate 55 thrift mergers and acquisitions of the many failed savings and loans, significantly increasing the firm’s billings.
Practice in the 1990s
In July 1992 the law firm announced it had formed a representative office in Budapest, Hungary, in cooperation with the locally prominent law firm of Burai-Kovacs, Buki & Partner. With the collapse of communism in Eastern Europe, many American law firms established offices to help foreign firms invest in Hungary, Russia, and other former Eastern Bloc nations. However, this Fried Frank office was shuttered after a few years.
In the late 1990s Fried Frank literature proclaimed, “Over the past several decades, we have represented every one of the major investment banking firms and broker-dealers, each of the Big Six accounting firms and the major insurance companies of the world in securities regulation, compliance and corporate governance matters. And during the same period, we have been involved in nearly every high-profile securities enforcement matter.”
Fried Frank’s merger/acquisition (M/A) practice in 1998 included representing Kirk Kerkorian, a top Chrysler shareholder, when Chrysler merged with Germany’s Daimler-Benz, a $39 billion deal. Other clients included Dow Jones, Loews, GTE, Northrup Grumman. From 1985 to the late 1990s Fried Frank represented Proctor & Gamble during its acquisition of public companies.
Fried Frank’s practice in the late 1990s included most other aspects of corporate law. It was involved in major initial public offerings (IPOs), including its 1998 representation of the under-writers in Republic Services’s $1.5 billion IPO. One of the firm’s major Latin American clients was Mexico’s Grupo Televisa. In 1997 Fried Frank, in a joint venture with the London law firm Simmons & Simmons that later was discontinued, worked on the $8 billion privatization of Endesa, the largest electric company in Spain. Litigation also played a big part in the firm’s practice; the firm successfully represented Lloyd’s of London, for example, when it was accused of breaking U.S. securities laws. Numerous specific discussions of the firm’s clients and their roles in antitrust, intellectual property, and other areas were detailed in Fried Frank literature, a candor not usually seen in the brochures and Web sites of major law firms.
Based on its 1997 gross revenues of $200 million, Fried Frank ranked as the 39th largest law firm in the United States, according to The American Lawyer of July/August 1998. The same magazine in November 1998 ranked Fried Frank as the world’s 47th largest law firm. The July 1999 American Lawyer rankings featured Fried Frank as number 42 among the country’s largest law firms, based on its 1998 revenues of $225 million, and 19th in terms of its average partner compensation of $760,000.
At the end of the century law firms continued to expand globally, perhaps the best example being London’s Clifford Chance, which had about 3,000 lawyers after mergers with one American and one German law firm. Fried Frank faced plenty of competition from other major law firms operating in the globalized economy. Moreover, employing their own work-force of attorneys, mostly specializing in tax law, large accounting firms also competed with law firms. Finally, with the growth of the so-called “new economy” or Information Age, in which electronic commerce boomed, the entire legal profession, Fried Frank included, faced new and unforeseen opportunities to help corporate clients.
Cleary, Gottlieb, Steen & Hamilton; Davis Polk & Wardwell; Simpson Thacher & Bartlett
- Charles Riegelman begins a New York City law practice.
- Walter J. Fried joins the firm.
- Hans J. Frank joins the firm.
- Firm opens its Washington, D.C., office.
- The London office is established.
- The current firm name is adopted after Sargent Shriver joins the firm.
- Los Angeles office is opened.
- The Paris office is started.
Cohen, Laurie P., “Boesky Lawyers Call ‘Outrageous’ Net Worth Claims,” Wall Street Journal, March 22, 1989, p. 1.
Fleischer, Arthur, Jr., Geoffrey C. Hazard, Jr., and Miriam Z. Klipper, Board Games: The Changing Shape of Corporate Power, New York: Little, Brown, 1988.
“Fraud Case Is Dismissed,” Wall Street Journal, January 3, 1996, p. B2.
“Fried, Frank, Harris, Shriver & Jacobson,” in The Insider’s Guide to Law Firms, special edition, Mobius Press, 1999.
“Fried, Frank, Harris, Shriver & Jacobson,” in Inside Track, 1984, pp. 336–44.
“Fried, Frank, Harris, Shriver & Jacobson,” in Law Firm Highlights from Vault.com, New York, 1999.
“Fried, Frank, Harris, Shriver & Jacobson Forms Cooperative Relationship with Hungarian Law Firm,” PR Newswire, July 20, 1992.
Hagedorn, Ann, “Boesky Lawyers Agree to Settle,” Asian Wall Street Journal, July 10, 1991, p. 19.
Hertzberg, Daniel, “Milken and 26 Other Drexel Employees Owned Stake in Boesky Arbitrage Firm,” Wall Street Journal, August 15, 1988, p. 1.
Kampelman, Max M., Entering New Worlds: The Memoirs of a Private Man in Public Life, New York: HarperCollins, 1991.
Kang, Grace M., “Suit Tests Continuing Obligation of Law Firms on Advising Clients,” Wall Street Journal, July 20, 1992, p. B6.
“The Legal Masterminds Behind Merger Mania,” Business Week, August 13, 1984, p. 122.
Pollock, Ellen J., “Legal Beat: Slump Hits Elite Firms, Survey Shows,” Wall Street Journal, June 29, 1993, p. B1.
Radigan, Joseph, “Getting Sued on the Internet,” US Banker, June 1997, p. 19.
Rice, Robert, “Leading Law Firms in Joint Venture,” Financial Times (London), August 1, 1997, p. 11.
Slater, Robert, and Jeffrey A. Krames, The Titans of Takeover, Beard Group, 1999.
Stewart, James B., and Daniel Hertzberg, “Boesky Sentence Ends Chapter in Scandal—But Many More Are Thought to Be Implicated,” Wall Street Journal, December 21, 1987, p. 1.
Taylor, John, “Brief Encounters,” Manhattan, Inc., March 1987.
—David M. Walden