August 20, 2019

Peter Mullen, a Force Behind Skadden Arps, Dies at 83

Sandwiched between those years was 20th-century America’s longest run of mergers, acquisitions and divestitures, lasting from 1974 to 1989. Mature companies were seeking to rekindle their growth through new business combinations, and takeover artists were lunging after chances to reap big short-term gains.

Under Mr. Mullen, who died on Saturday at 83 in New Preston, Conn., Skadden Arps spotted the potential of mergers and acquisitions early on and then captured that business when New York’s more genteel corporate law firms were mostly shunning it.

The white-shoe firms “said that takeovers were a one-time blip,” recalled John C. Coffee Jr., a law professor at Columbia, who in the mid-1970s practiced at one of those firms, Cravath, Swaine Moore. “They said that Skadden was riding a short-term wave, and that it would be caught in a terrible crunch when it crashed and disappeared.”

They misjudged. Advising on corporate takeovers proved to be a lasting and highly profitable business, attracting big corporate clients instead of scaring them off. Mr. Mullen and his colleagues plowed the earnings into Skadden Arps’s expansion and diversification into other areas of the law.

By the time merger mania died down in 1989, after the collapse of the junk-bond financier Drexel Burnham Lambert, Skadden Arps was no longer a small, specialized firm but a fixture in the top tier of the corporate bar, claiming about a third of the Fortune 500 as clients. It remains the world’s second-largest law firm by revenue, according to The American Lawyer, and the 11th-largest by number of lawyers.

“We like to think of our client as Wall Street,” Mr. Mullen once told an interviewer.

His death, while en route to a hospital, was caused by a heart attack, his son-in-law, Thomas White, said.

Mr. Mullen joined the firm as a lawyer but ended up devoting most of his time to its business operations. Joseph H. Flom, the firm’s high-octane chairman at the time, reveled in takeover battles; Mr. Mullen excelled at building consensus among the firm’s powerful partners, making strategic decisions about growth and compensation and promoting the kind of community engagement that others at the young firm tended to overlook.

In the 1970s, Mr. Mullen started the practice of withholding 7.5 percent from each partner’s earnings — after taxes — and using the money to finance the firm’s growth. For all the leverage and exotic financial instruments that Skadden Arps helped its clients employ, Mr. Mullen saw to it that the firm itself grew without taking on debt.

“It was radical,” Lincoln Caplan wrote in his history of the firm, “Skadden: Power, Money, and the Rise of a Legal Empire” (1993). “It left Skadden with a mountain of cash — 100 percent more capital than it needed, by the firm’s estimation, and the means to grow in any direction it wanted.”

Skadden Arps partners sometimes cribbed from the Gospel in explaining Mr. Flom’s and Mr. Mullen’s contrasting roles at the top of the firm, Mr. Caplan wrote, quoting one executive as saying, “Joe was Jesus, and Peter was the rock on which he built his church.”

The two men shared a trait that was common among many who joined the firm in its upstart years. They were outsiders who had been rejected by the established law firms that had a hammerlock on the blue-chip corporate and investment banking work that Skadden Arps sought in the 1960s.

Mr. Flom, the son of Jewish immigrants from Russia, did well at Harvard Law School but attracted no job offers until the tiny new firm of Skadden, Arps Slate came looking for its first associate.

Mr. Mullen came from a Roman Catholic family and was educated by the Jesuits, first at the Loyola School on the Upper East Side of Manhattan, then at Georgetown, in the days when Catholics were still unwelcome in the largely Protestant white-shoe firms. After Columbia Law School, he spent nine years at the firm of Dewey Ballantine, only to be voted down for a partnership.

“He was mature, confident and ambitious, and a very good corporate lawyer,” Mr. Caplan, who is on the editorial board of The New York Times, recalled in an e-mail. “But he had that essential Skadden need and drive because, in the eyes of the New York City bar then, not making partner was a public failure from which he needed to recover. When he went to Skadden in 1961, at the age of 32 (he turned 33 that year), he was motivated to succeed.”

Peter Paul Mullen was born in Manhattan in April 8, 1928, the son of John and Elsie Mullen. His father was a New York State Criminal Court judge, and his mother was a librarian. Skadden Arps made him partner after his first year with the firm, and managing partner in 1967, putting him in charge of its business operations.

He served on Georgetown’s board from 1982 to 1998 and was its chairman from 1985 to 1992. He was also once chairman of Orbis International, which provides eye care in developing countries.

Mr. Mullen is survived by his wife, Cecilia, known as Billie; five children, Peter, Kirby White, Elaine Peer, Lucy Ball and Jeff; and nine grandchildren. Mr. Flom died in February at 87.

