World’s Highest-Grossing Law Firm Sees Slowdown in Revenue and Profit Growth
It’s one of the most profitable law firms in the world but Kirkland & Ellis had subdued revenues and profit growth in 2022 reflects the increasingly tough legal market for even the biggest of the big law firms.
The first law firm to crash through the $6 billion revenue barrier in 2021, it has continued to reign as one of the most profitable and most prestigious law firms in the world.
Kirkland & Ellis with a year-on-year turnover increase of 8 percent and a partner profit rise of only 2 percent was the slowest performance the firm has seen in some time.
Top partners at the law firm can earn up to USD20 million a year, a banker-style feast for top lawyers in any law firm.
Kirkland’s 2022 financial results brought its revenue to $6.5bn.
Similarly, the profit per equity partner (PEP) only rose 2 percent to $7.5m, compared to a 19 percent increase in 2021 to $7.4m. The revenue per lawyer (RPL) also decreased by 5 percent to $1.9m.
The firm has always been a key indicator for those wanting to know what lawyers earn, pushing the boundaries with profits and revenues alike.
The firm’s expansion in headcount partly explains these figures, with the total number of lawyers growing by 13 percent in 2022, compared to 11 percent the previous year.
The number of non-equity partners rose by 16 percent to 881, with 193 partner promotions announced in October 2022, a 28 percent increase from 2021.
Associate numbers increased by 15 percent to 2,029, and equity partners grew by only 3 percent to 505. Despite two rounds of lawyer cuts in autumn 2022 and after performance reviews in spring 2023, the overall increase in headcount was significant.
However Kirkland has also had an ‘image problem’ in terms of its work hours and lawyer-retention, as we have reported previously.
Kirkland’s 2022 financial results remain impressive in a global transactional work slowdown that has seen some international firms report declines. While private equity, a core practice area for Kirkland, cooled down after a successful 2021, many market insiders predict that significant cash reserves held by investors and favourable economic indicators will soon lead to a resurgence, resulting in firms continuing to hire in the area, both in London and globally.
Kirkland also made its presence felt in the London lateral hiring market in the last year, with recruiter Fox Rodney reporting 14 partner-level hires in 2022, making it the most active US firm and the second-most active firm overall behind Eversheds Sutherland. However, it was also second in partner departures in London, with eight departures, behind Brown Rudnick’s ten.
