Kirkland & Ellis is opening an Austin, Texas office with more than 20 lawyers, most of whom will relocate from the firm’s other outposts to staff what will be its third office in Texas.
The office will help the firm take advantage of the technology, renewables, and alternative energy industries that have prospered in Austin in recent years, Kirkland leaders said in a statement.
For the world’s largest firm by revenue, Kirkland has been relatively judicious about where it opens offices with only 16 worldwide. But it has been building in Texas since opening in Houston in 2014 and expanding into Dallas in 2018, focusing on deal work in the energy industry and advising on more major oil and gas industry bankruptcies than any other firm. The firm has nearly 300 lawyers in the state.
The firm will look to recruit lawyers from existing Big Law firms in Austin, Andy Calder, a partner and member of Kirkland’s Executive Committee , said in an interview. But Kirkland also hopes to tap into a pool of lawyers who would be open to relocating to Austin, which has attracted transplants from coastal cities during the coronavirus pandemic.
“It’s an obvious extension of our Texas platform and if it adds that benefit of being a compelling city to live and work in, then we are happy to provide that platform,” said Calder, who opened the firm’s Houston office after Kirkland hired him from Simpson Thacher & Bartlett.
Last year Kirkland’s partners earned, on average, more than $6 million in profits per equity partner, The American Lawyer reported. The firm’s revenue in 2020 reached $4.8 billion, up 16% from 2019.
Many prestigious law firms had record financial years in 2020, and that has driven a competitive market for associates and partners in premium practice areas such as big-ticket corporate transactions and financings.
Kirkland’s Austin office will initially be staffed by partners Marc Browning, Stephen Butler, Kim Hicks, and Doug Tedeschi, who have relocated from other offices. Browning and Hicks are corporate partners who will move from the firm’s Houston office. Butler is a tax partner formerly in the firm’s Houston office, and Tedeschi is a debt finance partner moving from the firm’s Chicago office.
The firm had a three-pronged strategy opening the Austin office, Calder said. One was to recruit lawyers from existing firms in the city. Another was to be present in a city the firm thinks might attract its current lawyers or those from other firms looking to move. The third was the practice mix of the city’s major industries: technology and alternative energy.
Kirkland has had success hiring lateral partners in Dallas and Houston, but those legal markets are home to a larger contingent of Big Law firms than Austin, which could limit Kirkland’s potential growth in the Lone Star state’s capital city.
“It’s a less-developed market than Houston or Dallas without question,” Calder said. “But it is also a market that is primed for growth. The city is growing and the market is growing in terms of demand for high-level legal services. I think it’s an area that will be consolidated over the coming years and will be attractive to Big Law firms.”
Fourteen of the 15 largest law firms by revenue as of 2019 have an office in Houston, with all but two of those outposts opened after 2000. In Austin, Kirkland will be only the fourth of the 15 largest firms with lawyers on the ground.
Austin’s largest law offices by headcount belong to longstanding Texas firms including Jackson Walker, Baker Botts, and Norton Rose Fulbright. Other large firms with offices in the city include DLA Piper, King & Spalding, Orrick, Herrington & Sutcliffe, Quinn Emanuel Urquhart & Sullivan, Shearman & Sterling, and Wilson Sonsini Goodrich & Rosati.
“If there are three great lawyers out of 100 and Kirkland hires them, they just won,” said Kay Hoppe, a veteran recruiter for Big Law firms based in Kirkland’s hometown of Chicago. “They have done an analysis and are making a bet on themselves as they always do. And honestly, I’ve yet to see them fail.”