by Art Levy
Holland & Knight’s managing partner starts his second five-year term on better footing than the first.
Within a few months after becoming Holland & Knight’s managing partner in April 2008, Steven Sonberg had to be wondering what he got himself into.
“By the end of 2008, we were projecting a fairly significant downturn for us and the rest of the industry,” he says. “We forecast about a 10% reduction in revenue. Our revenue at that point was $606 million, so we forecast a $60-million downturn in revenue. We were incredibly accurate. We actually hit the number on the head in terms of our 2009 revenue, which came in at about $545 million.”
For Sonberg, who had previously served as chairman of the firm’s 375-person business law section, the challenge was twofold: Weather the recession and figure out a way to bring back the lost revenue. The numbers indicate he has succeeded. By 2012, revenue topped $598 million. Profit per partner was up 7% in 2012 from a year earlier and 40% since 2009.
Now, as Sonberg begins his second five-year term as managing partner, he talks about how the firm evolved during the recession and what the business strategy will be going forward.
On the New Model
In early 2009, the firm laid off 70 attorneys and 173 support staff. The announcement came on the same February day that several other major U.S. law firms also cut staff. More than 1,000 law firm workers were out of a job. Overall, since 2009, the firm’s staff size decreased 13%.
“Reducing staff was a difficult decision,” Sonberg says. “It was really taking a hard look at the productivity of both lawyers and staff and making adjustments. Part of it was looking at technology and the opportunity for better efficiencies. What we did was we tried to adjust our operations to match our decrease in revenue.”
Traditionally, each attorney at a big law firm had a secretary, but no longer. At Holland & Knight three or four attorneys now share a secretary. With revenue approaching pre-recession levels, the firm has added staff lately, but employment probably won’t reach pre-recession levels.
“The advent of email, the talents and skills of lawyers who are coming out of school who have the ability to draft documents and type the documents themselves, those kind of things really decreased the necessity to have individuals within the system performing services that were frankly outmoded in the current context of where the industry is evolving to,” Sonberg says. “Firms were very slow to react to that, including ourselves, but I think we did a good job of improving on that side. This has allowed us to grow again.”
On the Next Step
The firm doesn’t have any operating or long-term debt. The strong financial footing, Sonberg says, gives the firm options. It’s looking to expand, but strategically. The firm, which has 21 offices, including one that opened last year in Bogota, Colombia, and more than 1,000 attorneys, is considering opportunities in Texas and Latin America.
“I think clearly one of the messages that I’ve been hearing from the business community in the state of Florida is to be more in sync and aligned with the opportunities in Latin America,” he says. “We think that makes very good sense for us, particularly with approximately one-third of our lawyers in Florida and the burgeoning growth opportunities throughout Latin America. I can see us having half a dozen new offices over the next two to three years.”