Law Firm Insight: Kirkland & Ellis

Jaysen

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    Kirkland & Ellis
    What makes the firm different?
    Big and profitable
    Kirkland is now the largest law firm in the world thanks to a 19% growth in revenue for 2017. The firm has expanded aggressively in recent years growing its revenue by an estimated 89% between 2009 and 2016.

    But Kirkland isn’t just big; it’s also very profitable. That makes it stand out from its rival Latham & Watkins and other large law firms. The firm doesn’t set up shop everywhere but targets a number of highly profitable geographies and practices. That's helped Kirkland to consistently grow its PEP over the last two decades. Kirkland even weathered 2008 and 2009 - a time when profits fell for many law firms- because the firm invested in countercyclical practice areas like restructuring and litigation.

    Partnership & Culture
    Kirkland’s associates make partner a lot quicker than other law firms, often after just 6PQE. In 2017, 97 lawyers became salaried partners with 13 in London. Most of these are in corporate followed by debt finance.

    Kirkland is known for paying huge amounts of money for targeted lateral hires and in many ways that has changed lateral law firm recruitment altogether. The magic circle and other US law firms have been forced to modify their lockstep model – where partners are paid according to seniority – to compete. That’s helped Kirkland to recruit star corporate partners from magic circle firms like the 2017 hire of David Higgins.

    Kirkland’s remuneration system is even more flexible than other elite US firms. Kirkland’s top partners can earn 8 times more than its junior partners compared to 3 or 4 times more at rival firms. A few years ago Kirkland’s hire of star leveraged finance partner Stephen Lucas from Weil at a reported $8m shocked the market.

    Kirkland makes up more partners each year than almost any other law firm. That’s because the firm makes use of non-equity partners i.e. salaried partners who don’t have a stake in the business or join partner meetings. That’s useful for a number of reasons: it makes junior partners work hard to bring in business but they’re only paid a little more than they were as associates; it lets the firm heavily assess partner potential and if they’re not equity partner material, they can be told to leave; it keeps equity partner compensation high to attract lateral hires.

    The firm is one of the most active lateral hirers in London. It recently took a team from Debevoise in New York and a 5 partner investigations and corruption team from Ropes & Gray. But Kirkland also has one of the highest attrition rates of any US law firm in London. According to The Lawyer, out of 40 associates that made partner in London between 2010 and 2015, only 25 remained by March 2016.

    That leads to the issue of culture. Kirkland is often described as competitive and ‘sharp elbowed’. Some point to the firm’s alleged ‘up or out’ policy and the heavy management of partner performance. Others have noted the clash between existing partners and newly hired laterals on large pay packets – allegedly a factor in the recent six-partner exit for Sidley Austin. But it’s difficult to say whether this is still the case. Kirkland recently introduced a number of measures to encourage group working and collaboration between partners.

    London heavyweight
    Kirkland originally launched in London to serve its key US clients, including private equity firm Bain Capital. But Kirkland quickly integrated and began promoting from within - in contrast to other US law firms that relied on lateral hires.

    The firm did hire aggressively, picking up a number of partners for magic circle firms Linklaters and Freshfields. That combination of organic growth and lateral hires has helped to make Kirkland the second largest US law firm in London. The firm grew its London revenue by almost 50% in 2017 and it’s also taking another floor in the Gherkin to compensate for a sharp rise in lawyer headcount, which is up 61% since 2013.

    Profitable practice areas
    The firm excels in public M&A and this recently became a core practice area. It also boasts one of the best private equity practices in the City thanks to its strength in leveraged finance. Its finance team has been responsible for securing many private equity relationships, an area where rival Freshfields lags behind, and that's helped it to take market share. In 2017, Kirkland topped the deal value rankings for UK M&A and placed fourth by global deal value.

    Meanwhile, Kirkland has been trying to boost its corporate/M&A practice in London through a number of magic circle lateral hires.

    Kirkland's bankruptcy practice is also very profitable. In 2017 the firm acted on three of the four largest Chapter 11 bankruptcies. That includes Toys R Us in one of the largest ever filings for a speciality retailer.

    Before it dominated the transactional space, Kirkland was mainly a litigation firm. And that shows today – in 2017, Kirkland secured 34 trial victories for its clients and was ranked by The Lawyer as the second largest litigation firm by revenue. The firm had recently acquired 17 lawyers from Bancroft PPLC, an elite boutique in Washington D.C. that specialises in Supreme Court and appellate litigation. The move included star lawyers such as Paul Clement, who has "argued more Supreme Court cases since 2000 than any other lawyer" and Bancroft founder, Viet D. Dinh. Over the years, Kirkland has represented clients in many of the biggest headlines including BP's oil spill and Volkswagen's emissions scandal.

    Targeted international reach
    In 2006, when many US firms were happy to act as counsel for UK firms in Hong Kong, Kirkland ambitiously pursued its own local law capability. It began as a small private-equity-focused office but soon ballooned in size. Between 2011 and 2015 Kirkland more than tripled its headcount in Asia and became one of the fastest growing firms in the region. This helped to position Kirkland for Chinese outbound investment and for large private equity deals in the region. In 2017, the firm topped the Mergermarket table for private equity buyouts by value in the Asia Pacific region.

    Kirkland excels in other regions by operating targeted practices. In San Francisco, the firm's patent litigation practice advises big names like Apple, Intel and Cisco. Whilst its fast-growing Houston office has a successful energy practice, which was recently named Energy Practice Group of the Year by Law 360.
     

    J Malone

    Valued Member
    Jun 1, 2018
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    47
    Kirkland & Ellis Open Day information

    There was a workshop related to private equity!

