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Jury's out on legacy of big law firm's chief

Will Holland & Knight's Howell Melton Jr. be remembered for his accomplishments - or a controversy?

By SCOTT BARANCIK
Published May 24, 2005

Four men have held the top post at Holland & Knight, a global law firm founded in the Tampa Bay area.

On three, the book is closed.

Chesterfield Smith is the founder and former American Bar Association chief who told President Richard Nixon that "no man is above the law." Bill McBride is the successor who took Holland national while stitching a heart on its sleeve. Bob Feagin is the interim caretaker who patched the financial damage McBride left behind.

How will history remember current boss Howell Melton Jr.?

The 53-year-old St. Augustine native may be known one day for his bid to resume the growth of the McBride era, his efforts to boost profitability, or his demand that Holland's 1,250-plus lawyers perform more free legal work for the poor.

He may be remembered for urging every Holland lawyer to spend 50 hours a week on company-related business, personal life notwithstanding.

Or he could be pegged for eternity as the man whose handling of a sexual-harassment controversy in Tampa put the firm's reputation in doubt. In March, Melton appointed Tampa partner Douglas A. Wright, 44, to be the firm's No. 3 executive, months after Wright had been reprimanded for, among other things, telling young female colleagues to "feel my pipes (biceps)." Wags inside the law firm began calling it Holland & Pipes. Wright quickly resigned the post, though he remains a partner.

With three years left in Melton's five-year term, and a second term possible, his legacy at the country's 11th-largest law firm remains on hold.

So do forecasts of his imminent demise. The passage of time and an apology Melton e-mailed last month to all 2,800 Holland staff have mellowed internal dissent, as have reports that all staff will be invited to attend diversity training. Many are tired of bad press and eager to resume their work.

For his part, Melton refuses to be defined by the incident. He has declined all interview requests since the Tampa blowup. For this article, he issued a relentlessly positive statement, selectively answered questions e-mailed to a Holland spokeswoman, and attached a catalog of Holland's achievements during his reign.

"We are in the midst of a transformation from which Holland & Knight will emerge as an even stronger national law firm," he wrote. "While we have accomplished many other things in which we take great pride, I truly believe that our best days are still ahead of us."

Among the accomplishments of which Melton is proudest: having more minority partners than any other U.S. law firm (according to Minority Law Journal ), the largest number of active bankruptcy cases (according to The Deal ), the most aviation and maritime experts (Legal Media Group), andone of the most popular litigation practices among Fortune 250 companies (Corporate Counsel ).

Melton's ascent to the top at Holland was anything but certain.

As predecessor Feagin's temporary stint came to an end in early 2003, lawyers in the firm's newer offices such as New York and Chicago clamored for a non-Florida chief, someone who could speak for them while proving Holland's global pretensions.

Melton, who joined Holland right out of law school and served more than a decade as executive partner of its Orlando office, didn't fit the "outsider" bill. His toughest opponent, Tallahassee lobbyist Martha Barnett, was a Floridian, too, though she had a national standing as past president of the American Bar Association.

But Melton could claim membership in either Holland clique.

He is about as old-school Holland & Knight as they come. As an associate in Lakeland, he worked down the hall from the legendary Smith. Like his three predecessors, he earned his law degree at the University of Florida law school, graduating in 1975 with McBride; his 24-year-old son is studying there now. Melton was president of Feagin's old fraternity, Phi Delta Theta. His father is a federal judge in Jacksonville.

Still, Melton has spent significant chunks of time in New York, Chicago and California on case work, and he splits his time between New York and Orlando. He has an impressive book of national clients, including Time Warner, Viacom and the Tribune Co.

The day before the vote, however, his main competition retreated: Barnett dropped out, deciding instead to pursue chairmanship of the firm's directors' committee.

What may have put Melton over the top was a lucrative legal victory on behalf of biotech client Amgen.

Amgen was tiny and cash-strapped in 1985 when it made a deal with a Johnson & Johnson subsidiary: Help us finance our new anemia treatment, Amgen said, and we'll license you to sell it to chemotherapy patients. The drug became a blockbuster, with annual sales in the billions of dollars. The two companies have warred over turf ever since.

In 2001, Amgen accused the Johnson & Johnson unit of selling to dialysis patients, a market Amgen had saved for itself. Amgen asked a private arbitrator to sever the license and award it $1.2-billion in damages. Though Holland was not lead counsel on the case, as many as 150 Holland lawyers worked on it, traveling around the country to take depositions, read background memos and prepare briefs. Hal Melton led the team.

