Holland & Knight Tries Success Fees, Considers Ousting Unproductive Partners

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Holland & Knight Tries Success Fees, Considers Ousting Unproductive Partners

Posted Jul 16, 2008, 10:44 am CDT
By Debra Cassens Weiss

The new managing partner of Holland & Knight is making some changes. Some clients may be pleased but unproductive partners may not.

The firm’s new managing partner, Steven Sonberg, says his primary goal is keeping the law firm on sound financial footing, the National Law Journal reports. Toward that end, he oversaw the layoffs of 70 legal secretaries and support staffers who “frankly … weren't very productive," he told the newspaper.

Now the firm is responding to client demands for lower fees and increasingly accessible partners with a couple initiatives, the article says.

The first: Holland & Knight will offer discount fees for some clients in exchange for success fees if the firm wins their cases. The firm is offering the fees in response to complaints that came mostly from midsize, entrepreneurial companies.

The other initiative concerns partner expectations.

Holland & Knight traditionally has lower profits per partner and lower associate salaries, but the tradeoff is a pleasant work environment. That environment may change as Sonberg continues a push to increase partner productivity in response to client demands for instant responses and lawyers who are always on call. Partners who can’t meet billable hour requirements may be fired, he said.

"The days of partners 50 and older playing golf on Wednesdays are long gone," he told the newspaper. "There is no tenure here."

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Posted by bob - 1 month, 1 week, 4 days, 17 hours, 25 minutes ago

Why would anybody want to work here. If I am going to kill myself working its going to be for own buisness not some overrated glamour firm. Go scoop up those too smart to have common sense law review types and work them 80 hours a week. /cracks whip/ I opt out!!
Posted by beebo - 1 month, 1 week, 4 days, 16 hours, 54 minutes ago

I agree with Bob. If there is an existing pleasant environment that is about to be ousted, they can expect high turnover. And not just from the professional staff. The support staff will feel it too and be waving ba-bye!
Posted by Older and Wiser Guy - 1 month, 1 week, 4 days, 16 hours, 46 minutes ago

Who would want to be a partner at this place any more? I suspect the same question could be asked of associates, paralegals, and everyone else there too.
Posted by Sam - 1 month, 1 week, 4 days, 16 hours, 3 minutes ago

Sounds like just another sweatshop—Who is this Sonberg and how did he become managing partner? The other posts are right. I hope H&K is ready for high turnover. But I guess that’s what they want. Well, good luck recruiting once this reputation gets going.
Posted by Einstein - 1 month, 1 week, 4 days, 16 hours, 1 minute ago

You can’t get away from this unless you work in a solo practice. Misery loves company. If there is one person that has a miserable life and stays at work 14 hours a day, he/she will speak critically of anyone else who does not do the same. It’s the same poor personal skills that have ruined their home life that also causes them to deride others at work. Rid yourself of these attorneys (no matter how much money they bring in) and you will again enjoy the practice of law.
Posted by Word Dog - 1 month, 1 week, 4 days, 15 hours, 15 minutes ago

All the comments indicating Sonberg is wrong for trimming unproductive folks are likely not partners or if they are, they must have non-equity positions. The market is demanding more of firms; those who respond will survive. And, anyone who says it is not about the money, well, it’s about the money and always has been.
Posted by charles - 1 month, 1 week, 4 days, 14 hours, 53 minutes ago

How about golf on Thursday or Friday?
Posted by Jade - 1 month, 1 week, 4 days, 13 hours, 51 minutes ago

For the money that large firms pay, they’ll always find someone willing to work in a sweatshop…
Posted by A former H&K partner - 1 month, 1 week, 4 days, 13 hours, 17 minutes ago

As a former partner who left a few years ago, I am surprised at the statements in the announcement. I could have sworn I read them the last time there was a major purge several years ago. Hours have never been less for partners and associates at H&K than at other lawfirms, nor has there been any special environment. It is a firm that grew by acquisition and has had a very high turnover since expanding beyond Florida. I think the success fees is an interesting idea however, and will be watching to see how successful it is .
Posted by No longer grunlted - 1 month, 1 week, 4 days, 12 hours, 38 minutes ago

The notion of H&K as a “more humane” large law firm has been a myth for more than a decade – and certainly since the death of Chesterfield Smith and the departure of Bill McBride.

Evidently the vaunted “no jerks” rule is also passé, as evidenced by Sonberg’s gratuitous – but characteristic – slam at a bunch of staffers who were NOT laid off because of their lack of a lack of productivity and who aren’t around to defend themselves.
Posted by Rob - 1 month, 1 week, 4 days, 12 hours, 32 minutes ago

I used to work there in the 90’s. Apparently they have had a lot of problems after Bill McBride left. I worked my butt off and don’t remember any golf on Wednesdays.
Posted by D - 1 month, 1 week, 4 days, 10 hours, 39 minutes ago

I worked at H&K for a few years. It was a great place to be when Bill was there. But the purging has been going on for the last seven years or so. They just let a bunch of folks go a few months ago too. But really, the first department they could stand to purge altogether is legislative in D.C. A bigger bunch of fat cat sycophants and waste of space has never existed.
Posted by JDB - 1 month, 1 week, 4 days, 9 hours, 29 minutes ago

