Archive for January, 2009|Monthly archive page

Holland & Knight loses 3 lawyers after internal sexual harassment probe.

In 1 on January 30, 2009 at 6:52 pm

By: Scott Barancik
Three more lawyers are leaving Holland & Knight’s Tampa office,
bringing its net loss to 10 percent since an internal struggle over
sexual harassment allegations came to light in late March.
Richard M. Blau, an expert on alcohol law, is leaving Holland &
Knight’s Tampa office to join a rival firm. He’s taking 14 members of
his national team with him, including Tampa partner Elizabeth A.
DeConti and Tampa associate Grace H. Yang.
Yang, along with eight other Tampa lawyers, last year requested an
internal investigation of Holland partner Douglas A. Wright over
alleged sexual harassment. But Blau insisted newspaper coverage of
Wright’s …

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Whither Holland & Knight?

In 1 on January 30, 2009 at 6:41 pm

Democratic gubernatorial candidate Bill McBride, the former managing
partner of Holland & Knight, took the microphone last month at a
campaign rally in front of a rustic bed-and-breakfast in New Smyrna
“I’m the only person in this campaign who’s run a business,” he said
in his soft Central Florida drawl to about 150 senior citizens
standing on the lawn. “And I ran a pretty good one. … The way you
create great states is the way you create great companies or great
organizations. You make sure everyone has a seat at the table.”
Maybe. But the talk around that table that he left last June has taken
a contentious turn.
Holland & Knight, Florida’s largest law firm and one of the largest in
the nation, is facing serious financial challenges. McBride led the
firm with a strong hand from 1992 to 2001, engineered its expansion
from 275 lawyers to more than 1,275 and carried the banner for its
socially conscious policies. Now, some current and former Holland
lawyers, as well as outside observers, are saying that the
organization McBride steered to national prominence has arrived at a
critical juncture.
A Jan. 21 memo from a Holland partner to Robert R. Feagin III,
McBride’s successor as managing partner, charged that the law firm
made an error by emphasizing expansion over profitability. The memo,
written by Martin J. Jaron Jr., a partner based in McLean, Va.,
predicted that many partners would jump ship within weeks — sending
the firm toward possible “demise” — unless management increased
profits and pay by cutting jobs and programs and shrinking the firm in
“Our reduced profitability is the source of the intense and negative
reaction you have been seeing from partners over the past weeks,”
wrote Jaron, 51, a litigator whom McBride hired in 1998. He said that
a Jan. 17 memo from Feagin to the partners did not “show an
appreciation for the actual source of the problems.”
“… As the firm’s financial situation has gone from bad to worse over
the past two years — and especially in the past four months … partner
confidence in the firm’s expansion-driven model, direction, and
management is low and cynicism about the future of the firm is high. …
Moreover, the firm has unrest among equity partners and general
concern about the survival of the firm at all employee levels.”
Holland’s management seemed to agree with Jaron’s drastic cost-cutting
prescriptions. In recent weeks, the firm has taken dramatic steps to
control costs. Its most visible move, though ostensibly temporary, was
to suspend annual pay increases for associates and to reduce expected
bonuses. People who completed a year as fourth-year associates, for
instance, didn’t get bumped up a step to fifth-year pay, and so on.
That freeze represents a pay cut of $10,000 or more for senior
In addition, firm managers say they’re planning an overhaul of the
firm’s entire associate compensation program. The target date for
completion of that overhaul is June 1.
Jaron’s confidential memo, obtained by the Daily Business Review,
contended that the law firm is burdened with too many offices,
overpaid associates, underproductive veteran partners and excessive
pro bono expenses. Many Holland partners now earn less than
associates, Jaron complained to Feagin. “That is an outrage,” Jaron
wrote. “We are in trouble. These and other poor management practices
have placed the firm in peril.”
Feagin had invited the input. Jaron’s 14-page memo was written in
