Asking Kirkland & Ellis where it’s all going wrong is a bit like the legendary question posed to George Best as he lounged on his bed with his casino winnings and a couple of Misses World. But the parallels aren’t too fanciful: prodigious talent, early promise and just a bit too much money. For it’s hard to say that Kirkland is doing badly. The Lawyer’s International Top 30 Firms in London report in 2015 revealed that its UK revenue was $175m (£121m), and it had the fourth-highest revenue per lawyer of any US firm in the City.
But next time someone talks about the extraordinary success of US firms in London, point them to Kirkland’s history. Kirkland has seen seven partner departures in the past month; six to Sidley and one to Freshfields. Since 2014 a total of 20 partners, both equity and non-equity, have left in London. Furthermore, of the 40 associates who made partner in the last six years just 25 remain at the firm. In comparison, Linklaters made up 41 partners in the same period and 40 are still at the firm.
Supporters of the American way will, of course, say a high-performance culture is more volatile and demanding than in UK firms (though magic circle partners will laugh hollowly at such a notion). But Kirkland, like many US firms, is also finding out that if you motivate people largely by paying them, it skews the culture towards fragility. The individualistic US approach, where clients and billings are portable commodities and star culture rules, is all a bit eighties. One of the lawyers interviewed for this week’s cover feature pungently comments that it’s “cheque book recruiting [that] has turned the market into a sort of whore-fest, rather than people moving for grown-up ideas about what the practice needs and what the clients need”. Fees to headhunters alone run into the tens of millions over the past decade. Imagine if that money could have been put to better use.
The question is, can Kirkland partners Neel Sachdev and Stephen Lucas turn the London office into a mini-Linklaters without losing the entrepreneurial element? Can you successfully institutionalise clients and workflows without losing that Yankee swagger? Most bizarrely, Kirkland did not formally engage with The Lawyer on this feature. It was a shortsighted and pointlessly defensive decision since the firm could have an interesting story to tell about rebooting – and in any case, it will have to get used to telling that story to convince more laterals to join.
With Kirkland seriously in the market for mainstream corporate capability, it needs to present a safer harbour for potential hires. Right now, it’s still rough seas ahead.