Ken Jacobs, Managing Shareholder – Jacksonville, Gray Robinson PA

As the legal industry further transitions to digital, AI will play an increasing role in the sector, according to Ken Jacobs, managing shareholder in Jacksonville at Gray Robinson PA. “AI’s impact will be significant, necessitating attorneys’ proficiency in adapting to this technology,” he told Invest:. “Professionals with expertise in AI will be in high demand, as it has the potential to transform the legal landscape.”

What have been the main highlights and achievements of Gray Robinson in the past year?

My expertise lies in commercial loan workouts, bankruptcy reorganizations, and commercial litigation, which has seen a significant increase. Post-COVID, many companies have reduced their office space footprints and adopted hoteling arrangements for their employees, resulting in decreased occupancy rates. However, the looming concern is the potential wave of defaults on multifamily apartments, condominiums, and other similar properties. In the next five years, half of all current multifamily loans will mature, and higher interest rates will make refinancing them challenging. We are already witnessing increased loan defaults in the multifamily sector, such as a recent case I handled involving a 241-apartment complex that went into foreclosure and eventually led to the appointment of a receiver to manage the property. Chapter 11 filings are also increasing, particularly in industries such as trucking and logistics that over-expanded during the pandemic.

In which areas or industries are you seeing the most potential growth?

In the post-pandemic era, loans experienced exceptionally low default rates, resulting in minimal activity in loan workouts with banks and financial institutions. However, there has been a shift in lending standards, making it more restrictive and challenging to refinance loans. Interest rates and construction costs have also skyrocketed, further impacting the landscape of financial services. Healthcare also emerged as a rapidly growing industry, primarily due to the aging population, including baby boomers, who now require additional healthcare services. Jacksonville has witnessed significant growth in healthcare providers, such as Baptist Health, Mayo Clinic, and other hospitals and practice groups, driven by the increasing demand. 

What other trends do you see in the legal and advisory sector?

Throughout the pandemic, courts have increasingly utilized electronic media for mediations, hearings and various other proceedings. This trend has continued beyond the pandemic’s peak, with Zoom hearings remaining common. Judges find remote hearings convenient, and they allow attorneys to easily participate in multiple proceedings across various locations within the state. In-person proceedings, such as trials involving witnesses and evidence, have resumed, but a significant number of hearings, particularly those involving legal arguments before a judge, are now conducted electronically. This shift represents a substantial legacy of the COVID-19 era.

In what other ways might the shift to digital impact the legal industry?

The shift to electronic processes in the legal field, such as electronic court filings, document storage and the use of electronic signatures for pleadings and contracts, is driving an increased need for AI adoption. On the litigation front, AI can assist in discovery, searchable keyword identification, and pleadings construction. Similarly, in transactional law, AI can aid in document creation for various transactions. Over the next three to five years, AI’s impact will be significant, necessitating attorneys’ proficiency in adapting to this technology. Professionals with expertise in AI will be in high demand, as it has the potential to transform the legal landscape.

What sets you apart from the competition?

Gray Robinson boasts a statewide reach as the largest law firm focused on Florida, consisting of nearly 300 lawyers. With offices in 13 diverse markets, we cater to clients anywhere within the state. Unlike national firms with offices scattered across the country, Gray Robinson actively engages in local politics in each region, and state-level politics in Tallahassee. We consistently rank among the Top 3 in lobbying revenue within state politics and we have specialists in virtually every office who handle local government matters. The nexus of our services lies in assisting businesses with both their legal and political needs from a lobbying perspective.

Gray Robinson stands out in its practice approach, embracing an entrepreneurial spirit. We operate as a small firm with a large team of lawyers. Unlike typical firms with hierarchical structures, we do not have layers upon layers of attorneys on each matter, such as junior associates, senior associates, junior partners, and senior partners. At Gray Robinson, each partner directly manages client relationships and their specific needs. We employ associates for efficient handling of routine matters, but our unique inverse pyramid structure ensures that clients interact directly with the partner responsible for their matters.

Are there any other plans for expansion, within the state or to other states in the country?

Our primary focus has been on Florida, but we recently established our Washington, D.C., office for lobbying purposes. While we have no immediate plans to expand our full range of services nationwide, we recognized that many of our clients with state lobbying needs also required representation in Washington, D.C. Remaining steadfast in our commitment to Florida, our goal is to be the preeminent, most well-connected law firm in the state. Florida is one of the most coveted markets for law firms due to its significant growth in population, business opportunities, and relocation of companies from California and the Northeast to cities like Jacksonville. This remarkable growth has spurred a surge in demand for legal services, creating a favorable business environment for law firms.

What are the biggest challenges for Gray Robinson and the legal industry at the moment? 

One of the issues that lawyers are having, particularly in services that are more cookie-cutter and routine, is that there has been a tremendous compression on rates and fees imposed by large companies. Competitive bidding processes among multiple law firms often result in the selection of the lowest rates, but not necessarily the best service. This rate-conscious approach treats legal services as a commodity rather than valuing the relationship with an attorney who can provide personalized assistance.

The other challenge is that many large companies, especially financial institutions, are taking more and more work in-house. These companies are hiring general counsel and building law firms within their organizations to handle a majority of their legal needs. As a result, law firms may be bypassed for routine legal matters, only being engaged when court appearances are necessary. The use of artificial intelligence and technology has facilitated this shift toward in-house legal services.

Do you see a challenge in the labor workforce and talent availability?

In the wake of the pandemic, there has been a notable increase in wages. While inflation for goods has risen by over 20% in the past three and a half years, wages have also experienced significant growth, albeit not at the same pace. This has resulted in competitive markets for attracting top-notch legal talent. Law firms compete with other firms and in-house legal departments to attract and retain this talent. As a result, if law firms continue to offer higher salaries, individuals may seek to increase their own compensation through transitions to different firms or organizations.