What Is The Real Reasons Behind The Neel Sachdev Departure From Kirkland’s To Paul Weiss?
Neel Sachdev’s shock departure from Kirkland and Ellis sent the London legal world into a maelstrom of chat and tittle-tattle about what happened and just what his pay deal with Paul Weiss was.
But the departure was not altogether unexpected given the underlying ructions between two private equity stars: Sachdev and fellow Kirkland star lawyer who according to reports in the Financial News and elsewhere ended when both lawyers were barely talking to one another.
Neel Sachdev’s departure from Kirkland and Ellis is seen as a major setback for the firm. He was a top lawyer and debt finance rainmaker who helped drive the growth of Kirkland and Ellis in London for nearly a decade.
His exit, along with that of three other partners, has been described as a “spectacular series of departures” and has sent shockwaves through the London legal community.
Although it is unclear what the long-term effects of his departure will be, some insiders and commentators have raised questions about the culture and future prospects for Kirkland and Ellis. However, as the largest law firm in the world by revenue, it will continue its aggressive growth strategy with or without Neel Sachdev.
The Chicago-founded firm had $6.5 billion in gross revenue in 2022, with its profits per equity partner reaching more than $7.5 million, according to the American Lawyer. And this month it promoted a record 205 lawyers to partnership, for the sixth year in a row.
Bloomberg Law reported that the firm had 80 new partners in 2013 to over 200 in 2023 but the London repercussion of the Sachdev departures will still hurt in the short term.
Sachdev and Lucas had together helped drive growth for Kirkland and Ellis in London and were both colleagues and, to an extent, also competitors.
Although Lucas was hired by Sachdev and subsequently became what was described as the de facto head of the London office, it was also Sachdev’s connections and drive that remained a key influencer behind Lucas’s role.
Neel Sachdev and Stephen Lucas, prominent private equity lawyers, played pivotal roles in Kirkland & Ellis’ rapid growth in London for nearly a decade. Sachdev was instrumental in bringing Lucas to the firm, and together they led the expansion of Kirkland’s UK business. However, their once strong partnership deteriorated over the years, leading to a breakdown in communication and cooperation.
The growing rift between Sachdev and Lucas escalated when Kirkland hired Alvaro Membrillera, the former head of Paul Weiss in London in a move that was opposed by some, including a close colleague of Sachdev’s, Roger Johnson an M&A partner in the private equity team.
Johnson subsequently left the firm amid reports that he was planning a team move to another firm. According to reports he was asked to leave the firm and went to Paul Weiss.
It was Johnson’s move, reportedly without consultation with the wider UK legal team, that triggered the move by Sachdev and three partners from Kirklands to Paul Weiss in a move seen as one of the most dramatic and important transfers that the London legal market had experienced, elevating the significance of Paul Weiss in the London and European market.
The departure of the Sachdev team was not greeted with uniform discontent among some in the Kirland and Ellis leadership, who saw the private equity group as something of a self-governed fiefdom who were operating in their own silo without meaningful cooperation with the rest of the London legal team.
The growth driven by Sachdev and Lucas was obviously appreciated within the firm and its bottom line, but the disputes between the two star private equity players also lead to resentment within the wider Kirkland and Ellis partnership.
Sachdev resigned in August following Johnson’s departure and was joined by several partners, including debt finance partner Kanesh Balasubramaniam and high-yield finance partners Matthew Merkle and Deirdre Jones, all of whom joined Paul Weiss.
Rivalry or Ambition?
The question that is being asked by some is whether the factional fighting within Kirkland and Ellis drove Neel Sachdev to resign, or whether it was driven more by the possibilities – and the pay – on offer at Paul Weiss.
There is little doubt that Sachdev was losing influence at Kirkland and Ellis as a direct result of his own success, particularly through the rivalry with Lucas that was providing fault lines that were potentially undermining the Kirkland and Ellis firm structure.
Johnson’s removal from Kirkland signaled that Sachdev had lost the internal power struggle within the London office. The move to Paul Weiss was an opportunity to build the influence of the New York-based law firm’s London activities and presence.
The firm had started in London in 2001 and remained relatively small. By moving across Sachdev and his team brought an immediate and large foundation that would permit the firm to expand its footprint in private equity, M&A, tax, litigation and competition law.
The Kirkland and Ellis career had been remarkably successful but it may also have run its course. As the firm grew the management style and influence of the two legal stars was coming under greater scrutiny and exacerbating political scar lines in the firm itself.
Sachdev was becoming dissatisfied with the altered course taken by Kirklands and the shift in its leadership. New challenges and opportunities awaited and the cache and repute of Paul Weiss as one of the world’s most prestigious law brands was there to provide them.
Paul Weiss has long been a major player and regarded as one of the most powerful and influential law firms in Manhattan, but also with international plans in key markets like London.
Kirkland partners have expressed mixed sentiments about the departures, acknowledging that the firm will continue to operate as usual. Some believe the departures won’t have a significant impact on the firm, while others see it as an opportunity for Sachdev and his team to shape their own practice.