Interview: Alan Higbee

Local expertise

Traditonally, specialty services have been sourced from larger markets. That is changing as local firms step up

Alan Higbee Managing Partner – Shutts & Bowen

Why is Tampa Bay a good location for a firm like Shutts & Bowen? A full service firm like ours has experience in many areas, including some areas that are not necessarily customary for this market, such as our experience in international trade and transactions, experience with large industrial companies and experience representing large and small federal government contractors. Interestingly, the demand for these specialty practices is actually pretty high in this market. Such specialties have often been sourced from other larger markets in the past. In our experience, businesses in this market are generally very happy to see that these specialty resources are available here to help and they don’t have to look to other markets such as Washington, D.C., or New York. For areas like federal government contractors, it makes sense to have that expertise here. I believe Florida is the third-largest market for federal contracting in the country and we are sitting outside the doors of MacDill Air Force Base, which has virtually every federal agency you can name, from all the defense agencies and divisions to the IRS.

How does the firm take part in the business brought to the Tampa Bay Area by new companies and startups? Startup businesses in the Tampa Bay area come in many varieties, but some of the most promising are often spin-offs; people who have had very successful careers in larger businesses and have decided to go out on their own. Many of these companies have a need for legal services in areas of high specialization, such as healthcare, technology and government contracting. We also see an awful lot of companies that are relocating some kind of division or business unit - or their entire U.S. operations to this market and, candidly, besides being a pretty sophisticated business center, this area is also a pretty nice place to live. In the market for legal services,

we also see an increasing need for trusted advisers. Lots of lawyers can tell you what the law is, but very few have the industry and business experience to also tell you what you probably should do and should not do.

What are the top challenges for the legal profession in the area? The tightness of the labor pool is difficult, there is no question about that. It is certainly a major challenge for us. The other challenge is the general expansion of the needs of the market. We are becoming more sophisticated. When I moved here in 1980, the needs of this legal community were really pretty basic. In 2019, the businesses in this market are extremely sophisticated and that means their problems and issues are also very sophisticated.

Jamie Lawless Executive Director, Tampa Center – Baker McKenzie

We started the location analysis with all the usual suspects, working with a well-known consulting group. We eventually reduced that list from 15 locations to two options. It was always important to us to locate our center of excellence in a top business destination, where people and talent want to be. That results in a greater ability to attract new talent. There was an undeniable connection between Baker McKenzie and the people we were meeting here, including the economic development processionals, the local authorities, the city and state and the learning institutions. There was a palpable connection that was absent elsewhere. It was then an easy choice for us.

( ) deductions are now limited, negligibly affecting firms taxed as partnerships but battering firms taxed as corporations. Finally, although corporations benefit from the much-discussed reduction in the corporate tax rate, from 35% to 21%, the personal service corporation exception means law firms are capped at a tax savings of 2%.

The Act’s impact is also being felt throughout Florida, beyond the microcosm of the legal profession. For example, an important change to the tax code under the Act has sent many ultra-wealthy individuals fleeing from states with high income taxes, such as New York and California, to take advantage of the tax shelter provided by Florida’s 0% income tax, and many are landing in Florida regions like Tampa Bay. The impetus for this exodus is the Act’s new $10,000 cap on taxpayers’ state and local taxes (SALT) deductions on their federal taxable income, beginning in the 2018 tax year. This makes Florida, with its 0% income tax and 2% property tax, an extremely attractive option for high-income residents of places like California, which has 13.3% state income tax that they can no longer deduct. However, to take advantage of Florida’s tax benefits, taxpayers must first establish permanent residence in the state, which the ultra-wealthy are accomplishing by purchasing luxury properties in some of the state’s most exclusive neighborhoods, spending at least 180 days out of the year there, obtaining a Florida driver’s license, and satisfying some additional legal requirements.

The Act also includes exciting opportunities for real estate investment in the form of Opportunity Zones, specially-designated areas designed to attract private real estate investment where it is most sorely needed by providing capital gains tax deferrals to investors. So far, most real estate firms in the Tampa area have had a great deal of interest and inquiry when it comes to Opportunity Zones, but not too much in the way of actual investment work. There is an estimated $6.1 trillion in unrealized gains languishing on balance sheets across the country, though, and if it were invested in Tampa Bay’s Opportunity Zones, the potential for lucrative investment and downstream economic impact could be enormous.

Diversity and inclusion The Florida Bar’s devotion to encouraging diversity springs from the 2004 Diversity in the Legal Profession Symposium, which seeks to develop a recommended course of action to be adhered to by the Florida Bar, law schools throughout the state, practicing lawyers, and those responsible for selecting the judiciary to ensure that the legal profession in Florida accurately reflect the makeup of society. From that symposium came the 2004 Diversity in the Legal Profession Final Report and Recommendations to the Board of Governors, which still serves as the guiding framework for the Florida Bar and everyone affiliated with the legal profession in Florida for increasing the participation, retention and representation of diverse attorneys in Florida. Since then, there have been a series of campaigns and initiatives to stimulate further diversity within the Florida legal profession, including the creation of the Committee on Diversity and Inclusion in 2010, the Florida Bar’s hiring of Arnell Bryant-Willis as diversity initiatives manager in 2011, and the hiring of Eugene Pettis as the first African-American ( )