response to a series of requests by Feagin over the previous two
months to the firm’s 730 partners for input. Feagin says the requests
elicited about 85 responses.
While Jaron is just one of 1,279 lawyers at Holland, his memo echoes
broader concerns within the ranks about the financial health and
mission of the firm, whose roots trace back to the Tampa law practice
of Peter O. Knight in 1889.
In interviews with about two dozen current and former Holland
partners, legal consultants and outside attorneys — few of whom were
willing to comment for attribution — what emerged was a picture of a
firm engaged in a passionate internal debate. The struggle is over how
to preserve the firm’s identity as a organization committed to
charitable causes and social justice while significantly boosting
“It’s a fight between the eat-what-you-kill guys and the guys who care
as much about pro bono as they do about making more money,” says one
longtime partner who requested anonymity.
In an interview, Feagin downplayed Jaron’s gloomy predictions. “I am
not fearful of the kinds of defections from Holland & Knight that you
heard about,” he said, adding that 2002 could be the firm’s best year
ever, with billings and collections already showing significant
improvement over last year.
Still, the question of how deeply to cut costs played a central role
in the elections this month at the firm’s annual partners meeting in
Orlando. Eight of the 24 Director’s Committee seats were up for grabs.
Roughly half — the firm would not confirm this — went to candidates
known to favor aggressive cost-cutting, known jocularly inside the
firm as the Taliban.
Feagin insists he isn’t worried. He gauged the mood at the Orlando
partners meeting, he says, and found the attorneys’ commitment to the
firm remained strong. Their confidence, he said, “reflects the
strength in our firm right now and the prospects we have for continued
He expressed optimism about the firm’s future. “I am committing to my
owners that I am going to give maximum effort to improving owner
profitability,” Feagin said. “I would like us to be at the top of the
Holland is hardly the only law firm feeling the chill of the economic
recession and the dot-com debacle, along with the post-Sept. 11
trauma. Around the country, many firms are dumping lawyers, freezing
pay and rolling back costs.
But at Holland, there appears to be considerable internal dissent —
with part of the unhappiness directed at Feagin, who served as
chairman for 10 years before being named managing partner last June.
There’s also a lot of implied criticism of the previous managing
partner, a dominant figure who left Holland in June to try to unseat
Gov. Jeb Bush this November. McBride makes his case as the future
leader of the state partly on the claim that he successfully led a
large business.
Though still an underdog in his challenge to former U.S. Attorney
General Janet Reno for the Democratic nomination, McBride is outpacing
her in fund raising.
McBride, 56, a former Marine captain and decorated Vietnam veteran who
grew up in Leesburg, joined Holland in 1975 as a protege of
then-managing partner Chesterfield Smith, and took over as the firm’s
chief executive in 1992. Following his vision of taking the Florida
firm national, the firm grew from 10 offices, eight of them in
Florida, to 32 offices in 11 states, the District of Columbia and
seven foreign countries.
All the while, critics derided Holland as “McFirm,” harping that the
growth didn’t make the firm a major national player and that its
partners made dramatically less money as a result of the expansion.
But McBride burnished Holland’s image as a good corporate citizen. The
firm was a leader in providing spousal benefits to gays and lesbians
and establishing a “living wage” for its janitorial and mailroom
workers. Three years ago, Bill Clinton presented McBride as a featured
speaker at a national civil rights conference at the White House.
Both McBride and Feagin long have been advocates for the progressive
social vision of Chesterfield Smith, the former managing partner and
American Bar Association president and a 52-year veteran of the firm.
At age 84, Smith still maintains an active presence as a senior
partner in the firm’s Miami office. But keeping elderly partners like
Smith on the Holland payroll comes in for strong criticism in Jaron’s