I think the pinch is being felt already. I can’t get anyone at H&K to buy my Butterscotch animatronic pony.
Posted by A Tired Client - 1 month, 1 week, 4 days, 8 hours, 50 minutes ago

Word Dog is right about one thing: it IS about the money. That’s why some lawyers bill in excess of $600 PER HOUR!! Law firms like H&K and the rest of these mega-firms trade on the lack of legal sophistication by otherwise sophisticated businesses who represent the core of these large firms’ clients. Like lemmings, these big clients ,when they have a problem, immediately run to the mega-firm to assist. One day these clients will wake up and realize that when they pay these high hourly fees its not for the value of the legal expertise they are receiving...mostly they are paying for the lawyer’s view, and the private club memberships, and the expensive lawyer retreats at a resort. Quality representation is only incidental to the pursuit of as much money as they can take.

One day maybe the “sophisticated” client will rise up and refuse to hire firms like this and instead, go to smaller firms, with less overhead and less perks so that when they pay a lesser fee, they know that it is not for the fringe benefits of the lawyer but rather is for the benefit of their representation. Want to make a big firm lawyer cry out in agony? Tell’em you insist on a flat fee and you do not care how many hours they milk the representation for!

Like all pyramid schemes this one is running out of steam and maybe the collapse of the economy will wake up clients to the fact that is is “all about the money.” Until then, there is a long line of law firms virtually “laughing all the way to the bank.”
Posted by Phil NJ - 1 month, 1 week, 4 days, 8 hours, 31 minutes ago

I find it interesting that the idea of productivity is productivity in producing billiable time with NO attention paid to the value to the client.

As a long-time in-house counsel, I’ll be looking for firms that find ways to deliver value to my company - even when that decreases “billable hours”. I realize it’s difficult to change a paradigm. But, the “billable hour” has been with us only since the 1950’s. Before that, law firms did find a way to assess value to the client and bill on that basis.

Perhaps what we need is to go “back to the future.” It clearly won’t be easy, but continuing on the current path is unsustainable. Large law firms may believe they’re irreplaceable, but the matters for which that is true is limited. The law firms that survive and thrive in the new environment will be those that learn to adapt—but isn’t that what Darwin would have predicted?
Posted by An Observer - 1 month, 1 week, 4 days, 8 hours, 26 minutes ago

Why would anybody hire that firm (H&K)? What is the good of all that public relations nonsense about diversity if all it means is that they equally treat their employees like dirt so that a few at the top can become wealthy. For the head of a large multi-national law firm like Holland & Knight to stoop so low to accuse those poor underpaid staffers of being “unproductive” is an embarrassment. Can you imagine Bill Gates making such accusations against lowly staff in such a way that they were not even able to defend themselves. If this is emblematic of Holland & Knight then I can not imagine any reputable client wanting to be associated with them in any way. They are obviously just shameless. But Mr Sonnberg...after you get rid of all the “non-productive” staff, who do you then blame for the under-performance of your firm? Maybe instead of saving the firm the cost of secretarial salaries, the firm would be better off jettisoning the public relations disaster that is YOU!
Posted by A Tired Client - 1 month, 1 week, 4 days, 8 hours ago

Phil NJ is right on the money! Value to the client is not even on the radar anymore. Firms might do better to hire their own in-house litigators to go along with their in-house corporate people, in that way you know that the attorney representing you wants what is best for the company...not what is best for his law firm. Maybe the guy at Holland & Knight by his arrogant comments will cause some discussion amongst corporate clients to shift the focus from billable hours and fees to flat fees and results accomplished incentives.
Posted by associate - 1 month, 1 week, 3 days, 12 hours, 15 minutes ago

You guys are all overlooking a critical element of why big firms get hired by the hour for litigation.

As general counsel, you’ll never be in trouble for paying for a “top dollar” firm and losing a case because “you did all you could.” However, if you go with a 400/hr attorney or fixed fee billing instead of an 800/hr big firm, then “maybe you should have found someone who could have devoted more time and effort to our issues.” If you go with the cheap firm and win, then you get a “whew, I’m glad that cheap firm didn’t lose our case.”

Having worked in the corporate world before law school, I can assure you that this is EXACTLY the conversations that go on after every case. As a corporate suit, all about COVER YOUR A$$, not about trying to get the most for the company’s money.

That is why large firms will ALWAYS exist, despite whatever pipe dreams you smaller guys may have about the coming apocolypse for large firms.
Posted by john - 1 month, 1 week, 1 day, 22 hours, 59 minutes ago

Every new MP needs to establish a hold. His remarks about unproductive workers are a simple excuse. He has no idea about what occurs in various deptments, especially IT.
Clients just should expect matters to take longer and cost them more.
Posted by LINDA EVANSWOOD - 1 month, 1 week, 1 day, 3 hours, 46 minutes ago

The following are my areas of concern about the fee arrangement of a bonus for success:
1. Is the fee agreement in compliance with the Rules of Professional Responsibility?
2. Does the fee agreement conflict with Rules demand that the lawyer represent his/her client zealously?
3. Does the fee agreement cause the appearance of impropriety by suggesting that only by agreeing to a bonus for success will the client receive zealous representation?
4. Has the free agreement been approved by the State Bar as not violating any of the Rules of Professional Responsibility?

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