How Greg Jordan, ’84, opened global doors for Reed Smith
WHEN ASKED TO DEFINE REED SMITH, the billion-dollar law firm whose growth he has galvanized over the past decade, global managing partner Greg Jordan begins simply.
“In a lot of ways, it probably looks like and feels like we’re a big corporation, but we’re owned by the partners. Technical and spiritual things come with that.” It’s characteristic of Jordan, Pitt Law 1984, to give equal weight to both the prosaic and the ethical responsibilities of the job he’s held through four partner elections, the first in 2000.
Gilt-framed oil portraits of its nineteenth century founders still hang in the firm’s hallways. But Reed Smith’s sleek headquarters, in Pittsburgh’s newest skyscraper, befits its twenty-first century incarnation as a global powerhouse. Jordan, age 50, is widely credited with engineering its rapid transformation.
When Jordan succeeded Dan Booker (Pitt undergrad ’68) as managing partner in 2001, Reed Smith was already a big firm, with 570 lawyers in 11 offices across the country. Today, the firm has more than 1,600 attorneys worldwide, in 22 offices from London to Beijing to Abu Dhabi. Jordan’s strategic mergers and acquisitions have created revenues of $942 million in 2009. That’s nearly a 500 percent increase from 2000 levels, and resulted in per partner profits reaching $1 million last year. Along with the profits, Reed Smith has collected a pile of accolades: for its legal talent (it is routinely ranked among the industry’s best by observers like The Lawyer and American Lawyer), its rigorous continuing education programs (named best trainer by LawCareers.net) and its commitment to pro bono work (recognized by the American Civil Liberties Union in Pittsburgh, Britain’s Legal Business Magazine, and numerous awards to individual Reed Smith attorneys).
Pete Kalis knows Jordan as both a friend and rival. The chairman and global managing partner of K&L Gates, also based in Pittsburgh, has known his Reed Smith counterpart for 30 years; both are natives of Wheeling, West Virginia. Kalis calls Jordan “the principal ingredient” in its national and global growth.
“He has successfully elevated the Reed Smith brand on three continents among legal elites. He’s undertaken a number of internal initiatives that have been well received. Through his tenure, their financial performance has risen and grown positively. And he knows intuitively how to inspire confidence.”
Kalis recalls hiring Jordan well before his Reed Smith career. As a Pitt Law student, Jordan spent a summer vacation as a pet sitter for Kalis. “I thought he’d have a career doing that, cat-sitting,” jokes Kalis. “But herding cats is not entirely unlike managing lawyers. It was good training.”
Jordan’s strategic vision for Reed Smith is worldwide. The growth he has guided has strengthened the firm’s core practice areas in finance, trading and shipping, pharmaceuticals and advertising and added expertise in new fields, like energy. “These are parts of the further evolution of Reed Smith, to make sure we’re participants in the biggest parts of the world economy,” he explains.
“I’m a big believer that the trends that we’ve embraced are getting stronger, not weaker. Giant Chinese funds are investing in the Marcellus Shale. BNY Mellon is investing in Asia. The world is getting smaller. The smart big law firms will be in position to go with their clients and participate in globalization.”
As Jordan points out, Reed Smith has a history of fabled local clients. “You know, Mr. Reed represented Mellon, Carnegie, Frick, Heinz, and Westinghouse.” In recent decades, several of the firm’s stalwart clients became examples of strategic global growth. “In the nineties under [former CEO] Frank Cahouet, Mellon was diversifying away from being just a bank into a more service-based investment management business — they bought Dreyfus, bought The Boston Company. In the late 90s and early 2000s, they got into London and Europe in a big way. That reinforced for us that we needed to get with the program and become more of a national and international firm, and of course since then we’ve seen further evolution with the Bank of New York merger. I look at a company like that, very close to home, and see they’re anything but complacent. That’s probably a pretty good model. As [former General Electric CEO] Jack Welch says, stagnation is not a good option.”
From those regional roots, Reed Smith has grown a worldwide presence. The firm now counsels 28 of the top 30 U.S. banks and ten of the world’s 12 largest pharmaceuticalcompanies. Its shipping and advertising practices are also being integrated internationally, as is its expansion into energy.