Holland is known within the legal community as a firm willing to
accept somewhat lower profits to enable its lawyers to take on unpaid
work that benefits the underprivileged.
“If you want to maximize your income in a law practice, you probably
would go somewhere else,” says Ward Bower, a principal at Altman Weil
Inc. in Philadelphia, a consulting firm that lists Holland & Knight
among its clients.
Despite Holland’s phenomenal growth, its profits per partner put it in
the bottom tier of the nation’s largest firms, according to the Am Law
100 rankings for fiscal year 2000, published by American Lawyer
magazine last July.
While ranking as the country’s 27th largest law firm in gross
revenues, Holland’s $395,000 in profits per equity partner puts it in
the bottom 11 percent on that list. Compensation per partner, equity
and nonequity partners combined, averaged $290,000 at Holland — 98th
out of 100 firms.
By comparison, Miami-based Greenberg Traurig, another fast-growing
firm, ranked 61st in profits per equity partner, at $635,000, and 64th
in compensation per partner, at $500,000.
According to figures that Jaron’s memo attributed to Feagin, Holland
earned $157 million in profits last year, on collections of $466
million and expenses of $309 million. That’s a 34 percent profit
margin — not great, but not terrible, by law firm standards. “A little
weak,” says legal consultant Peter D. Zeughauser, principal of
ClientFocus in Newport Beach, Calif.
Last year, according to one longtime partner, equity partners at
Holland took a pay cut of 10 percent to 12 percent. And, if Jaron’s
memo is correct, the firm engaged in its long-standing practice of
borrowing from current-year revenue to pay even that reduced amount.
The practice, known at the firm as “the push,” is neither unethical
nor uncommon, but it is sometimes seen as a sign of financial
“Horrendous” is how the managing partner of one Miami firm describes
the practice of paying partners out of current revenues. In his view,
it could indicate that “you’re living beyond your means and your
business model isn’t working. It has to come home to roost at some
Other lawyers and law firm consultants are less critical. They see
such borrowing as a matter of practicality for firms that might have
strong earnings but not a lot of cash on hand at the start of a year.
For his part, Feagin says that “we’re mindful of the need to restrain
[borrowing], and we do.”
One reason Holland’s profits weren’t great was that throughout the
’90s, McBride led the firm in a strategy of rapid expansion by
acquiring smaller firms and opening offices around the country. That
carried big costs and diluted per partner profits, in anticipation of
future financial growth.
Multiple-office firms spend more per lawyer than smaller firms, due to
replication of functions, says Altman Weil’s Bower. They have more
receptionists, libraries and waiting areas.
But Feagin insists that the extra costs associated with expansion are
worth it. “You have to invest in growth to make it happen,” he says.
“We believe that growth is going to provide partners of the firm a
return in terms of increased profits going forward.” On the other
hand, he says, “the expenses we have incurred in connection with that
growth are under constant examination.”
He vows that the firm will continue to build its national platform.
“We’re well on our way to completing and filling out that plan and,
yes, it is working,” he says. “More and more of our clients are served
by a wider range of lawyers out of more offices, representing more
practice areas than ever before.”
One of the major reasons to establish a national presence is to
attract national companies which need a law firm which can provide the
appropriate legal skills wherever they are needed. But it’s not easy
to quickly move up the scale of corporate clients to the Fortune 500
or Fortune 150 companies targeted by Holland, experts say.
The managing partner of a prominent Miami law firm, who did not want
to be identified, says Holland’s strategy of developing a Fortune 500
client list was misguided. Two-thirds of those corporations are locked
in with New York lawyers, or with law partners the corporate
executives went to school with, says this attorney. “You can open a
New York office and stand on your head until you’re blue in the face
and never get in,” he explains.
