Atlanta

 

Smith Gambrell & Russell expanded its national and international footprint in 2017 while steadily increasing revenue.

The Atlanta-based firm reported a 4.2 percent revenue increase to $101.7 million after similar growth the prior year. A net head count increase of eight lawyers, for an average annual total of 207 lawyers, kept revenue per lawyer (RPL) flat at $491,000.

Smith Gambrell's aggressive expansion, opening offices in the U.K. and Germany and significantly adding to its New York office, kept net income flat as well, at $32.5 million, for profit per partner (PPP) of $625,000.

“We remained faithful to what we are trying to do strategically, building out an infrastructure that reaches far beyond the Georgia borders. We want to create our own platform that is national and international in scope to support our clients' needs,” said the firm's chairman, Stephen Forte.

The firm incurred no debt for its expansion into other markets, Forte noted. “It's coming out of our cash flow, so it does hit your short-term profits.”

Smith Gambrell ventured into Europe, opening London and Southhampton offices at the start of 2017 to expand its marquee aviation finance practice beyond the United States with three lawyers from U.K. firm Blake Morgan. Partner Ben Graham-Evans, who headed Blake Morgan's aviation group, opened the London office, while another partner, Mark Turnbull, opened the Southhampton office with associate Gareth Hawes. The U.K. aviation team has grown to six practitioners now.

The firm also opened a Munich office to support its long-established practice serving German companies for inbound transactional work, hiring Markus Bahmann from SSP Schiessl Rechtsanwaite.

And it continued to invest in its New York office, adding 10 lawyers through a combination with New York boutique Balber Pickard Maldonado & Van Der Tuin. Those lawyers handle litigation and real estate law and specialize in advising co-op and condo boards. It also hired three transactional lawyers from the U.K. firm Withers' New York office.

One of the firm's new Balber Pickard partners, Roger Juan Maldonado, will become the president of the New York City Bar Association next month, which Forte said adds to the firm's visibility in New York.

As Smith Gambrell marks its 125th anniversary this year, it continued expanding, opening a Los Angeles office on Jan. 1 through a combination with an 11-lawyer business boutique, Rodi Pollock Pettker Christian & Pramov. Forte said the California location—the firm's ninth office and first on the West Coast—will serve the firm's Asia-based clients, which include Kia Motors and Kumho Tire.

Forte said the midsize firm is not interested in a merger.

“Our expansion is a statement that that is not of interest to us. We are charting our own course,” he said. “We've shunned Big Law, despite having had many opportunities to become a part of it. We prefer our business model to someone else's that is really just interested in adding numbers to their throngs of lawyers.”

The firm still functions as a “true partnership that manages by inclusiveness and consensus-building,” Forte said, adding that it is a very different business model than Big Law provides.

The firm's strategy is to establish locations in gateway cities such as London, New York and Los Angeles, which is attractive to clients and supports sophisticated practices, he said.

Forte also said Smith Gambrell's expansion could continue this year, noting that the firm is looking at Texas and Chicago. “We see our practice areas as lending themselves to other major markets, particularly money centers,” he said.

The Work

Smith Gambrell's M&A practice stayed busy last year, Forte said.

In aviation finance, the firm represented Dublin-based Aergo Capital in its debut aircraft securitization deal, which received the 2017 “Aircraft Lessor Debt Deal of the Year-Europe” award from Global Transport Finance. Aergo issued $585 million in secured notes through METAL 2017-1 Ltd, backed by a portfolio of 26 aircraft in Indonesia, South Africa, Thailand and Pakistan.

The firm advised Atlanta-based Aaron's Inc. on the $140 million all-cash acquisition of its largest franchise, SEI, which owns 104 Aaron's stores in 11 states.

In another large transaction, it advised privately held staffing giant Adecco Group in its acquisition of BioBridges, a Boston-based staffing agency for the life sciences industry.

In an Asian deal, Smith Gambrell represented Hong Kong's NetDragon Websoft Holdings Ltd., an online gaming company, in its acquisition of L.A.-based JumpStart, which makes educational games for children.

On the litigation front, Smith Gambrell defeated class certification for Geico General Insurance Co. in a suit brought by VIP Auto Glass in the U.S. District Court for the Middle District of Florida over payments on auto-glass repair and replacements. The judge cited VIP Auto Glass's “contumacious and fraudulent” conduct in her order to dismiss with prejudice and award of attorneys' fees and costs to Geico.

In Atlanta, Smith Gambrell won a long-running dispute with its landlord, Cousins Properties, over a plan to place large, illuminated signage for another tenant, an accounting firm, atop its headquarters in the iconic Promenade building. An arbitration panel made up of Emmet Bondurant from Bondurant, Mixson & Elmore, F. Carlton King Jr. from Ford & Harrison and Senior Fulton County Superior Court Judge Philip Etheridge, ruled in December that the signage would violate Smith Gambrell's 2003 lease terms.

“We're happy it's over and that we're back to business as usual with our landlord,” Forte said.