how sustainable is Kirkland's growth?

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how sustainable is Kirkland's growth?

Postby Anonymous User » Wed Nov 08, 2017 9:45 pm

Hi, will be an incoming associate at Kirkland & Ellis (NY) next fall. The firm has grown so much, I'm just scared it's a bubble waiting to burst. How sustainable is the firm's growth, particularly since there might be a recession in the next 5 ish years.

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Re: how sustainable is Kirkland's growth?

Postby Anonymous User » Wed Nov 08, 2017 9:51 pm

Anonymous User wrote:Hi, will be an incoming associate at Kirkland & Ellis (NY) next fall. The firm has grown so much, I'm just scared it's a bubble waiting to burst. How sustainable is the firm's growth, particularly since there might be a recession in the next 5 ish years.


It's a shame you're not going to be in the same office as the KE Chicago person freaking out about whether 65 people was too many summer associates for the office. Seems like you guys would be friends.

I personally will be in KE: Chi and doing my best to avoid all the worry warts that Kirkland apparently hired this year.

To *actually* answer your question, Kirkland Revenue Per Lawyer is top 5 in the country, so it's not like this is being entirely fueled by leverage. Kirkland has absolutely enormous deal flow from its mid-market PE niche and it leads to an especially profitable firm. When things do slow down during a recession, they'll toss your ass into Restructuring to help you make up the hours.

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Re: how sustainable is Kirkland's growth?

Postby Anonymous User » Wed Nov 08, 2017 10:11 pm

Also, Kirkland just had its most profitable year. Ever.

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rpupkin
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Re: how sustainable is Kirkland's growth?

Postby rpupkin » Thu Nov 09, 2017 1:02 am

Anonymous User wrote:Also, Kirkland just had its most profitable year. Ever.

I'm not sure that cuts in the direction you think it does.

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Re: how sustainable is Kirkland's growth?

Postby Anonymous User » Thu Nov 09, 2017 2:17 am

Well that's the risk you take. Hard to find a "Goldilocks" law firm that's just right. It's not like the alternative, where you go to a struggling law firm that hardly picked any summers, is any better. Kirkland NY seems pretty confident that the numbers will hold up as they've hired several associates through 3L recruiting. They're always getting laterals in as well.

If it's any consolation, Cravath apparently offered 110 summers in 2016, and that firm has only like 500 attorneys total. Strange how that arithmetic works out.

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Re: how sustainable is Kirkland's growth?

Postby zhenders » Thu Nov 09, 2017 2:21 am

Anonymous User wrote:
Anonymous User wrote:Hi, will be an incoming associate at Kirkland & Ellis (NY) next fall. The firm has grown so much, I'm just scared it's a bubble waiting to burst. How sustainable is the firm's growth, particularly since there might be a recession in the next 5 ish years.


It's a shame you're not going to be in the same office as the KE Chicago person freaking out about whether 65 people was too many summer associates for the office. Seems like you guys would be friends.

I personally will be in KE: Chi and doing my best to avoid all the worry warts that Kirkland apparently hired this year.

To *actually* answer your question, Kirkland Revenue Per Lawyer is top 5 in the country, so it's not like this is being entirely fueled by leverage. Kirkland has absolutely enormous deal flow from its mid-market PE niche and it leads to an especially profitable firm. When things do slow down during a recession, they'll toss your ass into Restructuring to help you make up the hours.


You seemed like a jerk the first time you posted; you seem like a jerk now. It's too bad; my KE Chi summer class was friendly, and we all helped make each other feel more welcome and like we all belonged there. By contrast, you've managed to already be unkind towards two of your future unmet colleagues. Remarkable. You'll be such a treat to work with--everyone will just love you.

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Re: how sustainable is Kirkland's growth?

Postby barkschool » Thu Nov 09, 2017 8:57 am

I come to these threads for the soaring optimism an associate shows towards their firm and the subtle clues they think they’re better than everyone else.

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Re: how sustainable is Kirkland's growth?

Postby ExBiglawAssociate » Thu Nov 09, 2017 10:35 am

rpupkin wrote:
Anonymous User wrote:Also, Kirkland just had its most profitable year. Ever.

I'm not sure that cuts in the direction you think it does.

Yeah, it's pretty dumb to view how the partners are doing as any indication of how the associates will do. Sure, you'll make non-equity "partner" at Kirkland, get paid like a senior associate for three more years, and then get told to leave when you still don't have sizable a book of business.