Meanwhile, Holland faces growing competition for the mid-range
corporate work on which it has relied, this managing partner says. By
mid-range work, he means legal work that comes, for example, from a
banking lawyer’s relationship with a mid-level bank loan officer
rather than with the bank’s CEO. With competition increasing for these
price-sensitive clients, there’s a temptation to accept
less-creditworthy clients. That can lead to accounts receivable
problems, the lawyer says. “It’s a dangerous slope.”
Radical cost-cutting urged
In his memo, Jaron criticized Holland management’s financial
turnaround plan for focusing excessively on improving efficiency, for
instance using more knowledge management, and for relying on outside
consultants. “Follow that plan and the firm will be history and a maze
of creditor claims and lawsuits in two years,” he warned.
Instead, he outlined a radical series of cost-cutting measures. He
described himself as qualified to make such recommendations — even
though he wasn’t privy to full management data — based on his seven
years of previous experience as assistant manager of a Virginia county
with 6,000 employees and an operating budget of nearly $1 billion.
Among the changes he urged:
• “Right-size” the firm by eliminating attorneys and offices. Jaron
suggested that the firm has 200 more attorneys than it has work for.
• Reconsider the national strategy. “We don’t seem to be attracting
many [large national] clients. … [W]e need to ask ourselves whether
the basic model is flawed.”
• Freeze hiring. Entry-level recruiting should be slashed this year,
if not eliminated, and the firm should consider rescinding or delaying
job offers extended last summer, he said.
• Stop allowing associates to apply pro bono work as credit toward
bonuses for billable hours. “We have institutionalized and rewarded
moderate productivity for associates with higher compensation and have
reduced compensation for many highly productive partners to pay those
associates,” he wrote.
• Consider mandatory retirement. Holland has too many Class A, older
partners who do not bill, yet receive “significant compensation,” he
wrote. If they’re doing nonlegal tasks, then those tasks might be
handed to less expensive, nonlawyer professionals, he added.
• Take a hard look at Holland’s ancillary consulting business, H&K Consulting.
• Reduce secretarial support.
• “Drastically” reduce or eliminate support for pro bono work,
including the firm’s full-time Community Services Team. But pro bono
work by individual lawyers should continue to be encouraged.
• Restrict the managing partner’s unilateral authority for spending
and borrowing decisions over $500,000 dollars. “No single person,
including the managing partner, should have the authority to incur
that obligation for the firm without board approval,” Jaron wrote.
• Use more conservative revenue forecasts in budgeting.
• Share more financial data with partners, rather than just summary
budget information.
Jaron concluded on a slightly more optimistic note, by jokingly
quoting comedienne Lily Tomlin: “Things are going to get a lot worse
before they get worse. All kidding aside, I don’t think that is true
in our case.”
In response to requests from the Daily Business Review for comment,
Jaron faxed a letter on March 5 retracting some of his statements in
the memo and denying permission to publish any part of the memo on the
grounds that it was proprietary to Holland & Knight. He wrote that he
had learned since Jan. 21 that management “was engaged in initiatives
on many fronts.” He said he now believes that the firm has “a strong
plan in place for continued success.”
Indeed, Holland recently has embarked on some major cost reductions.
But its new curbs on associate pay increases and its planned
compensation review come two years after the firm adopted policies
that sharply hiked costs.
Like other large Florida firms, Holland jumped onto the nationwide
associate pay hike bandwagon in 1999, raising first-year pay to about
$100,000. In late 2000, with considerable fanfare, Holland instituted
a living wage policy for support staff. It boosted hourly pay for
janitorial, filing and mailroom employees across the country by as
much as 50 percent, from $8 to $12.
Responding to Review questions about cost-cutting, Feagin says the
firm is considering “all the things you would normally review in
