With unprecedented demand last year, Kirkland & Ellis surged into $6 billion territory, growing to a staggering gross revenue of $6.042 billion, while average profits per partner reached more than $7.3 million.
For perspective, the firm’s 25% rise in gross revenue, a $1.2 billion jump last year, is akin to adding a chunk of revenue the size of another Am Law 50 firm, for instance, a Morrison Foerster, Akin Gump Strauss Hauer & Feld, or Willkie, Farr & Gallagher.
With that, Kirkland is set to remain the highest-grossing law firm in the U.S. for the fifth year in a row. The Chicago-founded firm overtook Latham & Watkins in 2017 when it surpassed $3 billion in revenue for the first time. Latham also grew revenue by more than 25% last year, reaching $5.48 billion.
In addition to its revenue surge, Kirkland increased average profits per equity partner by more than 19%, reaching about $7.38 million while net income grew by 22% to $3.62 billion, according toh American Lawyer reporting. The firm’s profit margin slightly declined from 61% to 60%.
Kirkland grew its partnership ranks overall, but its nonequity tier saw the most growth. The firm’s equity partnership rose by 2.9% to 490 partners, while its nonequity ranks increased 11.9% to 763 partners.
Even as the firm’s total head count grew by 11% to 3,025 attorneys last year, revenue per lawyer surged 12.7% to $1.997 million.
The firm declined to comment on its finances.
Like the rest of the top-echelon firms, and firms across the industry, Kirkland benefitted from the surge of transactional activity that permeated the market after COVID-19 shut down many businesses in 2020.
That activity continued through 2021, as Big Law lawyers and professionals had not only grown accustomed to working remotely but also squeezing more hours into the day. The firm was particularly busy in the capital markets, SPAC and debt financing arenas. According to Deal Point, it ranked No. 1 for overall IPOs as issuer counsel by deal value ($32 billion) and deal count (97), and ranked No. 1 in SPAC IPOs.
During a year in which M&A global deal value was pegged at $5.9 trillion, Kirkland ranked No. 1 for firms listed as principal, with its deals valued at $548 billion. In number of deals announced, it ranked second at 977, behind Goodwin Procter with 1,083.
The firm represented NortonLifeLock, the cyber safety company, in a $25 billion merger with Avast; GrubHub in its $7.3 billion sale to Just Eat Takeaway.com; and several other multi-billion-dollar deals last year.
On the restructuring side, it also represented the three largest Chapter 11 debtors that filed in 2021 — Nordic Aviation, Seadrill Ltd. and Washington Prime Group. The firm’s litigation team was also named American Lawyer’s department of the year, representing clients such as 3M in the largest MDL in U.S. history related to military earplugs. And the firm helped finalize a historic $577 million settlement on behalf of historically black colleges and universities in Maryland.
With a frothy lateral market, the firm was also one of several to open up new offices in Salt Lake City and Austin in 2021, in an effort to both capitalize on native talent as well as to attract talented lawyers from other areas.
Both markets are considered hubs for new business and technology and are primed in several ways for Big Law, featuring not only tech and energy investments, but population growth, locally-based universities and favorable tax policies.
“[H]aving an office in Salt Lake City enhances our ability to attract exceptional legal talent and expand our capacity to meet increasing client demand,” chairman Jon A. Ballis said in a statement when the move was announced in September.
The firm has also made key hires in its London and Hong Kong offices recently. Kirkland led its Big Law competitors in both partner hires and departures in London last year, according to recruitment and consultancy firm Edwards Gibson, tallying 15 partner hires and 11 departures. Among the hires were Vincent Bergin and Keir MacLennan from Freshfields, whom Ballis called “two of the leading young private equity lawyers in London.”
The departures in London included corporate partners Mark Thompson and Sam Whittaker to Dechert.
In Hong Kong, Kirkland brought on capital markets partner Mengyu Lu from Sidley Austin and partner Peng Yu from Ropes & Gray, who advises PE firms and corporate clients on buyouts, divestitures and PIPE deals. The firm has also seen some departures in that office to rivals like Freshfields Bruckhaus Deringer, Linklaters and Latham.