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Re: how sustainable is Kirkland's growth?

Postby Anonymous User » Thu Nov 09, 2017 11:18 am

Deleted; Unnecessary Post.

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Re: how sustainable is Kirkland's growth?

Postby Anonymous User » Thu Nov 09, 2017 11:35 am

barkschool wrote:I come to these threads for the soaring optimism an associate shows towards their firm and the subtle clues they think they’re better than everyone else.


Last time I was hanging out with a KE associate along with associates from a few other firms, the KE associate managed to "casually" work his billing rate into the conversation. That pretty much summed it up for me.

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Re: how sustainable is Kirkland's growth?

Postby Anonymous User » Thu Nov 09, 2017 12:07 pm

How sustainable is the firm's growth, particularly since there might be a recession in the next 5 ish years.


To get this thread back on track, I'm a current K&E associate in the NY office and lateraled here within the past few months. Coming in, I had the same concerns about growth being unsustainable and expected to lateral out as soon as my signing bonus vested, but now that I'm here it's a lot less concerning. As an associate, I obviously don't have a perfect window into what's happening, but I'm not particularly worried.

I came from one of the more traditional NY firms (one of Cravath/DPW/STB/S&C/Debevoise) and the pace here is entirely different from what I was used to at my prior firm. This place is firing on all cylinders and there are large new clients coming in regularly. While the firm is definitely vulnerable to a downturn, all law firms are, and I wouldn't expect that K&E would lay off more people than other nationwide non-lockstep firms during the next recession. Maybe associates here will fare worse than the firm I came from, but I bet we'll be in roughly the same boat as Latham or Gibson associates. I also don't think the next recession is going to be as bad as the 2008-09 one, which makes me hopeful that the chances of getting Lathamed are somewhat lower and high performers will be at less risk.

While I'm sure that some lateral partners are being hired with guarantees, which is part of what brought down Dewey, there were structural issues at Dewey that don't seem to be present at Kirkland. For instance, Kirkland's growth isn't the product of merging with other firms. Their lateral hiring seems to have been more targeted. Additionally, PE, the area where a lot of the hiring has been targeted, is a place where Kirkland is already perceived as a leader, so I think they don't have to shell out as much to get new talent, unlike Dewey which I think was trying to buy its way into specialties where its wasn't already one of the top firms.

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Re: how sustainable is Kirkland's growth?

Postby Anonymous User » Thu Nov 09, 2017 12:24 pm

Anonymous User wrote:
How sustainable is the firm's growth, particularly since there might be a recession in the next 5 ish years.


To get this thread back on track, I'm a current K&E associate in the NY office and lateraled here within the past few months. Coming in, I had the same concerns about growth being unsustainable and expected to lateral out as soon as my signing bonus vested, but now that I'm here it's a lot less concerning. As an associate, I obviously don't have a perfect window into what's happening, but I'm not particularly worried.

I came from one of the more traditional NY firms (one of Cravath/DPW/STB/S&C/Debevoise) and the pace here is entirely different from what I was used to at my prior firm. This place is firing on all cylinders and there are large new clients coming in regularly. While the firm is definitely vulnerable to a downturn, all law firms are, and I wouldn't expect that K&E would lay off more people than other nationwide non-lockstep firms during the next recession. Maybe associates here will fare worse than the firm I came from, but I bet we'll be in roughly the same boat as Latham or Gibson associates. I also don't think the next recession is going to be as bad as the 2008-09 one, which makes me hopeful that the chances of getting Lathamed are somewhat lower and high performers will be at less risk.

While I'm sure that some lateral partners are being hired with guarantees, which is part of what brought down Dewey, there were structural issues at Dewey that don't seem to be present at Kirkland. For instance, Kirkland's growth isn't the product of merging with other firms. Their lateral hiring seems to have been more targeted. Additionally, PE, the area where a lot of the hiring has been targeted, is a place where Kirkland is already perceived as a leader, so I think they don't have to shell out as much to get new talent, unlike Dewey which I think was trying to buy its way into specialties where its wasn't already one of the top firms.


The other important point is Kirkland has arguably the most profitable restructuring practice in the country, which is counter-cyclical and acts as a huge hedge against the impact of economic downturn.

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Re: how sustainable is Kirkland's growth?

Postby Anonymous User » Thu Nov 09, 2017 1:45 pm

As an incoming Latham associate, I tell myself that if the economy shits the bed again in the next 2-3 years everybody is fucked anyway. I'm sure the same applies to Kirkland.