connection with your business plan and practices.” He declined to
speculate about what actions the firm might take as far as job cuts
and other options. According to one source, the firm already has a
“right-sizing task force” hard at work, consulting with practice area
heads and considering individuals’ performance.
Pay cutbacks for attorneys, however, do carry risks, experts say. With
the associate pay freeze, which disproportionately hurts senior
associates, Holland risks losing some of its most experienced young
lawyers. But if it doesn’t cut costs, it risks losing equity partners,
who sources say are impatient with the flat revenues and relatively
low profit margins.
One type of cost-cutting Feagin seems to rule out, however, is
reducing compensation to partners who reach retirement age. “It’s not
on my schedule of things under serious consideration,” he says.
Pro bono culture at risk?
In his memo, Jaron warned that Holland had only weeks “to take
decisive action demonstrating that the firm has adopted clear
financial goals, understands the problems and has a serious and
credible plan in place to solve them. Much longer than that, and I
think the firm runs the risk of losing many highly productive
So far, Jaron’s prediction of mass defections hasn’t come true. The
firm has about 50 more lawyers now than a year ago. “It hasn’t
happened, and from everything I saw in Orlando, it isn’t going to
happen,” Feagin says, referring to this month’s partners meeting.
But the situation in Holland’s Orlando office shows that danger lurks
if the profit picture doesn’t improve. Over the past year, 15 out of
87 full-time lawyers in that office left for various reasons.
One of those who departed told the Review that the heavy expenses
associated with expansion and pro bono work meant longer hours and
lower quality of life for the firm’s lawyers. “It’s not that each of
us is greedy,” says the lawyer, who did not want to be identified.
“But with lower costs, you can make the same money without working as
many hours.”
But Feagin argues that a strong pro bono policy makes good business
sense for his law firm. “Clients find it appealing,” he says. “To the
extent it makes us distinguish ourselves from other firms to clients,
it damn sure generates revenue.”
More than half of Holland’s lawyers do pro bono work, including four
who are assigned full-time to pro bono projects. The firm ranked 34th
on last year’s Am Law 100 on quantity of pro bono work.
Stephen F. Hanlon, a Tallahassee-based partner who has run Holland’s
Community Services Team since its inception in 1990, says that even
that impressive ranking understates the challenging pro bono caseload
Holland has taken on.
Last year, after a 10-year effort, the firm settled a lawsuit filed in
U.S. District Court in Miami against the Florida Department of
Juvenile Justice and Department of Children & Families. The firm was
lead counsel representing 45,000 children in the foster care and
juvenile justice systems who were not receiving needed mental health
services. The class action required the state to develop a system for
providing those services.
Holland also is heavily involved in pro bono representation of
immigrant detainees in Florida, Death Row inmates in Alabama and
HIV-afflicted prisoners in Mississippi.
Still, Hanlon says he’s already overseen a partial pullback on pro
bono work because of the economic recession. The firm, which has a
goal of 50 pro bono hours per lawyer each year, went from an average
of 45 hours per lawyer in 1999 to 32 hours in 2000, and held it to 36
in 2001. “It’s prudent management,” he says.
The firm’s patriarch, Chesterfield Smith, expresses no worries about
the spirit of public service continuing at Holland & Knight. “Making
the justice system work for everyone is a lawyer’s responsibility,
even if it means making reasonable sacrifices,” Smith says. “Holland &
Knight has been doing that a long time. I don’t think we’ll quit.”
And speaking from the campaign trail, Bill McBride defends his
previous stewardship of the firm. The firm, he says, is following a
sound business plan that he and Feagin established before he left on
his political quest.
“The firm is really strong,” McBride says. “Holland & Knight is
positioned, as best I can tell, to have a great future.”
Tony Doris can be reached at or at (305) 347-6657.

