Am Law 100 Greenspoon Marder

PROSPERITY AT THE TOP

For the two largest Florida-based firms — Greenberg Traurig and Holland & Knight — healthy revenue growth of 7.2 percent and 5.6 percent, respectively, had no effect on their Am Law 100 rankings, which stayed at 14 and 42. That's unsurprising in a year when the Am Law 100 as a whole saw its gross revenue grow by 5.5 percent. Greenberg Traurig CEO Brian Duffy said, “It was a broad-based and deep, strong year" for the firm,  though he noted particular strength in Europe, where the firm has invested in key markets such as Amsterdam, Berlin, London and Warsaw. At Holland & Knight, managing partner Steven Sonberg said the firm has grown by seeking to double down in its strongest areas. That continued in 2017 as the firm added to its global compliance, private wealth, commercial lending and aviation finance capabilities with high-profile laterals. Florida's other Am Law 100 firm, Akerman, climbed a few spots in the rankings to 94th, pushed by gross revenue growth of 10 percent. The firm grew its lawyer head count by more than 6 percent with significant growth in its equity and nonequity partner tiers. The firm did all that in a transition year with Andrew Smulian working side by side with David Spector, who took over in February as chairman and CEO.

ON THE SMALLER SIDE

Florida's four Second Hundred firms, however, were competing in a field of firms with a much different story to tell. As a whole, the Second Hundred saw gross revenue decline by 0.2 of a percent in 2017. The discrepancy in performance between Am Law 100 and Second Hundred firms in Florida is a function of size, compensation systems and geography, said Christine Meade, a director in Major, Lindsey & Africa's Miami office. “There are firms in South Florida that have sizable offices in cities like New York, Chicago, San Francisco, Washington, D.C., for example, where billing rates can be higher,” she said. “This can have an influence on these numbers.” Of all seven Am Law 200 firms, Carlton Fields saw the biggest decline as revenue dropped 11 percent, only slightly less than in 2016. Head count declined as well, allowing revenue per lawyer to shrink by just 1.3 percent and profit per equity partner by 3 percent. The firm fell 10 places on the Am Law 200 rankings. CEO Gary Sasso noted Carlton Fields is still the highest-ranked Florida firm in the Second Hundred. The firm benefited from legal work resulting from the Great Recession, and as the economy slowed it saw that work decrease. “2016 and 2017 were part of a cycle for us. It was a dip, and we're growing out of it in 2018,” he said. Sasso said the firm has been focusing on rightsizing head count, including asking some lawyers “to move on,” and building up nonlitigation practices. GrayRobinson also saw PPP decline, by 2.7 percent, even though revenue grew 1.8 percent. That represented a slowdown in revenue growth for the second straight year. In an interview with DBR in December, managing director Mayanne Downs forecast the firm's 2017 revenue but said she expected an increase in profits, noting she had seen growth in government relations and lobbying, real estate and patent-related work and expected that to continue. Of the eight Florida firms that reported financial results, including midsize firm Bilzin Sumberg, only two outside the Am Law 100 saw both revenue and PPP grow. They were Greenspoon Marder and Shutts & Bowen. At Shutts & Bowen, revenue per lawyer eked up 1.3 percent, revenue increased by 3 percent, and PPP grew 4.2 percent. One of the year's highlights was the opening of a Jacksonville office  when Shutts & Bowen absorbed Gillis Way & Campbell and five of its six lawyers. Managing partner Michael Grindstaff said financial services, real estate, insurance defense, corporate, construction litigation and commercial litigation were particularly strong practices, while creditors' rights work continued to slow. And one-office litigation firm Bilzin Sumberg experienced a dip in revenue and profitability due in part to its stellar performance in 2016. Gross revenue was off 3.9 percent and PPP down 11.5 percent compared with the year before. “I don't want to give an impression that the prior year is an anomaly and we're done,” managing partner-elect Albert Dotson Jr. said.  But the 92-lawyer firm still has a healthy bottom line, with PPP that outranks all but one of Florida's large firms. At $1.46 million, it is second only to Greenberg Traurig. The two fastest-growing firms in Florida were Akerman, which continued a seven-year streak in revenue growth, and Greenspoon Marder, which saw revenue increase by 10 percent, in part thanks to its real estate practice and growing role as adviser to the budding cannabis industry. Greenspoon opened five new offices in 2017 and added nine partners, but head count overall grew by only six lawyers and the equity partner tier shrunk. The firm's net income was nearly flat, but it grew PPP by more than 5 percent. “As a result of years of planning ahead and building a very large, very sophisticated infrastructure, when we do an expansion into a city the additional cost is minimal. It's incremental,” co-managing director Gerald Greenspoon said. “We bring on the new employees with barely an increase in overall staff that increases the associated costs.”

SHOW ME THE MONEY

Corporate practices in general were moneymakers for the most successful Florida firms. Greenspoon Marder, Holland & Knight, Akerman and Shutts & Bowen all noted 2017 was a lucrative year for their dealmakers. Greenberg Traurig said all of its practices were strong in 2017 but that included some notable transactional achievements — like representing Australia's mall owner-operator Westfield Corp. Ltd. in its $25 billion sale to France's Unibail-Rodamco SE and advising medical device maker Exactech Inc. on its $640 million sale to private equity firm TPG Capital Management LP. Emphasizing transactional practices is a sensible strategy, McKenney said, as litigation makes for less consistent finances. And it may be part of the reason realization improved at Florida firms in 2017, he said. “When the work shifts toward more transactional work, the transactional work tends to be easier to manage,” McKenney said. “We see higher realization for that.”