Kirkland & Ellis Chair Jeffrey C. Hammes made aggressive bets on firm growth with private equity transactions playing a big part, and there’s no indication things will slow down under his successor.
Hammes is stepping down in February 2020 after a decade leading Chicago-based Kirkland. He’ll be replaced as head of the firm’s 15-member Global Management Executive Committee by private equity lawyer Jon A. Ballis.
Under Hammes’ watch the firm has grown spectacularly, posting $3.1 billion in gross revenues last year.
“When I talk about firm strategy and positioning, Kirkland is Exhibit A when it comes to the advantages of scale, profitability and a strategy to prioritize growth around a limited number of higher rate areas,” Kent Zimmermann, a law firm strategy adviser with the Zeughauser Group, told Bloomberg Law.
More Growth Ahead
Even with Hammes’ departure on the horizon, Kirkland shows no signs of flagging.
The year 2019 is expected to be “another strong year of top-line growth” for law firms, according to new data from Citi Private Bank Law Firm Group and Hildebrandt Consulting, which pegs the growth rate for the law firm industry next year as between 6 and 7 percent.
Another major industry report, from Wells Fargo Private Bank Legal Specialty group recently said “very strong” transactional volume means the legal industry has “near perfect conditions for revenue growth and profitability.”
The top 50 major firms are expected to see 8.2 percent growth, with an increase in both billable hours and revenues per lawyer, according the group’s nine-month snapshot of the legal industry.
And experts expect Kirkland’s gross income to continue to rise, perhaps by another $100 million on top of its recent growth. Even if the economy slows, the firm could benefit because of its strong practices in bankruptcy and restructuring.
Private Equity Boost
Hammes has been known for making aggressive bets on firm growth.
Private equity transactions have been a major driver of Kirkland’s success, as it parlayed its expertise in major deals such as Bain Capital’s $4.3 billion takeover last year of German generic drug maker Stada Arzneimittel.
Kirkland was involved in nearly 1,200 deals over the past five years, according to private equity deal tracker Mergermarket.
“Kirkland has been focusing on private equity, restructuring and bankruptcy and high-stakes litigation. It started before Jeff Hammes was chair, and under his leadership, it has grown and led to Kirkland being the largest firm by gross revenue and among the most profitable,” Zimmermann, said.
In recent years, Kirkland has hired a number of private equity lawyers, as advising on big money investor deals can generate millions in legal fees.
And Hammes is credited with expanding the firm’s capabilities through high-level lateral hires from other major law firms.
These include Sandra Goldstein, a leading litigator in the mergers and acquisitions space, who came to Kirkland this spring from Cravath, Swaine & Moore.
Earlier in the year, Hammes had burnished the Kirkland brand by hiring another Cravath partner, Eric Schiele. While lassoing a Cravath partner is always noteworthy, Schiele’s specialty is M&A—Kirkland’s bread and butter. Schiele has represented such top-drawer clients as Disney and Time Warner.
Partners at Kirkland have shared in the fruits of these developments. According to AmLaw rankings, Kirkland’s profits per equity partner are now a hefty $4.7 million annually.