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Agency and law firm entangled (Enterprise Florida and Holland & Knight)

In 1 on January 29, 2009 at 6:10 pm

The hiring of Enterprise Florida CEO Darrell Kelley by legal giant
Holland & Knight is the latest in a list of close, lucrative
While Darrell Kelley was chief executive of Florida’s top economic
development agency, it paid hundreds of thousands of dollars in legal
and consulting fees to the Holland & Knight law firm.
Now he’s joining the giant law firm as a top executive.
Kelley, 63, starts his job as chief operating officer at Holland &
Knight on Nov. 15. His appointment is the latest example of the close
and lucrative ties between the law firm and Enterprise Florida, a
tax-exempt, nonprofit arm of state government that received
$16.7-million in taxpayer funds last year to lure high-wage jobs to
Among the more conspicuous examples:
–Since 2001, Holland & Knight has held an open-ended, apparently
no-bid contract to serve as general counsel to Enterprise Florida at
rates as high as $425 an hour. Fees paid to date total $588,600,
according to agency spokeswoman Erin Heston. Kelley joined Enterprise
Florida in June 2002.
–In 2003, Holland & Knight won an additional $475,000 contract from
Enterprise Florida to assess the state’s vulnerability in the coming
round of military base closures. Only one other company submitted a
–This year, Holland & Knight began serving as Enterprise Florida’s
official representative in China. Though the law firm is providing its
services largely for free, the role affords it entree to the world’s
fastest-growing economy as well as many potential clients.
The ties go both ways.
Howell Melton Jr., Holland & Knight’s managing partner, sits on
Enterprise Florida’s board of directors, as did his predecessors at
the 1,250-lawyer firm. Melton also is chairman of the three-person
committee that sets salaries for agency executives like Kelley, who
earned nearly $350,000 in total compensation during the 2004-05 fiscal
This won’t be the first time Kelley has called Melton “boss.” Melton
served as chairman of the Orlando area’s economic development
commission several years ago when Kelley was the not-for-profit’s
president and chief executive officer.
On Monday, both men declined to be interviewed. But in a news release
issued by Holland & Knight after inquiries from the St. Petersburg
Times , each warmly praised the other.
Said Melton: “Darrell’s exceptional reputation for client service,
relationship building and commitment to high values make him a perfect
fit for our firm. He brings with him significant expertise in business
generation and client service, which will complement Holland &
Knight’s approach to the delivery of legal services.”
Said Kelley: “Having worked with Howell Melton as a committee chair
and member of the (Enterprise Florida board) and during his term as
Chairman of the Metro Orlando EDC, I know him to be an exceptional
leader with whom I share common values. I look forward to joining
Howell at Holland & Knight, a firm whose national platform offers many
great business opportunities.”
Kelley’s role at the law firm, one of the nation’s largest, is not
clear. Holland & Knight created the chief operating partner slot last
year for Douglas A. Wright, a Tampa lawyer who quickly resigned after
the Times reported he had been reprimanded for harassing young, female
The position, which ranked third on the firm’s corporate ladder and
put Wright atop all business operations, including the firm’s human
resources department, has remained vacant.
Kelley, a longtime Sprint Corp. executive, is not a lawyer. But thanks
to his three-year tenure at Enterprise Florida, whose board includes
executives representing many of the state’s top businesses, he has the
potential to give an already powerful firm an extra edge in securing
Under then-Gov. Lawton Chiles, the Legislature created Enterprise
Florida in 1992 as a tax-exempt partnership between the public sector
and private businesses. Today it gets 82 percent of its funding from
taxpayers. Holland & Knight has contributed more than $200,000 since
2000, assuring the law firm a seat on Enterprise Florida’s 63-member
board of directors, which is chaired by Gov. Jeb Bush.
The board approved Holland & Knight as its general counsel at a
November 2000 meeting. Other than former managing partner Bill
McBride, who abstained, the vote was unanimous. The agency is
permitted to award contracts to companies represented on its board so
long as two-thirds of the board approves.
Since then, Orlando partner Jonathan Rich and others have provided
Enterprise Florida with hundreds of hours of legal advice.
Among other things, they have advised the group on how to tailor its
lobbying activities so as not to jeopardize its tax-exempt status.
They have briefed board members on their financial disclosure
requirements. They have researched the agency’s legal obligations
under Florida’s Open Meetings Law. And they have drafted or reviewed
numerous agency contracts.
Ben Wilcox, executive director of the public interest group Common
Cause Florida, said Holland & Knight’s close relationship with
Enterprise Florida raises its own ethical concerns.
“The fact that (Kelley) is moving in and out of public service and
taking a position with someone that (Enterprise Florida) had a
contractual relationship with, and now stands to personally benefit
from being employed by that law firm, is troubling,” he said.
Last week Enterprise Florida said it was negotiating with John Adams
Jr., a Laredo, Texas, economic development official, to replace
–Times computer-assisted reporting specialist Connie Humburg and
staff researcher Carolyn Edds contributed to this report.