"He was not the primary counsel in the case, but he was very important to it and made a genuine contibution," said Frank McGarr, a retired federal judge who presided over the case. "I have a great deal of respect for him. I watched him work and he's one hell of a lawyer."

Melton came to the decisive partners' meeting fresh off a huge victory. His client Amgen had been awarded $150-million in penalties, as well as legal expenses. A large but undisclosed chunk of the latter was destined for Holland.

After his election, Melton set several top goals.

One was to restore the firm's reputation as a generous provider of pro bono legal help. To rally the troops, Melton issued a stern memo on the subject. He also began compensating lawyers for such work.

Melton said his efforts have resulted in pro bono hours per lawyer rising an average of 40 percent over the past two years.

"We are continuing to see positive momentum and growth while also preserving our core values - diversity, inclusiveness and collegiality - those things that make Holland & Knight a special place," he wrote.

Melton also pledged to significantly expand Holland's headcount. Rather than add new offices, he wanted to bolster existing ones, especially on the West Coast. Big cities would have large, multipractice staffs to match: Seattle, for example, would grow tenfold to about 150 lawyers. San Francisco would quintuple to 130. Portland would triple to 50. "It's what (Melton) calls "smart growth,' or strategic growth," spokeswoman Karen Schoening said.

But so far, the West Coast offices remain small. Firmwide, Holland has added just 14 lawyers since Melton was elected.

"It doesn't mean that they're not looking at any (acquisition) opportunities," Schoening said. "It (just) hasn't happened yet."

Holland officials have long said the firm's dismal profits-per-partner ranking is a reflection of its presence in many lower-cost geographic markets, and therefore is not a concern. But raising its rank - 97th among the country's 100 largest law firms, according to American Lawyer - is a top goal of Melton's.

One solution has been to squeeze out underperforming partners, many of them older lawyers billing fewer hours. They are given the option of surrendering their percentage share of profits - a process called de-equitization - or retiring. "He's been focused on expenses, revenues, every aspect of business operations to improve profitability," Schoening said. "It's way oversimplifying to say that any one thing he's doing would be the answer."

Profitability also is the driving force behind Melton's so-called 2,500-hour rule, an initiative that, except for the sexual-harassment scandal in Tampa, is probably his most controversial to date.

Until late last year, Holland lawyers were expected to bill at least 1,900 hours per year, and partners 1,750. They were supposed to record an additional 300 hours of community or professional work, from Bar association functions to Girl Scout meetings.

In an e-mail to the staff last fall, Melton toughened the old system. Though billable-hour minimums would stay the same, each lawyer would be expected to record 2,500 hours of billable and nonbillable work per year, combined. For the typical partner, it would mean recording 15 hours of nonbillable activity a week.

The list of qualifying activities was expansive, from work with community groups like the Rotary Club or the Junior League, to professional development and the marketing of Holland's services.

Holland officials downplay the significance of the change. Melton said there would be "no direct tie" between lawyers' total hours and their compensation. Schoening said the requirement was comparable to that of Holland's national peers.

Robin Main, a Providence lawyer who chairs the firm's Women's Initiative, agreed.

"The 2,500-hour rule is really a memorialization of the investment that Holland & Knight expects its attorneys to invest in the firm and our community," she said. "I don't think it has fazed people a lot, other than that you have to keep more records."

Besides, Main added, women and men alike can temporarily exit the fast track by taking advantage of the firm's Balanced Work/Life program, a reduced-hours, reduced-salary program also introduced during Melton's tenure.

But some rank-and-file lawyers at the firm, none of whom would speak on the record, worry they will have to sacrifice their personal lives in order to keep pace. In a profession where the dropout rate is far higher among women than men, the threat to working mothers seems grave. Single lawyers, too, worry they will not have time to date.

"I think it's asking a lot," said Tom Snow, president and chief executive of Carlton Fields, the Tampa Bay area's third-largest law firm (Holland is No. 2). Carlton's lawyers are expected to record 2,100 billable and nonbillable hours per year, in total.

Fowler White, the area's largest firm, doesn't have fixed minimums, though it does reward lawyers who exceed the norm in billable or nonbillable hours. "We want people to be involved with the community, but we want it to be something that fulfills them," president Rhea Law said. "We don't dictate what you have to do."

--Times staff researchers Kitty Bennett and Carolyn Edds contributed to this report.

[Last modified May 24, 2005, 06:18:49]