Full Disclosure:​

It's not over for Kirkland​

By Jaysen Sutton​
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Hi Reader šŸ‘‹šŸ½,

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Apperio, the changing legal spend landscape (report)​


Kirkland & Ellis is a law firm that makes a lot of money - in fact, more than any other in the world. Originally seen as a litigation-focussed firm, Kirkland bet on the growth of private equity, hiring partners from rival law firms and building close ties with private equity firms when the industry was relatively small.

Kirkland grew quickly in London, making a name for itself for its willingness to pay a lot of money for star partners from London-based law firms, with the backing of its US relationships and its willingness to flex its compensation (and partnership structure).

With this in mind, it was interesting to see Kirkland make the front page of the Financial Times this week. Here is what I found the most interesting:

1. Partners invested their own money into private equity deals the firm advised. It's unsurprising why this is attractive; they get access to deals they otherwise wouldn't have access to, with the promise of the huge upside associated with private equity:

Partners at Kirkland & Ellis have invested hundreds of millions of their own dollars in deals done by the private equity groups they advise, say people with knowledge of the firm.
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2. Kirkland uses its data from advising on so many private equity deals to aggressively negotiate what terms count as ā€˜marketā€™. As Matt Levine explains:

And so you can say ā€œthis term is marketā€ and they can say ā€œno it isnā€™tā€ and you can say ā€œI have negotiated 100 of these deals and this term is in every one of them, how many have you negotiated,ā€ and they will say ā€œum, four,ā€ and they will be ashamed in front of their clients. You will look wise and experienced, and they will look dumb and unreasonable. And you will win the argument. Not always or anything ā€” itā€™s not like anyone is obligated to agree to ā€œmarketā€ terms ā€” but itā€™s a fairly effective move.
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3. Kirklandā€™s challenge is whether it can retain the lawyers that have helped to shape the firmā€™s practice. Just recently, Neel Sachdev, star of Kirklandā€™s debt finance practice, left to join Paul Weiss.

What does it mean for your interviews?

Helping a private equity firm to raise a fund, buy companies, and negotiate terms to help them sell, leads to a consistent source of legal fees. And if you build deep-rooted relationships with private equity law firms, expect them to want to work for you no matter which law firm you join.

In this case, Kirkland & Ellisā€™s reputation is so long-standing, I donā€™t think theyā€™ll be going anywhere.


Have any thoughts? I'd love to hear your perspective below!

ā“Contact [email protected] with any queries.