Titles of Kirkland Partners Forum

[peter2009]

What does "P.C." stand for in certain Kirkland partners' titles?

[unlicensedpotato]

Professional Corporation, it indicates that the actual "partner" in Kirkland LLP is a legal entity, the partners' P.C.s, and not themselves as an individual.

[kellyfrost]

Professional Corporation, it indicates that the actual "partner" in Kirkland LLP is a legal entity, the partners' P.C.s, and not themselves as an individual.

Interesting...

[BenJ]

The above response is correct. My understanding is that, at Kirkland, using a P.C. generally indicates an equity partner, while non-equity partners do not use P.Cs.

[kellyfrost]

The above response is correct. My understanding is that, at Kirkland, using a P.C. generally indicates an equity partner, while non-equity partners do not use P.Cs.

Even more interesting.

[Anonymous User]

Can confirm this. P.C.s on our website denotes a share partner. Just the partner title indicates an income partner (we call them NSPs).

[gaddockteeg]

Can confirm this. P.C.s on our website denotes a share partner. Just the partner title indicates an income partner (we call them NSPs).

learned something new today.

[unlicensedpotato]

That makes sense -- I think the "play" with using P.C.s relates to limiting liability and self-employment taxes, neither of which should matter if you aren't equity.

[Anonymous User]

I was just summer associate there. From my understanding it was that P.C.s are always share partners but some non-P.C.s are share partners as well. From what I heard, P.C. has tax advantages once you hit a certain income that only share partners hit. Yet, not all share partners hit this income level.

[Anonymous User]

I was just summer associate there. From my understanding it was that P.C.s are always share partners but some non-P.C.s are share partners as well.

This is correct.

From what I heard, P.C. has tax advantages once you hit a certain income that only share partners hit. Yet, not all share partners hit this income level.

Have not heard this, but am relatively new.

[Anonymous User]

I was just summer associate there. From my understanding it was that P.C.s are always share partners but some non-P.C.s are share partners as well. From what I heard, P.C. has tax advantages once you hit a certain income that only share partners hit. Yet, not all share partners hit this income level.

I've also heard this. The "P.C." designation is made by some (but not all) equity partners for tax reasons.

[peter2009]

I was just summer associate there. From my understanding it was that P.C.s are always share partners but some non-P.C.s are share partners as well. From what I heard, P.C. has tax advantages once you hit a certain income that only share partners hit. Yet, not all share partners hit this income level.

I've also heard this. The "P.C." designation is made by some (but not all) equity partners for tax reasons.

Thanks for the responses. If it is for tax reasons, why don't partners at other firms use this designation?

[Anonymous User]

I was just summer associate there. From my understanding it was that P.C.s are always share partners but some non-P.C.s are share partners as well. From what I heard, P.C. has tax advantages once you hit a certain income that only share partners hit. Yet, not all share partners hit this income level.

I've also heard this. The "P.C." designation is made by some (but not all) equity partners for tax reasons.

Thanks for the responses. If it is for tax reasons, why don't partners at other firms use this designation?

It's a pain to setup; unless you're a tax attorney, you're likely going to need to pay other attorneys to do that for you, and you'll need to work closely with your firms HR to make sure everything is setup correctly internally (I *think* it has some effect on your benefits as well). Then you'll likely need to hire an accountant to do your taxes every year (although I imagine the vast majority of biglaw partners do this anyway, but it would still likely end up costing you more due to the relative uniqueness). At a Kirkland partners income level these are not really material costs, but at smaller firms it's likely just not worth the time and effort.

[Anonymous User]

I was just summer associate there. From my understanding it was that P.C.s are always share partners but some non-P.C.s are share partners as well. From what I heard, P.C. has tax advantages once you hit a certain income that only share partners hit. Yet, not all share partners hit this income level.

I've also heard this. The "P.C." designation is made by some (but not all) equity partners for tax reasons.

Thanks for the responses. If it is for tax reasons, why don't partners at other firms use this designation?

