Welcome back to the Big Law Business column on the changing legal marketplace written by me, Roy Strom. Today, we look at the eerily similar growth in the cost of a Super Bowl ad and the profits generated by Kirkland & Ellis. Sign up to receive this column in your Inbox on Thursday mornings.
The 1985 season is memorable in Chicago as the last time the National Football League’s founding franchise, the Bears, won a championship.
It was also the first year law firm profits per partner were reported by The American Lawyer.
For Bears fans, it might have been the last good year.
For Big Law, the party was just getting started.
Super Bowl XX marked the beginning of an oddly close connection between the NFL’s biggest game and what is now Big Law’s largest firm, Kirkland & Ellis.
I’m talking about the wild growth in both the cost to advertise during the Super Bowl and Kirkland’s profits per partner. They’ve reached eye-watering heights on an eerily similar trajectory.
It’s a bizarre coincidence: The price to reach consumers during the most popular TV show has moved along the same trend line as the profits generated by the world’s largest law firm over nearly 40 years.
When Bears defensive tackle William “The Refrigerator” Perry famously scored a rushing touchdown in the team’s 46-10 rout of the New England Patriots, it cost $525,000 to run a 30-second ad during the game.
That year, Chicago-based Kirkland’s 61 partners earned $405,000 on average, according to AmLaw’s inaugural report.
This Sunday, when Patrick Mahomes’ Kansas City Chiefs take on Jalen Hurts’ Philadelphia Eagles, sponsors will cough up $7 million for every 30-second spot, according to Ad Age and USA Today’s Ad Meter.
That’s the same threshold Kirkland’s profits per equity partner figure most recently crossed—touching nearly $7.4 million in 2021, AmLaw reported. (The firm’s 2022 results are not yet available.)
News stories gawking at the price of an ad during the Super Bowl are part of the big game ritual at this point. When the next round of law firm financials are reported, they’ll also spark plenty of conversation.
To an average reader, the huge figures might elicit similar questions: “Who on earth would pay for this?” “Is that even a good deal?” “What’s a law firm partner?”
I’ll let readers (or Google) answer those questions.
And I won’t try to draw real takeaways here, other than pointing out that advertising and high-end legal services appear to be two products where corporate America doesn’t get sticker-shock.
Still, there are signals in the trend that might predict what will happen with future law firm profits—and it’s not necessarily happy reading for Big Law partners.
What do Super Bowls XLI, XLIV, LIV and LV have in common? Translating those Roman Numerals, we’re talking about games played in 2007, 2010, 2020 and 2021.
Those are the only years where Kirkland’s partners made more money on average than the cost of the 30-second commercial during that year’s big game.
Each time, it was the result of unusually high growth in Kirkland’s profits—9% in 2007; 23% in 2010; and 19% in both 2020 and 2021.
Kirkland’s profits per partner have only fallen in two years since 2001—and both times it occurred in years after the firm’s profits exceeded the cost of a Super Bowl ad. That was in 2008 and 2011.
Of course, Kirkland’s profits have been running ahead of the Super Bowl for two years now. But Big Law profits generally declined in 2022—and it wouldn’t be much of a surprise if Kirkland’s fell with the broader industry.
Even if Kirkland’s profits were lower in 2022, it sets up an interesting question: Will they stay ahead of the cost of last year’s Super Bowl ads?
That was $6.5 million. To keep up its winning streak, the firm can afford a 12% drop in partner profits.
It seems like a pretty safe bet, to be honest.
OK, now, the fun part. We’ve had a sportsbook in this space before, and this final stat is for anybody still looking for tips on how to play this year’s big game.
If you think Kirkland’s profits in 2022 will beat that $6.5 million figure, consider riding with the Eagles.
That’s because a legendary quarterback won his first Super Bowl in three of the four years where Kirkland’s partner profits were higher than the cost of a Super Bowl ad.
Those winners were Peyton Manning in 2007, Drew Brees in 2010 and Patrick Mahomes in 2020. (FWIW, Tom Brady won his last Super Bowl in the other year.)
If the prevailing trends continue, the Eagles may have a future Hall of Famer on their hands.
Worth Your Time
On Paul Hastings: The firm has avoided the decline in profits that swept across the industry last year, Meghan Tribe reported. She spoke with the firm’s new chairman, Frank Lopez.
On Davis Wright Tremaine: The firm laid off 21 staff employees, Meghan reported, with managing partner Scott MacCormack writing in a memo that it will help the firm “recruit for and make investments in the areas of strategic importance.”
On Jones Day: The law firm known for advising President Donald Trump and filling his administration with lawyers is no longer in his corner for his 2024 presidential run, Justin Wise reported.
That’s it for this week! Thanks for reading and please send me your thoughts, critiques, and tips.
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