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Re: how sustainable is Kirkland's growth?

Postby SmokeytheBear » Thu Nov 09, 2017 1:48 pm

Anonymous User wrote:
Anonymous User wrote:

The other important point is Kirkland has arguably the most profitable restructuring practice in the country, which is counter-cyclical and acts as a huge hedge against the impact of economic downturn.


Would love to see a source for this claim.

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Re: how sustainable is Kirkland's growth?

Postby Anonymous User » Thu Nov 09, 2017 2:15 pm

SmokeytheBear wrote:
Anonymous User wrote:
Anonymous User wrote:

The other important point is Kirkland has arguably the most profitable restructuring practice in the country, which is counter-cyclical and acts as a huge hedge against the impact of economic downturn.


Would love to see a source for this claim.


Kirkland topped Debtwire's chapter 11 fee/expense tracker for 2016 and 2015. Not perfect, obviously, but that's about as good as public sources will get.

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Re: how sustainable is Kirkland's growth?

Postby Anonymous User » Thu Nov 09, 2017 3:52 pm

Anonymous User wrote:As an incoming Latham associate, I tell myself that if the economy shits the bed again in the next 2-3 years everybody is fucked anyway. I'm sure the same applies to Kirkland.


I think this is basically true. I think non-NY based, non-lockstep firms such as Kirkland all have basically the same approach. Latham has historically been pretty aggressive about layoffs--they dropped a bunch of people in the early 1990s and after the dot com crash-- so I'd expect they would continue this practice, but I don't think they'll full-on Latham an entire class again as I think that impacted them long-term since it translated to a dearth of midlevels when the economy had stabilized.

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Re: how sustainable is Kirkland's growth?

Postby RaceJudicata » Thu Nov 09, 2017 8:15 pm

Anonymous User wrote:
SmokeytheBear wrote:
Anonymous User wrote:
Anonymous User wrote:

The other important point is Kirkland has arguably the most profitable restructuring practice in the country, which is counter-cyclical and acts as a huge hedge against the impact of economic downturn.


Would love to see a source for this claim.


Kirkland topped Debtwire's chapter 11 fee/expense tracker for 2016 and 2015. Not perfect, obviously, but that's about as good as public sources will get.


The profit margin on the fees from the Caesars case alone are probably enough to put them near the top of bk/restructuring profits.

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Re: how sustainable is Kirkland's growth?

Postby Anonymous User » Thu Nov 09, 2017 9:56 pm

Anonymous User wrote:
Anonymous User wrote:As an incoming Latham associate, I tell myself that if the economy shits the bed again in the next 2-3 years everybody is fucked anyway. I'm sure the same applies to Kirkland.


I think this is basically true. I think non-NY based, non-lockstep firms such as Kirkland all have basically the same approach. Latham has historically been pretty aggressive about layoffs--they dropped a bunch of people in the early 1990s and after the dot com crash-- so I'd expect they would continue this practice, but I don't think they'll full-on Latham an entire class again as I think that impacted them long-term since it translated to a dearth of midlevels when the economy had stabilized.

I agree. I'd also like to think they got punished just a little bit on the recruiting front. Latham's name is still poison at my T13.

On the other hand, they've grown really fast since the last financial crisis. They might take a look at the bottom line and decide it was totally worth it.

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Re: how sustainable is Kirkland's growth?

Postby Monochromatic Oeuvre » Thu Nov 09, 2017 11:22 pm

Pointless question, because (a) OP's going there anyway, so it's not like any answer would make him do something different, (b) pretty much any richer firm is in a "healthier" position than pretty much any "poorer" firm, and (c) the life cycle of associates is so short that you'd have to time a recession pretty well to figure out when juniors would get picked off (and by and large it would be juniors getting the axe).

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Re: how sustainable is Kirkland's growth?

Postby MillllerTime » Fri Nov 10, 2017 2:18 am

Monochromatic Oeuvre wrote:Pointless question, because (a) OP's going there anyway, so it's not like any answer would make him do something different, (b) pretty much any richer firm is in a "healthier" position than pretty much any "poorer" firm, and (c) the life cycle of associates is so short that you'd have to time a recession pretty well to figure out when juniors would get picked off (and by and large it would be juniors getting the axe).


