Steven Sonberg is up for re-election as managing partner of Holland & Knight next month, but he isn’t worried.
By nearly all measures, the firm with Florida roots had a good year with revenue up 5.3 percent to $598 million, net income up 3 percent $164 million and profits per partner up 6.7 percent to $950,000 in 2012.
Bill Brennan, a law firm consultant at Altman Weil, called Holland’s 2012 performance "healthy."
"A revenue [per lawyer] gain of 3.2 percent is a healthy increase in this market, so that’s a good thing," he said. "When you see 6.7 percent increase in profits per partner, that’s extremely good compared to what we’ve been seeing in the marketplace and what other Am Law 200 firms are seeing."
Total lawyer head count at Holland & Knight, one of Florida’s largest law firms, increased 2 percent to 926 lawyers in 2012 from 908 in 2011. The firm has 17 U.S. offices as well as offices in Abu Dhabi, Beijing, Bogota and Mexico City.
Sonberg, the firm’s managing partner for five years, attributed the positive financial results to a "significant jump" in transactional work, intellectual property litigation, health care law and, to a smaller degree, a return of real estate work.
Intellectual property is an area Holland & Knight has been trying to expand for several years, primarily in the firm’s Boston office but also in Washington and Miami, Sonberg said. One of the firm’s biggest IP clients is Ericsson AB, the Swedish-based global telecommunications company.
"We also are representing pharmaceutical companies on IP matters," he said. "One of our laterals brought over a significant IP practice in New York so that’s been a good opportunity for us, and we think it’s starting to pay dividends."
The firm also started a data privacy and security practice last year in New York and Washington to represent banks, health care concerns and others.
Holland picked up a high-level partner in its New York office last year when Stuart Saft, former head of the global real estate practice at the defunct Dewey LeBoeuf, became co-chair of Holland’s New York real estate practice. He was among 28 laterals added in 2012, a key to its successful year, according to Brennan.
"Every law firm is trying to grow, and they are trying to do that through lateral partners or through lateral acquisitions," he said. "That is key."
However, the firm lost six equity partners in the last year, leaving 173. Sonberg attributed the 3.4 percent drop to retirements, departures and the fact that new laterals are typically brought in as non-equity partners.
Holland exceeded its revenue targets but was only able to realize a 27 percent profit margin due to continued rising expenses, including compensation to attorneys and staff, benefits and particularly health insurance costs.
Sonberg said morale is bright at Holland as profits per partner remain on the rise. Lawyers also increasingly appreciate the firm’s open compensation system and the fact that financials are posted on a monthly basis, given what happened at Dewey, which hid big bonuses to laterals before it collapsed. He said lateral candidates are increasingly asking to view the firm’s financial records, which Holland gladly turns over.
"The mood is upbeat here, and people are very pleased with Steve’s leadership and pleased with the progress of Holland & Knight through some difficult years," said longtime Miami partner Tracy Nichols. "The economy is still pretty rocky, so the fact that Steve’s leadership team has been able to eke out a 5 percent increase in revenue is a tribute to that."
If he is re-elected next month to another five-year term, which is expected since no opponent has surfaced, Sonberg plans to continue expansion in Latin America, where Holland opened an office in Bogota last year, and launch new offices in Canada and Texas.
"Profits per partner are up 40 percent from when I took over in 2008," he noted. "I think we’ve had a very successful run. We’re a stronger firm today than when we took over."
When will the firm reach the 1,000-lawyer mark?
Sonberg is not reaching for that goal.
"For a long time, we’ve focused on head count rather than profitability," he said. "That is no longer the case."