    Private Equity

    - investing money in operating business

    - an investment ‘asset class’ alongside public equity, real estate, commodities. Govt bonds, hedge funds

    - 3 categories; venture capital, growth capita, LBOs

    - Key features

    1) Financial sponsors ; alternative investment manager

    2) Active ownership : growth + synergies

    3) Leverage + cash + generate business

    4) Profit sharing(the biggest profit of private equity) : carry + investment

    5) Tax operation

    6) Investment duration (2-5 years) / Exit plan

    7) Leverage : use finance

    -> Structure your investment; investor look at the long-term potential in the investment to make another buyer for making better profits


    Knowing some private-equity backed business will be beneficial

    1. Tommy Hilfiger

    2. Costa

    3. AC Milan

    4. Kurt Geiger

    5. Merlin Entertainment Group


    Knowing some famous PE firms would be also beneficial
    :
    • The Blackstone Group. ...
    • Kohlberg Kravis Roberts. ...
    • Goldman Sachs Principal Investment Area. ...
    • The Carlyle Group. ...
    • CVC Capital Partners. ...
    • Apax Partners. ...
    • Apollo Global Management.
     
    • Like
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    Jaysen

    Founder, TCLA
    Staff member
    TCLA Moderator
    Gold Member
    Premium Member
    M&A Bootcamp
  • Feb 17, 2018
    4,692
    8,564
    Kirkland & Ellis Open Day information

    There was a workshop related to private equity!

    Private Equity

    - investing money in operating business

    - an investment ‘asset class’ alongside public equity, real estate, commodities. Govt bonds, hedge funds

    - 3 categories; venture capital, growth capita, LBOs

    - Key features

    1) Financial sponsors ; alternative investment manager

    2) Active ownership : growth + synergies

    3) Leverage + cash + generate business

    4) Profit sharing(the biggest profit of private equity) : carry + investment

    5) Tax operation

    6) Investment duration (2-5 years) / Exit plan

    7) Leverage : use finance

    -> Structure your investment; investor look at the long-term potential in the investment to make another buyer for making better profits


    Knowing some private-equity backed business will be beneficial

    1. Tommy Hilfiger

    2. Costa

    3. AC Milan

    4. Kurt Geiger

    5. Merlin Entertainment Group


    Knowing some famous PE firms would be also beneficial
    :
    • The Blackstone Group. ...
    • Kohlberg Kravis Roberts. ...
    • Goldman Sachs Principal Investment Area. ...
    • The Carlyle Group. ...
    • CVC Capital Partners. ...
    • Apax Partners. ...
    • Apollo Global Management.

    Thanks for sharing! How did the open day go?
     

    J Malone

    Valued Member
    Jun 1, 2018
    108
    47
    Thanks for sharing! How did the open day go?

    It was good and it was my first open day in my whole life!
    they said that there would be compulsory seats in Debt finance and corporate which is their top 2 during the trainee and
    also there will be international outlook in K&E trainee!

    experiences of public speaking and mooting would also be beneficial to state at the application .

    well as for me, I trained public speaking and debate in my society and also I had the experience to be a judge in a debate competition. do you think this would be also a beneficial experience for K&E?
     

    Jaysen

    Founder, TCLA
    Staff member
    TCLA Moderator
    Gold Member
    Premium Member
    M&A Bootcamp
  • Feb 17, 2018
    4,692
    8,564
    It was good and it was my first open day in my whole life!
    they said that there would be compulsory seats in Debt finance and corporate which is their top 2 during the trainee and
    also there will be international outlook in K&E trainee!

    experiences of public speaking and mooting would also be beneficial to state at the application .

    well as for me, I trained public speaking and debate in my society and also I had the experience to be a judge in a debate competition. do you think this would be also a beneficial experience for K&E?

    Yes I'm sure that counts. Just be sure to explain what exactly you did in those roles.
     

    Jaysen

    Founder, TCLA
    Staff member
    TCLA Moderator
    Gold Member
    Premium Member
    M&A Bootcamp
  • Feb 17, 2018
    4,692
    8,564

    FutureLawyerIJN

    Standard Member
    Nov 12, 2019
    5
    4
    Those of you applying to Kirkland & Ellis, there is a detailed article in the FT today:

    How a private equity boom fuelled the world’s biggest law firm
    https://www.ft.com/content/13696928-86d5-11e9-a028-86cea8523dc2?shareType=nongift

    If anyone wants it but doesn’t have access to the FT, let me know and I’ll do a summary of the main points.

    hi! I’m really interested in finding out more but I don’t have access to this article :( is the offer to summarise the points still open? I would really appreciate it! :)
     
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    Jaysen

    Founder, TCLA
    Staff member
    TCLA Moderator
    Gold Member
    Premium Member
    M&A Bootcamp
  • Feb 17, 2018
    4,692
    8,564
    Thankyou!!☺️

    Here's the summary:

    The article begins by talking about Kirkland's former reputation as a litigation powerhouse with a 'decent mid-market private equity practice'. Since then, aggressive lateral hiring and growth in PE has led to Kirkland becoming the highest grossing law firm in the world. The firm has grown alongside its private equity clients (Kirkland says it works for over 450), which has generated a variety of legal work, from buying and selling businesses to drafting finance documents and advising portfolio companies. There are questions, however, over what will happen to Kirkland if PE work dries up.

    The article also discusses Kirkland's strategy of hiring star partners who were at the bottom of the lockstep, promising high pay and autonomy to bring them over. The firm has also done well to attract junior lawyers, promising a shorter partnership track (although they start as a salaried partner). On the other side of this, however, the article notes how retaining talent has been a challenge for Kirkland. The firm's culture is not for everyone and lawyers may be asked to leave if they aren't meeting expectations.
     
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    Reactions: WannabeSolicitor24

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