For Second Straight Year, Greenberg Traurig Reports Financial Declines
Greenberg Traurig reported slight declines in nearly every category led by a 1 percent dip in gross revenue last year.
The global law firm, which opened its doors in Miami five decades ago, has grown meteorically to become the 11th-largest law firm in the Am Law 200 rankings in 2013.
But this was the second year of declines for Greenberg, which attributed slides last year to its expansion into three international markets and slow recovery from the economic downturn in some markets.
In 2013, both profit per partner and gross revenue fell 0.7 of a percent. Revenue was down $8.5 million to $1.23 billion, and profit per partner dipped $10,000 to $1.35 million. Net income dropped 1.3 percent to $403 million from $409 million.
Lawyer head count dropped by nine to 1,690, including a loss of five partners.
The firm's profit margin was unchanged at 33 percent.
While Greenberg chief executive officer Richard Rosenbaum acknowledged the firm had "a flat year" in 2013, he said the numbers are misleading.
"The work performance of our corporate department was up 9 percent the last half of the year, and our real estate work was up 8 percent," he said in a telephone interview. "A lot of those receipts will not be seen until 2014."
Litigation was down 2 percent to 3 percent in the last half of 2013, he said, causing "a little bit of a drag."
Additionally, the firm invested in legal talent, adding 31 associates in 2013 compared to 23 in 2012, 49 laterals in 2013 compared to 33 in 2012, and promoted 45 associate to shareholder in 2013 compared to 19 in 2012.
The Am Law 200 attorney numbers don't reflect these gains because other lawyers departed, he said.
"Our focus is not on Am Law 200 numbers but how should we position ourselves and our lawyers to add value to our clients," Rosenbaum said. "Doing this in the current environment, well, the results probably exceeded our expectations. The firm had a good year."
Greenberg did not add any new offices in 2013 and does not plan to do so in 2014, he said.
"We are at a different phase of our evolution," he said. "We are focused more on adding quality and value than on our numbers ... on making our current offices even stronger."
Bill Brennan, a law firm consultant with Brennan Strategy LLC of Philadelphia, called 2013 a "difficult year" for Greenberg Traurig, which has traditionally excelled.
"They have been aggressively growing over the past decade or more, and expectations were higher because of their tremendous success in the past, and so 2013 was clearly a disappointing year in my opinion because they were unable to grow in aggregate terms as well as increasing their net income per partner," Brennan said. "My expectation was higher for Greenberg given their historic profitability."
Greenberg Traurig has 36 offices around the world, including locations in London, Mexico City, Warsaw and Tel Aviv.