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Holland & Knight will trim staff

Florida's largest law firm will pull out of four markets nationwide and consolidate several other offices.

By KRIS HUNDLEY
Published November 19, 2005

Holland & Knight, which has long been Florida's largest law firm and the nation's eighth biggest, will exit four markets next year, consolidating offices in three metro areas and reducing its work force by about 50 lawyers and 70 support staff members.

Among the markets targeted for consolidation is the Tampa Bay area, where Holland's offices in Bradenton and Lakeland will be closed and an office in St. Petersburg will be closed or greatly reduced in size.

The 35 lawyers and 59 support employees in the three locations will be invited to join Holland's Tampa office, a spokeswoman said. The firm's administrative office in Lakeland will not be affected.

Holland has 1,285 lawyers in 26 offices nationwide. When the reductions are complete at the end of 2006, it will be left with 18 offices in nine states and the District of Columbia. The firm said it is unclear how many lawyers will remain after consolidation, but the cuts won't necessarily jeopardize its first-place rank in Florida. Florida's No. 2, Greenberg Traurig, had 1,149 lawyers as of midyear.

In a voice mail message to Holland employees on Friday, managing partner Howell W. Melton Jr. said the cutbacks were being made to strengthen the firm's economic foundation and competitive position.

"We are now making an investment in our future, which will lead to a Holland & Knight that is even stronger financially," he said.

"Although I have no doubt that these are the right business decisions for Holland & Knight, the decisions are painful and difficult for me because of the outstanding character, quality, integrity and dedication of the lawyers and staff who will be impacted."

Melton said no more closings or consolidations are planned.

In addition to consolidations in Tampa, Holland will:

Close a two-lawyer office in Annapolis, Md., moving those lawyers to its Washington, D.C., branch.

Merge an office in suburban Oak Brook Terrace, Ill., with seven lawyers and nine staff members, into the downtown Chicago office.

Pull out of four markets: Providence, R.I.; San Antonio, Texas; Seattle; and Rancho Santa Fe, Calif. Those offices employ a total of 55 lawyers and 68 staff members.

Holland spokeswoman Karen Schoening declined to say how much the four offices slated for closing contributed to Holland's 2004 gross revenues of $551-million, saying only, "The analysis showed the offices in those markets are no longer in alignment with our strategic objectives."

Of those offices to be closed, Providence was the oldest, having opened in 1998. Schoening said it is possible that some of that group's 20 lawyers will join Holland's Boston office.

Holland opened branches in San Antonio and Seattle in 2000 and Melton, the firm's managing partner, had been particularly enthusiastic about opportunities in Seattle. In July 2004, he was boldly predicting the office would grow to more than 150 lawyers within two years, mostly through acquisitions.

The office in Rancho Santa Fe, north of San Diego, opened in January 2004 and had five lawyers. Schoening said it dealt primarily in private wealth management.

Peter Zeughauser, a consultant to legal practices around the country, said Holland's decision to pare unprofitable offices was a smart move that is becoming more prevalent in the industry.

"You give it your best and if it's not working, you close it," said Zeughauser, who said firms used to worry such retrenchment would hurt their reputations. "If you're paying attention to increasing profits per partner, it would be a good thing for them to do. You have to show you're actively managing the firm."

Zeughauser, who is based in Newport Beach, Calif., said the four markets Holland is leaving have legal fees that are below the national average.

"When you have a significant number of large companies, corporate headquarters and financial institutions, you have high-value practices," he said.

"Seattle has some of that, but not a lot. In those other markets, there's not much at all."

Nor does Zeughauser expect most of the lawyers affected by Holland's closings to have much trouble landing on their feet.

"Anybody with a book of business will find a home," he said. "If they don't have a book of business, it will be much harder."

Holland's general counsel, L. Kinder Cannon III, said the firm has 19 equity partners in the markets it is leaving. "Under the partnership agreement, we have clearly established means for (them) receiving the value of their equity interest," he said.

Holland was embroiled in controversy in the spring after it became public that the firm had promoted to chief operating officer a partner who had been reprimanded for sexual harassment. The partner, Douglas A. Wright, stepped down from that position, but remains with the firm.

The last time Holland made dramatic reductions in its work force was in May 2002, when it fired 60 lawyers and 170 staff members. Those layoffs followed a rapid expansion of 10 offices in 15 months under then-managing partner Bill McBride.

Cannon said Friday's announced cuts were different.

"In 2002, we were coming off a somewhat down year and trying to make certain we were back on track financially," he said. "This (move) is all strategic. We grew rapidly and got into some markets that turned out really beyond our need and beyond the scope of our strategic focus. To invest in those markets did not make a lot of sense."

Kris Hundley can be reached at hundley@sptimes.com or 727 892-2996.

[Last modified November 19, 2005, 01:26:04]