“We’re now focused on how to become a bigger player in the energy sector. Some of that is adding talent right here in Pittsburgh, where we’ve added some experts in oil and gas. We’ve added probably the leading renewable energy wind power practice in the country, whose flagship client is the Danish company, Vestas, the world’s largest producer of big wind turbines. It’s a fantastic company. I’ve just returned from Denmark a few weeks ago, visiting them. That’s an investment for us. Through our trading business in London we’ve got a big position in energy, and we’re in the Middle East which ties in as well, and we’re interested in expanding into Texas, which is a hotbed for oil and gas. And of course, it’s interesting and fun that the energy sector is tying right back into Pittsburgh, with the Marcellus Shale.”
Jordan was determined to retain his firm’s corporate character despite its accelerated growth, beginning with acquisitions in London, New York, and California. A key acquisition was Richards Butler, with offices in London and Hong Kong, which merged with Reed Smith in 2007. He assigned key Reed Smith partners to relocate to personally guide the opening of new offices, and he insists that the firm pursue strong client relationships. Reed Smith’s decision to not raise its rates for key clients at the beginning of the recession in 2008 — Jordan says it was the first global firm to do so — is just one example of that commitment to long-term service, and it’s reaped major rewards.
“It’s kind of a long term bet that if you’re picking your client relationships right and you’re investing in those relationships, the rest of it is probably gong to work out,” he says. It has. In an online interview in April 2007, Jordan told Adam Smith Esq. that Reed Smith’s revenue from its top 250 clients had increased 400 percent in the past five years. In 2010 nearly $600 million, or more than 60 percent of total revenue, is expected to come from the top 250 clients. Integrating new associates and lateral hires required strong internal communications as well. “Lawyers like evidence. If you have a good idea, they want to know what the evidence is that supports it, they want to know that we can execute on it, and then they want to know if it’s working.” Jordan provides that evidence in face-to-face meetings around the globe. He travels almost 200 days a year, spending as much time with staff as with international clients. “I like tobe talking to people, listening, connecting to them. I do a lot of one-on-ones, but also town hall meetings and bigger Q&A sessions to hear what’s on people’s minds, get input and connect with them.”
Jordan pages through a color-coded monthly agenda and points to this week’s entries, outlined in blue. That means London, where he’ll head in a few hours. “I’ll spend chunks of time with key clients over the next four days, probably six to eight different companies, banks, manufacturers, trading companies. Second, I’ll spend one on one time with several really important partners. I want to make sure they know they have close access to me and I want to hear what they have to say. I’ll chair a firmwide meeting from the London office, speak to all our offices around the world tomorrow evening — hopefully I’ll still be awake. There will be a London partners reception and a Q&A with me after that, a more focused discussion.” Other meetings with young associates and new hires complete the jam-packed schedule.
Jordan’s travels have allowed him to observe the global economy firsthand. The harsh lesson of the recession, he says, is that a firm must diversify, both geographically and in practice.
“In good times law firms can do pretty well if they have the range of services that support the growth, and in bad times, law firms can do pretty well if they have the range of services to deal with the problems, and we’ve tried to manage Reed Smith to have both. So as I look at our practice mix, it’s almost like managing an investment portfolio,” he says. No one client comprises more than 4 percent of the firm’s total billings. “Asia, for example, has rebounded much more quickly and more strongly than other parts of the world. The U.S. is coming along next, Europe following that. The slowdown rippled around the world and the recovery is rippling back around, so geographic diversification and industry diversification really helped.”
While Reed Smith diversifies, it has also consolidated. Worldwide customer services have been centralized in a 24-hour center in downtown Pittsburgh, bringing cost efficiencies that Jordan says are essential for the legal industry to find. As law firms grow bigger, he predicts, “they’ll get a lot better at the variable cost model, at becoming more profitable without raising prices, which is how you have to do it in almost any other business.”
A worldwide presence has also colored Reed Smith’s pro bono work. For over two decades, the firm has contributed more than 3 percent of its billable time to such cases.
