Kirkland & Ellis is the highest-earning law firm in the world and as if that isn’t enough attraction for many lawyers, the latest alteration to the law firm’s attraction has been to shorten the road to equity partnership by a year – straight to highest-paid law firm top tier position.
The move is made against a background of intense competition in the law job arena as the bonus season increases the intense competition between Big Law firms and boutiques for the best legal talent.
The Kirkland & Ellis move was announced via email within the firm on 2 December and reported in the legal media, meaning salaried partners can now enter the hallowed ranks of the lucrative equity partnership three years after their promotion and nine years after leaving law school. In equity partnership terms – particularly for a firm with the size and money of Kirkland & Ellis – that is a fast track to high pay packets.
The K&E Move Reflects Increased Responsibilities
‘Given the talent of our partnership and the increased responsibilities and experience gained in today’s environment, we believe that consideration for equity a year sooner is appropriate,’ a memo obtained by Law.com stated.
The move won’t benefit every salaried partner as a high proportion never make the next step: at the last count, the Chicago giant had 476 equity partners and 682 sitting outside the equity, according to Law.com.
However for highly motivated lawyers who are prepared to work a tough time schedule, the opportunity is now there.
“While partnership is still attractive to many, the relentless pressure to perform that partners face does not necessarily appeal to all despite the high level of earnings that is achievable.” legal consultant Tony Williams, principal of Jomati Consultants was reported as saying.
“Generally firms have kept their equity partner ranks static while adding non equity partners, which has helped to boost profit-per-equity-partner (PEP) but probably leaves some concerned that they are performing well but the carrot of equity partnership is seen to be on a very long stick.”
Kirkland’s Top-Paid Law Firm Status
Last year, Kirkland’s revenue jumped by 16.3 per cent to over $USD4.8 billion, with average profits per partner lifting by almost 20 per cent to $USD6.2 million.
And indications are that this year will be equally lucrative for the firm with the growth in global M&A deals breaching the $5 trillion barrier for the first time ever and with Kirkland reportedly advising on deals that were almost $500 billion. Further, with 789 deals handled by the Biglaw firm, the count dwarfed law firms like Sullivan & Cromwell, which sat at just 198.
That’s a lot of top money coming the equity partners’ way.
Legal recruiter Nick Robbins told Global Legal Post: “I am not surprised that Kirland are leading the market again and I see this reflecting the approach of their private equity clients in further aligning themselves with their key assets ie their people.
“Law firms can be opaque about partnership with the key factor often being the state of the economy, which as we all know is less than predictable. While the change won’t benefit everybody at Kirkland it gives the best talent an earlier shot at making equity, which will be welcomed internally at a time when markets are booming.”
The move by Kirklands comes at a time when there is a major battle to retain and secure legal talent. Associate salaries are at all-time highs and lateral movements continue to show the strong legal market and increasingly aggressive stance taken by biglaw firms and boutiques to flex their financial muscle in order to push their own lawyers up the best paid law firm ranks.
Biglaw Salary Scale
We have previously reported on the Biglaw salary scale here, but in terms of the largest law firms and the money they’re paying you can check the full list right here.
What do Kirkland & Ellis lawyers make?
Lawyers at Kirkland & Ellis are the best paid in the world, earning USD6.2 million last year as the firm achieved record earnings, hitting revenues of USD4.8 billion.