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Holland & Knight lawyer making fool of himself and his firm in little league episode

In 1 on January 29, 2009 at 5:44 pm

This would be hard for me to believe but for some of the pieces of
work I met while coaching little league and practicing law.
From the St. Pete’s Times, Fred Grady, a lawyer at Holland & Knight in
Tampa, was coaching his son’s little league team. A spectator said
Grady hit one of the kids with a water bottle which he then denied. As
Peter Lattman of the WSJ Law Blog, my source for this post, explains,
things didn’t stop at that.
…Grady was asked to leave the premises. According to the account, a
series of e-mail exchanges followed between Grady and in which Grady
threatened legal action if he didn’t receive a letter of apology.
Grady reportedly wanted the letter sent to all parents, players and
coaches on his son’s team, and he wanted it in time for the
end-of-the-season party so he could read it aloud. Later, Grady
reportedly sent league president Monica Wooden a letter on Holland &
Knight stationery, which stated that the league officers’ actions and
accusations damaged him.
Lattman thought it strange that a letter would come out on Holland &
Knight stationery. But of course, ‘It is Holland & Knight’s policy
that firm letterhead be used only for firm business and in
representation of firm clients,’ said a firm spokeswoman. ‘In this
case, Mr. Grady complied with firm policy and followed proper
procedures. Holland & Knight has been engaged in this matter. As such,
we cannot further comment on a pending matter.’
Grady and the law firm ought to see the favorable impressions they’re
making on what I am sure is the most widely read blog by America’s
in-house counsel. From one commentator already:
As for this “attorney” being “damaged”, one hopes that his trousers
weren’t “damaged”. Then this little league would surely be bankrupted
by the mighty Holland & Knight! In any case, I think I will cross
Holland & Knight off of my list of candidate law firms for our
corporate work.

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Bill padding, and lots of it

In 1 on January 29, 2009 at 1:08 pm

Two-thirds of lawyers queried in a new survey say they’ve seen specific instances of bill padding, a figure that hasn’t changed much since 1995. On two related questions, the numbers are actually getting worse, as Nathan Koppel notes at the WSJ Law Blog (May 1): “54.6% of the respondents (as compared with 40.3% in 1995) admitted that they had sometimes performed unnecessary tasks just to bump up their billable output”, and “the percentage of attorneys who admitted that they had double billed rose from 23% in 1996 to 34.7% in 2007. And only 51.8% regarded the practice as unethical in 2007, as compared with 64.7% in 1995,” although most ethical authorities not surprisingly frown on that practice. Ted has some further thoughts at Point of Law; the study data, gathered by Cumberland/Sanford lawprof William Ross, is here (PDF).

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Billing issues in a copyright matter of Holland & Knight

In 1 on January 28, 2009 at 10:12 pm

Further to an earlier IPBiz post on Holland & Knight, a reader pointed to a link concerning billing issues in a copyright case.

The link is to an article by Nathan Koppel of the Wall Street Journal, reproduced in the Pittsburgh Gazette, and concerns charges made by Matthew Farmer, once a junior partner in the Chicago law offices of Holland & Knight LLP.

The article includes the text:

After the trial, Mr. Farmer reviewed the firm's bills. The first invoice struck him as odd, he says. It claimed he worked 6.5 hours on Aug. 7, 2002, the day he learned of the suit. Mr. Farmer says he distinctly recalls hearing about the case late that day and spending only 15 minutes on it.


In one instance, Mr. Farmer says, Mr. Ryan sent a bill to Pinnacle claiming that partner Scott Petersen had worked 89.8 hours over a 17-day period in March 2003. Mr. Farmer says internal firm records show the lawyer didn't work on the case at all during that time.

The article also includes the text:

It's difficult to know how widespread billing fraud is, but Stephen Gillers, an ethics professor at New York University School of Law, says "there is a general consensus that billing fraud has increased" as law firms seek to increase profits and attract top lawyers.

