Andrew Smulian, chairman and CEO of Akerman. (Photo: J. Albert Diaz/ALM)
Miami-based Akerman, one of Florida’s largest law firms, added 33 lawyers to its national total in 2016 and lifted revenues to an all-time high of $349 million.
The increase, from $337 million in 2015, marks the sixth straight year of gross revenue gains for the firm, according to Akerman chairman and CEO Andrew Smulian.On a percentage basis, gross revenue was up 3.6 percent—just under half a percent less than the increase the firm reported in 2015.
The firm’s increased head count meant slightly lower profits in 2016. Spot raises and new hires increased non-equity compensation expenses by nearly 17 percent. The increased expenses nudged down the firm’s 2016 net income by about 2 percent to $127 million. Correspondingly, profits per equity partner dropped by 2.2 percent, to $660,000, and the profit margin dropped two points to 36 percent. Revenue per lawyer dropped as well, by 2.5 percent.
“This was a building year,” Smulian said, referring to the short-term budgeting effects of the additional lawyers. “[The new hires] are litigators and trial lawyers and they do a lot of work within the oil and gas industry, within energy, class action defense work and also international arbitration and appellate matters.”
The firm now has 595 full-time-equivalent lawyers, including 337 partners in 24 offices. The jump in lawyer count from 562 in 2015 was exclusively in the non-equity partner category: The number of equity partners stayed steady at 193 equity partners, but the number of non-equity partners jumped by 32 percent to 144.
Smulian said the firm also adjusted associate salaries in line with the market, but did so on a merit-based system as opposed to lock step.
The 97-year-old firm, which began in Orlando, spent decades with offices only in Florida. But about 15 years ago, it began opening offices in other parts of the country in response to client needs, Smulian said. The growth accelerated in the last several years, vaulting the firm into the Am Law 100.
The firm’s Chicago office, which opened three years ago, grew to 38 full-time-equivalent attorneys in 2016, compared with 25 in 2015, Akerman reported. The Los Angeles, New York and Miami offices grew as well. The firm opened four new offices in 2016—one in New Orleans and three in Texas—in Austin, San Antonio and Houston. This was done partly in response to the urging of a longtime client in the banking and financial services industry, Smulian said.
“It’s been a great building block to meet our clients’ needs,” Smulian said, referring to the Texas offices. “They’ve integrated extremely well into our practices, particularly in the litigation practice. They are working together very well together with the existing lawyers that we had in Dallas and across the firm.”
Smulian, who became Akerman CEO in 2008, will be replaced by Miami national fraud recovery practice partner David Spector early next year. Smulian, 70, was the 35th attorney to join the firm’s Miami office in 1995. Spector, 45, joined the firm in 2009 and has quickly climbed the ranks. He takes over the chairman and CEO role in February 2018.
Smulian said that as he enters his final year at the helm, he hopes to continue to expand the firm’s litigation, middle market mergers and acquisition transactions, real estate, insurance, and financial services practice areas. He attributed much of the firm’s 2016 revenue growth to those areas.
“A lot of it is attributable to many of our core practice areas in middle-market transactions and the large number of real estate lawyers we have,” Smulian said. “In the financial services industry our consumer financial services offerings did quite well—lots of work for Bank of America, CitiBank and Wells Fargo in that area. Our fraud recovery practice was very strong.”
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