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WeWork cofounder Adam Neumann
- When it came to negotiating his $1.7 billion exit package from WeWork, Adam Neumann turned to an unlikely ally: Bob Schumer, a Manhattan corporate attorney known for advising blue-chip companies on mergers and acquisitions.
- Schumer, a well-known lawyer at Paul Weiss, is a fairly recent player in the WeWork saga but was key to finalizing Neumann's exit from the company.
- Neumann drew heavy criticism for his management of and financial dealing with WeWork. Schumer is no stranger to having controversial clients, though, having advised Elliott Management, one of the more aggressive activist hedge funds, at a time when his firm's CEO clients may have raised eyebrows.
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Adam Neumann's $1.7 billion exit package from WeWork has drawn the ire of many employees, who saw the deal as a slap in the face given the co-working company is planning thousands of layoffs.
The package came after WeWork's IPO was derailed in part by investor concerns about the now ex-CEO's leadership of and financial entanglements with the company he cofounded.
Neumann's ability to secure his exit deal is in no small part thanks to Manhattan corporate attorney Bob Schumer, an unlikely ally who usually helps companies execute mergers and acquisitions for a living.
Schumer, a partner at law firm Paul Weiss and the brother of US Senator Chuck Schumer, has largely avoided the glare of media attention that has crashed down on the workspace company after its valuation went from $47 billion to $8 billion in a matter of months.
A lesser-known figure in the WeWork saga until last week, Schumer's role in representing Neumann's personal interests during WeWork's bailout by SoftBank emerged as central in shaping one of the more climactic moments in the coworking company's downward spiral.
Under the terms of the SoftBank takeover, Neumann will step down as chairman and relinquish his voting rights, but get the option to sell nearly $1 billion of stock in a tender, a $185 million non-compete, as well as a $500 million credit line.
SoftBank has now taken control of WeWork and installed its COO, Marcelo Claure, as executive chairman.
Schumer began working for Neumann as far back as late last summer, according to a person with direct knowledge of the matter, but his work only recently picked up when Neumann stepped down as WeWork's CEO in September. He was introduced to the WeWork cofounder by the company's now co-CEO Artie Minson, the person said.
Minson is the former chief financial officer of Time Warner Cable, where he had worked with Schumer on the company's 2016 merger with Charter Communications. Schumer also worked on earlier discussions with Comcast, and he has stayed close with a number of Time Warner Cable executives.
Schumer is currently advising the special committee of the board of directors of CBS Corporation in its merger with Viacom.
Paul Weiss.
Bob Schumer.
"He gets down in the trenches with you, and he's right there riding side by side," said Robert Marcus, former CEO of Time Warner Cable who once worked with Schumer at Paul Weiss and then became his client after going in-house in the late 1990s.
Blair Effron, co-founder of investment bank Centerview Partners, called Schumer "practical," with a style of speaking to people in "plain language," and a knack for assessing risk and reacting swiftly in thorny situations.
"If I had an issue, he would be on my list, so I'm not surprised that Adam Neumann hired him," he said.
Becoming an M&A powerhouse
Paul Weiss declined to comment on its representation of Neumann, but Business Insider spoke with nine colleagues and friends of Schumer and reviewed his work history to shed light on the man responsible for preserving Neumann's billionaire status.
Schumer, a graduate of Columbia Law School, is not known for being afraid to speak up. Ever since law school, he was considered a big personality, raising his hand and speaking his mind in class, according to a person who attended school with him.
That zeal followed him to Paul Weiss, where he became known for building the corporate practice of a firm primarily known for litigation, and advising on big matters like Endeavor Agency's merger with William Morris Agency to create talent agency powerhouse WME.
By many accounts, Schumer's representation of Neumann is a departure from his ordinary workflow of advising on large mergers and acquisitions.
That's because, generally, individual employment matters are not nearly as lucrative for big law firms as wholesale company deals.
But Paul Weiss - where top partners can earn more than $6 million a year - is known for making an exception for those with deep pockets, such as representing SAC Capital founder Steven Cohen in insider trading charges brought by federal prosecutors and junk-bond financier Michael Milken in federal charges of securities violations.
It's also not the first time Schumer himself has advised a client that raised eyebrows.
Breaking up with Elliott
Prior to 2015, Schumer served as legal counsel to the activist hedge fund Elliott Management in some of its most prominent deals and campaigns to shake up large companies, including oil and gas producer Hess Corporation.
Activist hedge funds like Elliott have been considered antagonistic to corporate execs because they buy huge stakes in companies and then demand changes aimed at lifting their stock price. This can mean the ouster of a CEO, layoffs, or spinning off business divisions. CEOs, therefore, might be unhappy to learn that their lawyer is representing an activist.
Elliott has a reputation as one of the most aggressive activists, and is known for unnerving CEOs while researching their management of a business. Just seven weeks after acquiring a $3.2 billion stake in AT&T, Elliott reached an agreement that the company would cut costs, bring on two new board members, and review portfolio companies.
Schumer had to drop Elliott as a client after expanding his M&A group and adding a partner from the firm Cravath Swaine & Moore. This partner, Scott Barshay, had clients that didn't appreciate the firm's association with Elliott, according to a person with direct knowledge of the matter.
With regard to the Neumann representation, people close to Schumer don't expect the matter will affect Paul Weiss's standing as a law firm. And they do not see anything wrong with the representation, despite the outcry from WeWork employees and even a Republican senator in Arkansas who sharply criticized the exit package on Twitter.
Their thinking is that everyone is entitled to legal counsel and that Schumer simply did what he is best at: producing a great result for a client.
"If he is having legal counsel, why not have the best?" said Marcus, the former CEO of Time Warner Cable, of the Neumann representation.
Of course, this is something Marcus knows all too well.
When the businessman left Time Warner Cable in 2016, he received a $93 million exit package himself.