Basically this, especially (b). If you're a 2L/3L concerned about job security, you're generally better off picking the firm with the highest revenue per lawyer. There are lots of reasons to pick other shops over K&E, but job security or firm health really aren't them. K&E is pretty ruthless with their (equity) partnership ranks, but they do actually attempt to make sure associates land on their feet and have successful careers, even outside the firm. Kirkland is also much more self-conscious than the Cravaths and S&Cs of the world, so they will pay an associate's salary for 12+ months to avoid the negative publicity of up-and-outing someone.

In short: certainly not an easy place to work, but concerns about K&E's business model, as an associate, are silly.

*Kirkland mid-level, take with all necessary grains of salt.

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Re: how sustainable is Kirkland's growth?

Postby Anonymous User » Fri Nov 10, 2017 5:27 pm

MillllerTime wrote:
Monochromatic Oeuvre wrote:Pointless question, because (a) OP's going there anyway, so it's not like any answer would make him do something different, (b) pretty much any richer firm is in a "healthier" position than pretty much any "poorer" firm, and (c) the life cycle of associates is so short that you'd have to time a recession pretty well to figure out when juniors would get picked off (and by and large it would be juniors getting the axe).


Basically this, especially (b). If you're a 2L/3L concerned about job security, you're generally better off picking the firm with the highest revenue per lawyer. There are lots of reasons to pick other shops over K&E, but job security or firm health really aren't them. K&E is pretty ruthless with their (equity) partnership ranks, but they do actually attempt to make sure associates land on their feet and have successful careers, even outside the firm. Kirkland is also much more self-conscious than the Cravaths and S&Cs of the world, so they will pay an associate's salary for 12+ months to avoid the negative publicity of up-and-outing someone.

In short: certainly not an easy place to work, but concerns about K&E's business model, as an associate, are silly.

*Kirkland mid-level, take with all necessary grains of salt.


Wait, 12+ months? I thought usual severance was something like 1 to 3 months.

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Re: how sustainable is Kirkland's growth?

Postby rpupkin » Sat Nov 11, 2017 12:34 am

MillllerTime wrote:Basically this, especially (b). If you're a 2L/3L concerned about job security, you're generally better off picking the firm with the highest revenue per lawyer. There are lots of reasons to pick other shops over K&E, but job security or firm health really aren't them. K&E is pretty ruthless with their (equity) partnership ranks, but they do actually attempt to make sure associates land on their feet and have successful careers, even outside the firm. Kirkland is also much more self-conscious than the Cravaths and S&Cs of the world, so they will pay an associate's salary for 12+ months to avoid the negative publicity of up-and-outing someone.

I'm confused. If Kirkland associates are indeed landing on their feet, then why are they still unemployed for 12+ months after the firm lets them go?

I agree with you that there aren't any particular reasons to be concerned about the medium-term financial health of KE, but I find your "pay an associate's salary for 12+ months" claim hard to believe.

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Re: how sustainable is Kirkland's growth?

Postby MillllerTime » Sat Nov 11, 2017 12:42 pm

rpupkin wrote:
MillllerTime wrote:Basically this, especially (b). If you're a 2L/3L concerned about job security, you're generally better off picking the firm with the highest revenue per lawyer. There are lots of reasons to pick other shops over K&E, but job security or firm health really aren't them. K&E is pretty ruthless with their (equity) partnership ranks, but they do actually attempt to make sure associates land on their feet and have successful careers, even outside the firm. Kirkland is also much more self-conscious than the Cravaths and S&Cs of the world, so they will pay an associate's salary for 12+ months to avoid the negative publicity of up-and-outing someone.

I'm confused. If Kirkland associates are indeed landing on their feet, then why are they still unemployed for 12+ months after the firm lets them go?

I agree with you that there aren't any particular reasons to be concerned about the medium-term financial health of KE, but I find your "pay an associate's salary for 12+ months" claim hard to believe.


Sorry this was a misleading line. I don't know specifics of true severance, though I've heard people do receive a paycheck for 6 months from the point they stop working at the firm. I don't think this is any different than most other top firms.

The difference, at least from what I can tell, is that Kirkland doesn't give you the "you have 6 months" talk initially. I know of a couple anecdotes of people being encouraged to lateral (all due to consistently low hours over 2+ years), and still being employed by (and actually working - not receiving some sort of severance) K&E over a year later. My comment meant to convey that I think Kirkland is generally more friendly in this regard than most NY firms, in large part because Kirkland seems to be aware of its reputation and wants to counteract it a bit.




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