Smith Gambrell & Russell reaped big gains in revenue and profit last year as sizable investments in new partners and offices the prior year paid off.

Smith Gambrell posted a notable 12.1 percent revenue increase to $114 million in 2018, which pushed up revenue per lawyer by 4.7 percent to $514,000. That followed more modest 4.2 percent revenue growth in 2017.

Net income jumped 15.4 percent last year, hiking up profit per equity partner by 13.3 percent to $708,000. That followed flat net income in 2017, which also held PEP flat that year at $625,000.

“We had strong momentum going into 2018 from the prior investments that we made in people and the places we established offices,” said the firm's chairman, Stephen Forte. “As a result, client activity and our numbers were up considerably.”

Forte added that the firm's aggressive 2017 expansion—opening offices in the U.K. and Germany and significantly adding to its New York office—was done without taking on debt. “You can borrow or take it out of the cash flow. Our aversion to debt affected the numbers in the short term, but our view is long term,” he said.

Smith Gambrell's average annual lawyer head count in 2018 increased 7.2 percent to 222 lawyers, while the equity partnership remained stable at 53, up one from 2017.

New Partners, Offices

Last year Smith Gambrell continued to expand into new markets. It added a Los Angeles office at the beginning of 2018 through a combination with an 11-lawyer business boutique, Rodi Pollock Pettker Christian & Pramov, to serve the firm's Asia-based clients.

Also at the start of the year, the firm added partner Josh Gentner to one of its key practices, aviation finance, from Vedder Price in New York and, in Atlanta, it recruited Bill Long to its IP practice from Dentons.

It ended the year with a new Miami location—its 10th—as a gateway to Latin America. Smith Gambrell launched the Miami office Dec. 1 with an international aviation finance team from Greenberg Traurig, led by partner Jeffrey Tenen with another partner, Israel Sanchez, and counsel Ellen Fontanella, who is licensed to practice in New York and Brazil. Tenen and Sanchez headed Miami-based Greenberg's global aircraft equipment finance and leasing practice.

The firm also announced in December that it had inked a deal with Selig Enterprises to become the anchor tenant in a new 31-story office building at 1105 West Peachtree St. N.W., where it expects to move in mid-2021.

“We will be forward-looking,” Forte said, adding that the new lease decision was the result of a lengthy search process to “bring our infrastructure into a modern office situation.” That means “tightening up office space,” including one-size offices for all attorneys, building in more public meeting and collaborative space, and other current law office trends.

The new office tower offers a rooftop deck with a restaurant and pool, shared with an adjacent hotel on the site. Those amenities, which will allow the firm to host more client and community events, were “a big part of the attraction for us,” Forte said.

Smith Gambrell started 2019 with another combination, this time in Atlanta. It absorbed 12-lawyer employee benefits boutique Mazursky Constantine, giving it more than 20 lawyers specializing in employee benefits and executive compensation matters. Founder Don Mazursky now co-heads the firm's benefits practice with its existing leader, Andy Fawbush. The deal pushed up Smith Gambrell's head count to more than 240 lawyers.

“We continue to look for good opportunities for expansion for our major practice areas for existing clients–and geographical expansion where it makes sense,” Forte said, adding that the firm is interested in building on its new West Coast presence in Los Angeles.

The Work

Forte said the aviation finance, M&A and class action defense practices were busy in 2018.

In the year's largest matter out of New York, the firm's aviation finance team, with an assist from its U.K. offices, advised Boeing on more than $3 billion in financing for an order from Jet Airways in India for 75 Boeing 737 MAX aircraft. (These types of planes have been grounded worldwide since mid-March, due to concerns over software.)

Smith Gambrell handled the real estate work for a $1.4 billion timberland deal for Catchmark Timber Trust with Alston & Bird as co-counsel on the M&A side. Catchmark acquired more than 1.1 million acres of timberland in Texas, one of the largest timber transactions in a decade.

It represented U.S. manufacturer Quikrete Holdings in its $156 million acquisition of Boral, a block manufacturer. It also advised Scandinavian Tobacco Group on its $62 million acquisition of U.S. cigar retailer Thompson & Co. of Tampa.

On the litigation front, Smith Gambrell is defending Fulton County and 14 Fulton cities in a putative class action brought by five residents, including Atlanta City Council President Felicia Moore, accusing the county of “sales chasing,” which means raising the tax assessment value on recently sold homes to the new sale price without reassessing the rest of a neighborhood. The plaintiffs claim the practice violates state law, which requires valuation to be uniform across neighborhoods, and that the city could be on the hook for as much as $38 million.