It's a pain to setup; unless you're a tax attorney, you're likely going to need to pay other attorneys to do that for you, and you'll need to work closely with your firms HR to make sure everything is setup correctly internally (I *think* it has some effect on your benefits as well). Then you'll likely need to hire an accountant to do your taxes every year (although I imagine the vast majority of biglaw partners do this anyway, but it would still likely end up costing you more due to the relative uniqueness). At a Kirkland partners income level these are not really material costs, but at smaller firms it's likely just not worth the time and effort.

I think all of this information is right, but I've still never been able to figure out why all rainmakers at say, DPW, don't also use P.C. (maybe some do, I just flipped through a handful of big names and didn't see any P.C.'s). Do other firms just not require them to put it on their website / email signature?

[Anonymous User]

I've heard the practice dates back to before K&E was an LLP and/or Illinois law used to allow veil piercing for malpractice even within an LLP. So if the partnership got sunk by a huge malpractice claim it would wipe out each partners personal wealth.

That wouldn't explain why nobody else in Illinois does it.

But there are definitely share partners who don't do it, usually younger ones.

[Anonymous User]

All of the share partners do not use the "P.C." Only some do. More than a few partners I've worked with who have shares (it is very easy to tell on the K&E system if you know a trick who is registered on the computer system as a "share partner" vs. "non-share partner") do not have the P.C. Maybe because of income level or extra work for taxes not being worth the savings, etc. Who knows. The only thing you can know for sure is that a "P.C." means they have shares and receive those shares through their Prof Corp. Not having a P.C. definitely doesn't mean they don't have shares though. Some big hitters don't have a P.C. after their name.

Other firms do have partners that do this. K&E just has a unique policy of holding their PCs out there on the website and email.

[Anonymous User]

All of the share partners do not use the "P.C." Only some do. More than a few partners I've worked with who have shares (it is very easy to tell on the K&E system if you know a trick who is registered on the computer system as a "share partner" vs. "non-share partner") do not have the P.C. Maybe because of income level or extra work for taxes not being worth the savings, etc. Who knows. The only thing you can know for sure is that a "P.C." means they have shares and receive those shares through their Prof Corp. Not having a P.C. definitely doesn't mean they don't have shares though. Some big hitters don't have a P.C. after their name.

Other firms do have partners that do this. K&E just has a unique policy of holding their PCs out there on the website and email.

I actually asked about this during my interview. The person I was interviewing with (who I later found out is a NSP) told me that it's a tax-driven decision generally made by share partners with a lot of Illinois-sourced income. So for share partners outside of Chicago, it would generally only be the people with a relatively large amount of shares, rather than someone who is a share partner but on the lower end of the scale.

But obviously this is not firsthand knowledge (same goes for everyone else in the thread, unless there's a secret K&E share partner).

[axel.foley]

I was just summer associate there. From my understanding it was that P.C.s are always share partners but some non-P.C.s are share partners as well. From what I heard, P.C. has tax advantages once you hit a certain income that only share partners hit. Yet, not all share partners hit this income level.

I've also heard this. The "P.C." designation is made by some (but not all) equity partners for tax reasons.

Thanks for the responses. If it is for tax reasons, why don't partners at other firms use this designation?

It's a pain to setup; unless you're a tax attorney, you're likely going to need to pay other attorneys to do that for you, and you'll need to work closely with your firms HR to make sure everything is setup correctly internally (I *think* it has some effect on your benefits as well). Then you'll likely need to hire an accountant to do your taxes every year (although I imagine the vast majority of biglaw partners do this anyway, but it would still likely end up costing you more due to the relative uniqueness). At a Kirkland partners income level these are not really material costs, but at smaller firms it's likely just not worth the time and effort.

I think all of this information is right, but I've still never been able to figure out why all rainmakers at say, DPW, don't also use P.C. (maybe some do, I just flipped through a handful of big names and didn't see any P.C.'s). Do other firms just not require them to put it on their website / email signature?

Could be possible that certain partners at Kirkland have noticeably higher salaries than almost all partners at DPW or Cravath, because Kirkland is eat what you kill and the latter are lockstep. This PC distinction could be a bigger deal for the rainmakers in Kirkland's corporate practices.

[Anonymous User]

Just want to confirm that while all P.C.'s are share partners, some non-P.C. partners are still share partners (i.e., they are not all NSPs). Not sure if every firm does this, but Kirkland has a relationship with a mid-size accounting shop in Chicago (Topel Forman) that will work with each share partner individually. They'll analyze whether the P.C. structure makes sense for them and they even have a permanent office in the Chicago Kirkland offices.

