New leader, challenges for Holland & Knight

 
Just two months into his new job as managing partner of Holland & Knight, Steven Sonberg has already started putting his stamp on the 1,100-lawyer firm.

One of Sonberg’s first orders of business was not particularly pleasant: He had to lay off 70 secretaries and staffers in order to cut costs.

But last week, Sonberg got a happier task — the promotion of three partners to managing partners, in Boston, Washington and Fort Lauderdale, Fla.

And Sonberg, facing pressure from clients to lower fees in this economy, is instituting a creative new fee structure. The firm, he said, is now discounting fees for some clients in exchange for “kickers” or “success fees” — essentially bonuses awarded to the firm when it wins cases.

Sonberg, 61, was elected to a five-year term as managing partner of the firm at its annual firmwide retreat in March. He replaced Howell Melton, who did not seek another term.

In his first interview as managing partner of Holland & Knight, Sonberg, a popular, 15-year, Miami-based partner at the firm who sought out the leadership role, discussed his goals and plans for the firm with The National Law Journal.

Closer to clients

Holland & Knight has had significant financial bumps in recent years. Sonberg said his top priority is to ensure that the firm stays on solid ground financially. And in this market, he knows that won’t be easy.

“I want to make sure we do as well as we can and boost firm performance,” Sonberg said. “We need to get closer to clients and be a counselor and adviser to them, to try to be proactive to clients.”

Holland & Knight is the 18th-largest law firm in the country, according to the NLJ 250 — The National Law Journal‘s annual survey of the nation’s largest law firms by number of attorneys — with 22 offices throughout the United States and in China and Mexico.

After meteoric national and international growth in the 1990s engineered by former managing partner Bill McBride, who stepped down to run for governor of Florida, Holland & Knight contracted in recent years to shore up its shaky financial state.

In 2002, the firm laid off 60 lawyers and 170 employees as part of a major fiscal overhaul. The moves were made in response to dragging profits and relatively low profits per partner. Then in 2005, Holland consolidated and closed a number of offices around the country, in the process laying off 50 lawyers and 70 support staff.

The firm’s recent layoff of 70 secretaries and nonlawyers was a similar, but not as extreme, belt-tightening, he said, adding that no further layoffs — and no lawyer layoffs — are planned.

Sonberg spent his first two months in charge visiting many of the firm’s U.S. offices to find just out what his lawyers want. And what they want was hardly a surprise: to see the firm make more money and grow its practice areas. Raising lawyer salaries, increasing profits for equity partners and securing new clients — these are hardly easy tasks in this faltering economic climate.

Raising lawyer salaries, increasing profits for equity partners, securing new clients — these are hardly easy tasks in this faltering economic climate.

One creative idea Sonberg has implemented is discounting client fees but adding ‘kickers’ or ‘success fees’ if the firm is successful in a case.