Holland & Knight firm downsizes by 230 jobs

TAMPA -- A year ago, Holland & Knight couldn't grow fast enough. The law firm with Tampa Bay area roots had added 10 offices around the world in 15 months. Then-managing partner Bill McBride wasn't satisfied.

"What I've been worrying about the last couple weeks," he said last May, "is whether we're moving too slowly." Law firms today need a global reach to snag big clients, he argued.

But when McBride resigned from the firm's top post a month later to seek the Democratic nomination for Florida governor, Holland ceased growing. And on Tuesday, the nation's 7th-largest law firm reversed course: It fired 60 lawyers and 170 other employees, its first large-scale layoffs in memory.

Among the victims: 25 Florida lawyers, including three in Holland's Tampa and St. Petersburg offices. Though support staff was hit the hardest, some full partners with equity in the firm were dismissed, too. About 8 percent of the firm's 3,030 employees were affected.

Managing partner Bob Feagin called the moves a one-time event aimed at cutting fat during an economic slowdown. He said it's possible Holland will resume making acquisitions later this year, and he predicted certain offices (such as Chicago) and specialties (such as bankruptcy creditors' rights) will continue to expand.

"Growth will clearly be part of our future," he said.

Still, Tuesday's firings raise questions about whether Holland's future in the rapidly consolidating legal world is one of predator or prey. Few other large firms have cut staff in recent months. Those that did tended to be West Coast firms that gorged on dot-com clients that later failed, according to Pete Peterson of the Hildebrandt International consulting firm.

The layoffs also could provide fodder for opponents of candidate McBride, who has cited his stewardship of Holland as proof that a talented chief executive can juggle social responsibility and profit.

During McBride's tenure from 1992 to 2001, Holland grew from 284 lawyers and just one non-Florida office to 1,278 lawyers and 21 out-of-state and foreign offices. It also became known for its commitment to volunteer work on behalf of death row convicts, its provision of benefits to partners of gay and lesbian employees, and a $12-an-hour minimum wage for its lowest-paid employees. The volunteer work has since been cut back, and the wage guarantee has been suspended for new hires.

Under McBride, some employees grumbled over the firm's relatively low profits-per-partner, which ranked 89th nationwide in 2000.

"I was incredibly proud of the things we did (at Holland), but I haven't been in management there a really long time," McBride said from the campaign trail Tuesday, 11 months after resigning the firm's leadership and taking leave as a partner. "I don't know what opponents will do."

He added that Feagin appeared to be reacting to "economic circumstances" beyond Holland's immediate control.

Tuesday's firings were the culmination of a two-month review by internal and external groups.

Consultants from Deloitte & Touche's Atlanta office performed a detailed statistical analysis, evaluating employees and program areas by a dozen criteria, including the revenue they produced. A Rightsizing Task Force led by Fort Lauderdale partner Stephen Moss gathered suggestions from Holland's employees.

Working together, the two groups recommended specific employees and cost centers for targeted cuts. Feagin approved them. "I've been here 38 years," he said from his Tallahassee office. "It's certainly the first reduction in force that I've been involved in from a management standpoint."

There are other signs that Holland is on a diet. Associates, the junior lawyers working toward partnership, had their bonuses cut last year. Partners saw a pay cut.

Feagin also seems determined to recast Holland in a more competitive mold. Around June 1, he will unveil a revised compensation plan for Holland's associates. It is expected to replace a predictable salary structure based largely on years served with one based on productivity.

But McBride said he fully supports his successor and might well have done the same thing.

"The law firm is still an international and huge enterprise," he said. "Those numbers (of fired employees) are pretty small."

-- Information from Times staff writer Wes Allison and researchers Cathy Wos and Kitty Bennett were used in this report. Scott Barancik can be reached at barancik@sptimes.com or (727) 893-8751.

At a glance

NAME: Holland & Knight LLP

MANAGING PARTNER: Bob Feagin

2000 national rank

NUMBER OF LAWYERS: 7th

REVENUES PER LAWYER: 93rd

PROFITS PER PARTNER: 89th

PUBLIC SERVICE WORK: 34th

-- Source: American Lawyer, National Law Journal, Holland & Knight

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