The Florida Am Law 200
Florida's seven Am Law 200 firms —Greenberg Traurig, Holland & Knight, Akerman, Carlton Fields, GrayRobinson, Shutts & Bowen and Greenspoon Marder — reported a strong aggregate performance in 2018.
Each firm leveraged its own strategies: Some plundered the lateral market to grow head count, while others shed unproductive partners in pursuit of profits. Experts say the success reflects the national legal market, which saw its best year since the 2008 Great Recession.
Gross revenues grew by 6.2% on average, with GrayRobinson the only firm posting negative growth of less than 1%. Greenspoon Marder and Shutts & Bowen saw double-digit increases of 13% and 10.6%, respectively.
Carlton Fields saw a 15.5% rise in profit per equity partner, the highest in the group. Shutts & Bowen came in second with a 10.5% growth in profits. On average, profits per equity partner saw a 6.3% jump across all firms.
Head counts, however, were a mixed bag. Three of the seven firms saw flat or negative head counts — Greenberg Traurig, Carlton Fields, and GrayRobinson — while Greenspoon Marder stood as the outlier, swelling its head count by 14.3%.
(Cole, Scott & Kissane was not included in this analysis as this is their first year reporting financials to ALM.)
Each firm gave unique reasons for its success.
Shutts & Bowen kept costs low and picked up star lateral hires such as IP attorney Steven Greenberg and government attorneys Rachel Nordby and Benjamin Gibson. Holland & Knight brought on a staggering 64 lateral partners targeting their key strengths of private equity, health care, white collar, real estate and financial services.
Greenberg Traurig's international offices across Asia, Europe and Latin America saw immense revenue growth, with the firm's Mexico City office posting its best year to date. Akerman, despite leadership turmoil, saw gains in the firm's corporate, real estate and litigation practices, closing multiple multi-million dollar deals in 2018.
Carlton Fields' focus on efficiency and cost control propelled profits well past double digits — notwithstanding the firm's modest revenue growth. Greenspoon Marder continued its explosive growth streak, as the firm looks to invest more on the west coast.
And the only firm to not see an increase in gross revenue — GrayRobinson — saw a sizable increase in profits per partner — evidence, the firm said, of their push toward leanness.
While each firm gave its own unique reasons for last year's success, experts say much of the success can be attributed to the overall strength of the U.S. legal market and economy.
"We’re about 10 years into a vibrant economy so it’s not a surprise that law firms benefit from that, particularly from transaction activity," said Kent Zimmermann, principal at the Zeughauser Group. "The biggest driver to the legal market is the strength of the economy."
U.S. law firm survey data collected by Wells Fargo reported average revenue growth of 5.9% and average net income growth of 7.6% — the best year since the Great Recession.
Zimmerman added that South Florida is becoming a priority for many firms that as yet do not have a robust presence. Rate pressures are much lower than Chicago, New York or Houston, the economy is poised to grow, and the benefits of scale are becoming increasingly attractive.
A survey by Citi Private Bank’s Law Firm Group found that despite cost pressures from the latest round of associate pay raises, the Southeast legal market saw revenue growth of 7.7%. Citi also found that average head count grew 3.2%, vastly outpacing the national average of 1.4%.
"South Florida has a very active group of mid-market companies, and a lot of investment and money flowing through both domestically and overseas," Zimmerman said. "Lawyers follow the money because that's where the legal services go."