On first inspection, the prospects of making partner at Kirkland & Ellis look good. In nine promotion rounds since 2007, London has seen 52 partners made up. Some 28 have been made up between 2012 and 2015; compare that with 10 at the similarly-sized London outpost of Weil Gotshal in the same time period.
The minimum number of partners made up in London in any given year is three (in 2009 and 2011) while 2010 saw nine associates promoted in a bumper round. Considering that, as of February 2016, there are 89 associates of all levels in the entire London office, nine promotions equates to a sizeable chunk of the associate pool.
Kirkland has begun creating more partners in its Asian offices in the last five years, but that hasn’t squeezed promotions elsewhere in the world. Eight associates have been made up in London in each of the last two years and 2015 was a record-breaker globally, with 90 promotions across the whole network.
The story behind this wealth of promotions is that Kirkland has an unusual system for making people up.
The partnership track is a fast one, by modern standards. Kirkland typically makes partners of six-year qualified associates, so the 2016 round of promotions later this year will certainly be dominated by those who qualified in 2010.
Associates are first promoted to non-share (ie non-equity) partner, a title which pays significantly less than equity partner. They then have four or five years to make it to share partner status and a stake in the equity. If they don’t… well, it’s up or out.
Does the ‘non-share’ stepping stone mean it’s easier to make partner at Kirkland than elsewhere? “There is a perception that non-share partners at Kirkland are essentially senior associates and that promotion to that level is relatively easy process,” says a lawyer who has been through the process. “It’s bullshit. Promotion to non-share partner is quite a hard process and the conversion into share partner is even harder.” What is true is that non-share partners aren’t invited to partner meetings.
Of the firm’s 800 partners, around a third have an equity stake. Non-share partners receive a hefty six-figure annual salary but only earn a tiny fraction of what the top earners in the equity take home. The initial jump from senior associate to non-share partner is a small one, from around £150,000 to £162,000.
What the Kirkland process does is create a huge additional leverage, because non-share partners are earning a fraction of what they’re billing. That’s great when the economy is booming, but not so good during the down times, as when non-share partners are not billing, they became a huge fixed cost. Since London is mainly staffed by non-share partners (there are about 25 members of the equity), it means the firm’s City office can be hugely profitable.
For the transition both to non-share and then share partner, candidates are discussed in meetings between senior members of the firm, who nominate people to be promoted.
Naturally, the discussion is about whether it makes business sense to move someone up – who will be able to get the business, and ultimately bring in the money.
Potential new partners (both for non-share and share) don’t need to get flown around the global network to make connections, but senior partners in other offices who have worked with them are asked to comment on whether they should be made up. Associates need to show they have the drive, and they’ll be told if they don’t.
Once you make equity partner, there’s no time to rest on your laurels. Senior sources at Kirkland say equity partners have a review every two years, and if they’re not bringing in the work to the firm’s satisfaction, can be told to leave.
Who gets promoted?
Corporate lawyers make up more than half of promotions at Kirkland London since 2010 – unsurprising given the office’s transactional focus. After corporate comes debt finance. That team has seen six associates made up in the last nine years.
In terms of background, 25 per cent of the 40 associates promoted to partner by Kirkland in the last five years went to Oxbridge, while 18 per cent studied overseas.
They started their careers at a variety of different firms, with Clifford Chance the best represented: four associates made up at Kirkland in the last five years trained at the magic circle firm.
Up or out?
The stats back up Kirkland’s ‘up or out’ policy for partners who don’t make the running for equity. Of the 40 associates made partner in the last six years, 25 remain at the firm, including four of the nine promoted in 2010. By comparison, Linklaters made up 41 partners in the same time span and 40 of them are still at the firm (the one who left joined Kirkland).
The corporate department sees the most partners made up; it also sees the most departures. Of the nine associates made up in 2010, the five who have left all worked in corporate; the four who remain work in tax, litigation and restructuring.
Where do Kirkland’s departees go? Other US firms, mostly. Of the 15 partners who have left, four went to Sidley Austin Brown & Wood in a mass departure last month, two are now at Fried Frank Harris Shriver & Jacobson, two have gone to Willkie Farr & Gallagher, one to White & Case, one to Proskauer Rose. Another is now working for PwC’s Australian legal practice.
The other four have left law firms (two joining businesses relating to private equity, one working as a senior legal analyst at DebtXplained and one launching his own tech startup in Hong Kong).
Ten of the 15 partners who have left were corporate lawyers, three worked in debt finance, one in tax and one in private funds.