Kirkland & Ellis, the world’s highest-grossing law firm, is on track to generate record annual revenue of about $5bn following overwhelming demand during the pandemic.
Turnover at the powerful corporate adviser was approaching $5bn for the 12 months to the end of January, according to insiders, up from $4.15bn the year before. It follows a year in which three of the firm’s strongest areas — private equity, restructuring and litigation — all generated strong growth.
“It’s been eye-watering,” one partner said of the firm’s performance. “It’s been a shock.” Kirkland declined to comment.
Kirkland & Ellis has grown quickly over the past decade, fuelled by a boom in private equity and an aggressive expansion strategy that involved poaching top talent from rivals in London and New York.
According to several equity partners — who took home more than $5m last year on average — the Chicago-founded firm is keen to play down its results because of concerns over how such outperformance might be received during a global pandemic. Kirkland does not publicly disclose financial results, but it appears in the American Lawyer’s annual ranking.
One partner said: “We’ve certainly had a really good year, but we can’t say that too loudly when so many people are suffering.” Another said: “This crisis is a humanitarian issue so it doesn’t feel right to be talking about how well you’ve done.”
The firm’s outperformance follows unexpectedly high volumes of work in private equity, the sector that catapulted Kirkland into the global elite, and litigation and restructuring, which tend to do well in times of economic crisis.
Lawyers had expected a drop in M&A and private equity deals, but by the end of the year the value of private equity deals had soared to its highest level since 2007.
Kirkland topped Mergermarket’s league tables for global buyouts in terms of deal count and value in 2020, and for global exits. The firm advised on $111.5bn worth of buyouts and $82.5bn worth of exits.
Profits are also expected to be buoyed by a sharp reduction in business travel and expensive conferences.
“Industry-wide there was less expense last year because no one was travelling,” said Freddie Lawson of Fox Rodney, a legal recruiter. “There were no conferences, no lavish entertainment or overseas partner conferences. It has had a big impact on costs.”
Kirkland occupies the upper echelon of the US legal elite alongside Latham & Watkins, which generated close to $4bn in 2019 and was the largest global firm until 2018. Other top-tier rivals include Wachtell, Lipton Rosen & Katz, Sullivan & Cromwell and Cravath.
A string of US firms opted to pay a spate of special bonuses to junior lawyers last year on top of large year-end awards, amounting to as much as $140,000 for some associates.