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Digital Domain: Sprint’s Unlimited Data Plan, and the Challenges Ahead

Brave little Sprint, with about a 15 percent market share, is our best hope for keeping a piece of the mobile Internet free of meters. But if data gluttons are the only ones who partake of Sprint’s feast, unmetered service will be unsustainable.

“The simplicity and peace of mind from unlimited services at one consistent price must attract mainstream users, not just outliers,” says Will Souder, Sprint’s vice president for pricing.

Mr. Souder compares Sprint’s business to that of a pizzeria that offers an all-you-can-eat lunch. “If I come in and eat eight pieces, that needs to be balanced by my sister coming and eating at the salad bar,” he says.

Three years ago, Sprint introduced its “Simply Everything” plan for $99.99 — covering, within the United States, unlimited voice calls, data and text messages. “When we launched, we had a lot of trepidation,” Mr. Souder says, “but we were pleasantly surprised with the number of relatively light users who were willing to pay more for this plan.”

If Sprint Nextel’s financial results were showing a nicely profitable business, humming in the shadows of its much bigger rivals, Verizon Wireless and ATT, customers who hate meters could rejoice.

Unfortunately, the company has not posted annual net profits since 2006. Mr. Souder says the unlimited plans have not contributed to the losses, saying Sprint has had four consecutive quarters of growth in average revenue per user and has reversed a trend of losing customers.

Sprint has been monitoring use patterns and costs, and in January it increased the price of “Everything” plans for newly activated smartphones by $10 a month. The move has helped the company keep its business on a healthy, sustainable foundation, Mr. Souder says.

Sprint is behaving more like some carriers across the Atlantic. Smaller operators in Europe “tend to be more aggressive in pricing strategies” and are using unlimited data plans to differentiate their offerings from larger rivals, says Thomas Tschentscher, a partner at the international law firm Freshfields Bruckhaus Deringer who specializes in telecommunications.

In the United States, T-Mobile sells “unlimited” plans, too, but it throttles back the download speeds when data use passes a certain threshold each month.

Mr. Tschentscher says that in Europe, data throttling is all but absent. “Because of the interoperability of the handsets, customers in Europe can easily switch carriers,” he says. “So it would be a competitive disadvantage for a carrier to impose throttling down if the others don’t.”

Sprint says its network hasn’t been swamped by too many users wanting to watch movies or television shows on Android phones. “Long-form video on the handset today is still in its infancy,” Mr. Souder says. Of course, tablets are a different matter — and that’s why Sprint has never extended unlimited data plans to them.

Asked what happens when smartphone screens become larger and some tablet computers become smaller, blurring the boundaries between the two, Mr. Souder said Sprint would “constantly evaluate our pricing strategy.”

Sprint’s network has accommodated the arrival of Android phones. The iPhone may come to Sprint next month, if rumors on tech blogs prove accurate. Mr. Souder declined to respond to questions about how his network could absorb a sharp spike in data use if Sprint — speaking only hypothetically, of course — were to add an unnamed, but very, very popular smartphone.

Some independent analysts see nothing but difficulties ahead for Sprint. Craig E. Moffett, a vice president and senior analyst at Sanford C. Bernstein Company, says scale is essential to this business and is the reason that the only profitable major carriers are ATT and Verizon Wireless.

Mr. Moffett notes that Sprint has $4 billion in debt that will soon mature. It is also the majority owner of Clearwire, whose half-built 4G network covers only half the United States population. To have 4G cover the next 40 percent of the population, spread across a much wider area, it will have to build eight times as much infrastructure as required for the first phase, he says, adding: “It can’t afford to abandon Clearwire but it can’t afford to finish it either.”

If Sprint doesn’t complete the next-generation network, it won’t be able to keep unlimited data plans for long, Mr. Moffett says, because “the burden on the 3G network will be too great.”

There are no signs that Sprint will pull back from unlimited data, at least for now. In fact, the company seems to be staking its identity on the appeal of all-you-can-eat pricing. It may even expand the concept further.

Speaking at the Dive Into Mobile conference last December, Daniel R. Hesse, Sprint Nextel’s C.E.O., talked about the logical next step: including the phone, tablet, PC, e-reader and whatever in a single plan. The idea was mentioned merely as a possibility, and it was not clear whether it would be feasible to have unlimited data for multiple devices on one plan — the ultimate in simplicity.

Sprint’s unmetered wireless business needs more customers to reach scale. Salad eaters who like one worry-free, all-you-can-eat price are especially welcome at the table.

Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University. E-mail: stross@nytimes.com.

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