Jordan’s commitment to the effort dates from his earliest days at Reed Smith.“The first trial I ever had was a pro bono case — a paternity case, here in Allegheny County. I’ll never forget the feeling when it was over and I got a letter from the young lady, saying ‘Thanks … now my daughter will know who her father is.’ You feel the impact of helping people who really need it. So we do a lot. We’ll probably do $30 million worth of free legal work this year around the world.”
The firm’s example has led other firms to follow its lead. A week after January’s devastating earthquake in Haiti, Reed Smith volunteers from the Pittsburgh region arrived in Port au Prince to offer medical supplies and legal assistance. In March, the firm’s pro bono counsel, Jayne Fleming, led a team of medical and legal experts who are helping Haitians apply for humanitarian admission to the United States. Victims need assistance to prove that they are orphaned or have urgent medical needs. When Fleming reported her work at a meeting of the Pro Bono Institute, five other U.S. firms joined the effort, working on the ground with survivors.
“What’s so great about Greg and senior management is they’re willing to let people carve their own path, to find their own niche and talent,” says Fleming.
Jordan sees a bigger benefit. “As rewarding as it is for the individuals doing it, there’s really a positive burst that comes to the institution itself as we celebrate the great things that people do for others who are less fortunate. It makes people feel that they’re part of an organization that’s worth belonging to. It’s not just a big business trying to make a lot of money. In today’s world, that’s a little something extra to hang onto.”
The firm made headlines earlier this year when it made moves to standardize compensation policies. “The legal industry is a pretty merit-oriented place, but it hasn’t always approached compensation that way,” Jordan observes. “We’re moving rapidly toward more of a variable compensation model rather than fixed compensation, so the [compensation] levels will be heavily impacted by how hard people work and how successful they are.” A merit-based plan for associates debuted last year, followed by an announcement of a 20 percent reduction in starting salaries for new hires.
In turn, Reed Smith has invested in its employees. With direction from the Wharton School at the University of Pennsylvania, the firm created an intensive continuing education program dubbed Reed Smith University. The program offers courses in technology, leadership, and business development, in addition to law, with senior litigatorJohn Smith serving as chancellor. The six-year old program has been cited as a model for continuing legal education. A related program, CareeRS, develops associates’ core skills, or competencies, in four areas: legal skills, citizenship, business skills, and clients.
“Law firms have always been pretty good at helping people develop sharper legal skills. It’s what we do,” notes Jordan. “RSU adds other things not learned in law school. Leadership. People management. Strategic planning. Profit and loss management. Making the kind of decisions about which investments to fund or not fund. The great lawyers of today and the future are able to do all these other things.”
Does that mean that law schools should revamp their current curricula? Jordan sees that possibility on the horizon.
“I think law schools will ultimately increase their focus and attention on exposure to the fundamentals of the legal business — the art of client development and retention, in addition to client service, some exposure to the fundamentals of the economics of practice, whether it’s a big firm or small firm. There’s probably a place also for law schools to participate in educating people about leadership and strategy. Again, we’re not going to turn law school into a trade school. We’re not going to turn it into a business school. But the lines are not as sharp as they used to be.”
That blurring of lines presents opportunities. “What’s interesting about this moment in time in the legal industry is there’s less of a lemming effect than there historically has been. A tougher environment forces people to think more sharply and clearly about what’s right for them.”
Jordan came to Reed Smith as a summer associate after his second year of law school, and credits his Pitt experience with giving him early grounding and confidence.
“I was at the law school at a really great time. They had a fantastic group of young professors who were really taking Pitt into a great place in legal education, including [current university] Chancellor Nordenberg, who was a young law professor then. He and others had an energy level and an excitement level that came through in the classroom.”
Jordan admits he misses litigation. “I loved practice,” he says. “[But] I use those skills every day: taking big piles of complex information and simplifying them into coherent points, telling stories and communicating what we are doing, just like you would talking to judge or jury. Having people trust you, believe you and accept what you’re saying is a critical part of leading the firm. It’s just like presenting a case.”
Jordan’s term as global managing partner ends in 2012, and he declines to speculate on what happens next. “Sometime between now and then we’ll figure out whether I can keep going, or should keep going. It’s a two-way conversation. So far, we’re having a lot of fun.”