Legal Business Blogs

City office grows faster than US as Kirkland posts 7% global revenue hike

While a handful of high-profile departures has meant Kirkland & Ellis has been the subject of much speculation in the City lately, the firm’s non-US revenue is up around 10%, growing faster than the firm’s overall revenue, driven by London growth.

The US firm has continued to post robust numbers with a global revenue of $2.3bn from $2.15bn in 2015. While turnover is up 7%, profits per equity partner had a slower uptick growing just 3% to $3.6m. In 2014, partner profits surpassed the $3.5m mark rising 7% to $3.51m, which came after a 1% increase in 2013 to $3.28m.

Revenue per lawyer grew 4% to $1.4m, with a similar increase in the global headcount which rose 3% to 1,619 fee-earners from 1,576 the previous year. Equity partner headcount grew 4% from 337 to 351 while non-equity partner numbers grew 3% to 405 from 395.

In line with many other US firms, Kirkland’s non-US arm grew faster than the firm’s domestic component, bringing in a double-digit revenue increase of around 10% – three percentage points higher than the firm’s overall growth.

Of Kirkland’s 12 offices, revenue at the firm’s five international offices – London, Munich, Hong Kong, Shanghai and Beijing – stood at just under $200m in 2015, with London being the largest contributor with an estimated $180m in turnover, Legal Business understands.

Some key deals in the London office this year include advising Montagu Private Equity on its sale of CliniSys to Roper Technologies; acting for Triton Investment Advisors with the sale of its portfolio company Inflight Services Europe to Gate Gourmet; and representing CapVest Partners in its acquisition of IBA Molecular from SK Capital.

Kirkland’s London headcount has grown 17% in the last year and doubled its overall size in the last five years. The office now houses some 174 fee-earners and 62 partners, though a large number of these are non-equity partners. The firm made one of its largest promotion rounds in the City last year making up eight lawyers which amounts to 13% of the total City partner count.

But despite its strong performance the office has been criticised for offering what is viewed by some as excessive compensation packages to lure in talent from rivals – mainly for the hire of Stephen Lucas – one of the best-known names in the leverage buyout market – from Weil Gotshal and Manges in 2014.

Last year, the firm made five high-profile lateral hires in the City, which saw Linklaters’ corporate duo Matthew Elliott and Roger Johnson join, alongside fellow competition partner Paula Riedel; and debt finance partner Michael Steele from Freshfields Bruckhaus Deringer; as well as tax partner Jonathan Kandel also from Weil, Gotshal & Manges.

However, the London office has also seen a fair few departures recently including the notable exit of a six-partner team to Sidley Austin at the end of February, and the exit of capital markets partner Andrew Hagan to Freshfields Bruckhaus Deringer.