$${{n}\brace l+m}\dbinom{l+m}{l}=\sum_{k \in \mathbb{Z}}{{k}\brace l}{{n-k}\brace m}\dbinom{n}{k}$$
LHS: gives the ways ways to partition $[n]$ into $l+m$ blocks with $l$ blocks (lets say) underlined.
RHS: lets choose the first $k$ elements and select $l$ elements from it. Then select $m$ elements from the remaining $n-k$ elements. This gives us the partitions. I'm confused about how $\dbinom{n}{k}$ will give the underlined partitions since $k$ can be greater than $l$
I think you've misstated the RHS slightly. Let's break it down:
Does that clear it up?