(Photo: J. Albert Diaz/ALM)
Greenberg Traurig continued to make steady gains in 2016, with gross revenue growing more than 4 percent to nearly $1.4 billion.
But the full-service firm, which celebrates its 50th anniversary this year, plans to take a break from expanding in 2017 and will instead concentrate on efficiency and profitability. It is taking a wait-and-see approach, said firm executive chairman Richard Rosenbaum—in part because of the political climate and concerns about a move away from globalization.
Greenberg Traurig’s $1.37 billion in gross revenue last year was an increase of $56 million, or 4.2 percent, over 2015. The firm’s net income grew by 6.4 percent to $476.5 million. Profit per equity partner grew 4.7 percent to $1.5 million. The firm’s profit margin was 35 percent.
Greenberg, which had 308 equity partners in 2016, added 33 full-time-equivalent non-equity partners, bringing the total for the year to 982 equity and non-equity partners. The firm’s full-time-equivalent lawyer headcount grew 4.2 percent, from 1,809 to 1,884.
Rosenbaum said its revenue was higher than the firm had expected—in part because it hired more attorneys than planned, including some in private equity, high-end litigation and leadership. Among the firm’s high-profile lateral hires in 2016 was former New York City Mayor Rudolph Giuliani, who took a leave of absence in October to work on the Trump campaign but has since returned to the firm.
Rosenbaum said private equity, related mergers and acquisitions and litigation were busier in 2016, and the firm saw a comeback in bankruptcy and insolvency work. He expects to see more of this in 2017, he said. Greenberg also is emerging as a major player in technology and medical devices, he said.
Greenberg opened its Berlin office in 2015, so 2016 included the first full year results for that outpost, which outperformed expectations. Other foreign offices also did well, including Warsaw, which was up 20 percent from the prior year. Those offices pay lawyers in local currency, he said, which allowed Greenberg to avoid most currency fluctuation issues.
The firm’s realization rates have remained steady, hovering around 85 percent. Greenberg did not raise rates as much as some other elite firms, Rosenbaum said, and did a good job of managing alternative fee matters. An increasing percentage of the firm’s work is done through nonbillable hours, with fixed fees being the larger component.
This year the firm will be working to integrate its past lateral growth, consolidate resources and strengthen profitability.
Rosenbaum expects that the legal market in 2017 will be shaped by political activity in the U.S. and abroad, and he expects to see growth in demand for litigation, government regulatory work at the federal and state levels, bankruptcy and insolvency matters, and possibly real estate transactions and mergers and acquisitions.
“We’re cautious about transactional growth, that’s why we’re not planning major growth this year,” Rosenbaum said. “This year we’re really planning to focus on the excellence, the efficiency, our profitability and not so much on any full boats of lawyers.”
Real estate work will continue, but many people believe that economics may cause a drop in that work, he said.
“Most of us are just waiting to see what happens with some of the political things going on, not only with the United States, but globally,” said Rosenbaum, who described the trend as “almost anti-globalization.” “What is that going to do to trade and to business?”
Closing borders, leaving the Euro zone, and adopting a mentality that says “let’s take care of ourselves first” will affect trade and the economy, but what that effect will be is still unclear, Rosenbaum said. The trend away from globalization may mean fewer companies will be bought and sold internationally.
“If that happens, that’s going to impact law firms that were built to serve that kind of globalized business environment,” Rosenbaum said.
But if the “America first” approach encourages investment in the U.S. in the short term, Greenberg will be well-positioned, as it is still primarily invested in the U.S., he said.
“There are firms that have more than 50 percent of their lawyers outside the United States,” Rosenbaum said. “If I was one of those firms, I’d probably be sleeping a little less well, right now.”
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