Maybe it makes sense for other firms as well, but Kirkland might be unique in that it offers the service to the partners vs. other firms where partner need to get its own advice on whether the structure makes sense (though I could be totally off on this point).

[Anonymous User]

Just want to confirm that while all P.C.'s are share partners, some non-P.C. partners are still share partners (i.e., they are not all NSPs). Not sure if every firm does this, but Kirkland has a relationship with a mid-size accounting shop in Chicago (Topel Forman) that will work with each share partner individually. They'll analyze whether the P.C. structure makes sense for them and they even have a permanent office in the Chicago Kirkland offices.

Maybe it makes sense for other firms as well, but Kirkland might be unique in that it offers the service to the partners vs. other firms where partner need to get its own advice on whether the structure makes sense (though I could be totally off on this point).

I suspect you're right about this tbh, and it's probably due, at least in part, to the historical tax reasons someone posted about previously.

[koalatriste]

If you notice Don Rocap, who definitely has shares, does not make this P.C. election. He does not think that it actually works. I am not a tax expert to the point where I can discuss the tax law behind this, but just thought it was interesting that the number one tax lawyer at K&E (maybe in all of private equity?) does not hold his shares through a corp.

https://www.kirkland.com/sitecontent.cf ... temID=7998

[Anonymous User]

If you notice Don Rocap, who definitely has shares, does not make this P.C. election. He does not think that it actually works. I am not a tax expert to the point where I can discuss the tax law behind this, but just thought it was interesting that the number one tax lawyer at K&E (maybe in all of private equity?) does not hold his shares through a corp.

https://www.kirkland.com/sitecontent.cf ... temID=7998

I doubt that he "does not think it actually works." The structure probably just doesn't make sense for him. As mentioned, not all share partners have the P.C. distinction.

[unlicensedpotato]

If you notice Don Rocap, who definitely has shares, does not make this P.C. election. He does not think that it actually works. I am not a tax expert to the point where I can discuss the tax law behind this, but just thought it was interesting that the number one tax lawyer at K&E (maybe in all of private equity?) does not hold his shares through a corp.

https://www.kirkland.com/sitecontent.cf ... temID=7998

Interesting point on Rocap. Maynes does hold through a P.C. (and was the tax matters partner for KE)

[RedNewJersey]

If you notice Don Rocap, who definitely has shares, does not make this P.C. election. He does not think that it actually works. I am not a tax expert to the point where I can discuss the tax law behind this, but just thought it was interesting that the number one tax lawyer at K&E (maybe in all of private equity?) does not hold his shares through a corp.

https://www.kirkland.com/sitecontent.cf ... temID=7998

Interesting point on Rocap. Maynes does hold through a P.C. (and was the tax matters partner for KE)

Follow the link now, and Rocap has it!

[Anonymous User]

If you notice Don Rocap, who definitely has shares, does not make this P.C. election. He does not think that it actually works. I am not a tax expert to the point where I can discuss the tax law behind this, but just thought it was interesting that the number one tax lawyer at K&E (maybe in all of private equity?) does not hold his shares through a corp.

https://www.kirkland.com/sitecontent.cf ... temID=7998

Interesting point on Rocap. Maynes does hold through a P.C. (and was the tax matters partner for KE)

Follow the link now, and Rocap has it!

Haven't worked with Rocap before, but I wouldn't be surprised if he initially didn't do it because of that famous tax attorney caution (e.g., "there is a private letter ruling from 1974 that indicates that the IRS may think x, which if true, could be analogized to current situation ("y") and even though y isn't x, y could have the same result as x if this one-liner from 1974 PLR is actually how the IRS thinks and, even though the IRS isn't a lawmaking body, if a court were to side with the IRS in its interpretation of the law that has no statutory or regulatory basis").

Anyone who has worked with an overly-cautious tax attorney knows how painful it can be. Not saying Rocap is like this (probably not), but if he is, I guess Rocap saw all those employment tax saving his peers were missing out on and decided to throw caution to the wind!