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This Week in Layoffs – 1/23/09

In 1 on January 28, 2009 at 9:57 pm

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Lawyers From Holland & Knight LLP Join Morris, Manning & Martin, LLP

In 1 on January 28, 2009 at 9:51 pm
Download now or preview on posterous

morris.pdf (20 KB)

A former partner and a former senior counsel of Holland & Knight's Atlanta office have joined Morris, Manning & Martin, LLP. James “Mac” Hunter joined Morris Manning & Martin as a partner and Jason P. Wright will be of counsel; Bruce Strothers will be a contract associate. A senior paralegal of Holland & Knight, Claudette Grooms, also joined them at Morris Manning & Martin.

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Holland & Knight Committee for Effective Government

In 1 on January 28, 2009 at 9:49 pm
Tea Leaves, at the Federal Election Commission

     Last year the Federal Election Commission heard from Holland and Knight, a limited liability law partnership organized under Florida law, that asked whether, having elected tax treatment as a corporation under federal tax law, it could operate its political committee as a corporate PAC and pay without limit for its PAC administrative expenses.  The Commission could not then come up with the four votes needed for a decision. 

     In July, the new Commission did decide the case.  It voted, 5-1, that state law, not federal tax law, controlled, and that Holland Knight was not a corporation, and its political committee not a corporate PAC, for federal campaign finance purposes.  Under Florida law, the firm remained a partnership, though it is taxed as a corporation in states other than Florida and Massachusetts.

     Now few may care—the regulatory status quo was preserved.  It is interesting to note, however, that for this new Commission, the choice before it was one between a formalistic and a functional reading:  between focusing on state law, which it has been generally the agency’s practice to do, and considering the actual character of the entity before it.  The Commission chose the formalistic reading.

     On the more functional reading, and as the General Counsel noted in one of the alternative drafts, the law firm was in its essential features like a corporation, "putting itself in a position ‘to accumulate capital at the corporate level, … to take advantage of favorable tax treatment of corporate losses and dividends received’", and to extend limited liability protection to its owners.  OGC Draft, Alternative B, at 4.  The Commission has previously taken factors such as these into account in promulgating rules to treat limited liability companies (LLCs) as either corporations or partners, depending on the entity’s election of federal tax treatment.  11 C.F.R. § 110.1(g)(2)-(3).

     In the case of LLPs such as Holland and Knight, the Commission has now chosen to stay with the formalistic reading, based on how the firm was organized under state law.  Since the Holland and Knight PAC is therefore not a corporate PAC of a "connected" corporate sponsor, the firm can contribute to its PAC, up to the lawful limits ($5,000 per calendar year), but it cannot provide unlimited funding for PAC operations.  But restricted in one way, it is liberated in another:  unlike a corporation or its PAC, a "non-connected" PAC can solicit whomever it pleases for contributions to its PAC.

     But, of course, the Holland and Knight political committee is "connected" to the partnership:  it has been named "The Holland and Knight Committee for Effective Government."  It has been established to carry out the political program, and to effectuate the political will, of the firm.  The firm, electing corporate tax treatment, presents as a corporation—"in effect ‘telling the IRS that its organizational structure and functions are more akin to a corporation than a partnership’", OGC Draft, Alternative B at 3.

     The Holland and Knight Committee for Effective Government is not, however, a corporate PAC.  This new Commission approved this result by a decisive margin.  These are not much in the way of tea leaves, but some will read into them what they will.

Bob Bauer  Source

Posted via email from HKLaw Investigation

Seven Leave Holland & Knight

In 1 on January 28, 2009 at 12:31 pm

By Debra Cassens Weiss Source

Seven lawyers at Holland & Knight have announced they are leaving the firm’s Miami office to start their own boutique firm.

Six of the lawyers are partners, the Daily Business Review reports. The publication says the partner departure is the largest since the firm experienced financial problems several years ago. The firm took several steps to get back on good financial footing, by downsizing, cutting expenses and reconsidering its extensive pro bono work.

"I don't think money was the driving force for [the six partners leaving] at all,” said partner Jose Sirven, who will replace departing partner Alcides Avila as head of the firm’s banking and finance group.

Other departing partners had expertise in immigration; finance; and international banking, litigation and arbitration.

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