Kirkland & Ellis partners are facing a nervous few weeks as they wait to hear their fates on pay and promotions.
Equity partners at the world’s high-grossing law firm have their profit share reviewed every two years, and 2022 is an “on-year”, people familiar with the matter said.
Partners are expecting to hear the results of the review in December, after pay is decided by the firm’s ruling executive committee led by chair Jon Ballis.
“People get edgy because there have been a couple of surprises,” one ex-partner said. “If you are not busy and your clients are not paying a lot of fees, you start looking around your peers and trying to work out how things are going to pan out for you.”
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One current partner described the pay decisions as “more of an art than a science” and labelled the process “opaque”.
Kirkland was approached for comment.
There is a great deal at stake in the review, with the firm’s equity partners paid an average of nearly $7.4m last year, according to the American Lawyer Magazine.
Insiders said that most lawyers have an idea of where they stand with the firm’s management, but uncertainty can lead partners to assess their options.
“Some guys pick up the phone more around this time,” said one partner, referring to calls from headhunters.
“Sometimes people leave, but it is rare at the share partner level,” another partner said.
Kirkland partner pay does not tend to change radically between reviews, the people familiar with the firm said.
“It is not like it yo-yos like at an investment bank; it is a merit-based assessment, but it takes a long-term view,” one of the partners said. “People can go up or stay at the same level; it is rare people go down unless they are moving to the end of their careers.”
“There have been one or two dramatic cuts,” the ex-partner said. “Kirkland doesn’t tend to do big hints, so any big cut would be delivered with a very blunt message.”
Kirkland’s non-share partners are also on tenterhooks, with promotions to the firm’s lucrative equity partnership also set to be communicated in December.
Kirkland promotes hundreds of junior lawyers every year to its salaried partner rank — called non-share partners in the firm’s terminology. They then have three years to prove their worth and clinch promotion to equity partner — known as share partners at Kirkland.
Most do not make the cut and leave the firm. For those who do get promoted it is a life-changing event, but it remains uncertain down to the last minute for most partners.
“You are hoping, and you are told by the people pushing for you, that it should be alright, but you won’t know until you get the call,” the ex-partner said.
Non-share partners are paid around $600,000 a year, which jumps to $1.5m in their first year of promotion to the equity. They then join Kirkland’s merit-based profit sharing system, with early-career partners subject to annual pay reviews.
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Those who miss out on promotion tend to leave the firm in search of a partner berth elsewhere. Despite their relatively junior standing, Kirkland non-share partners are seen as an attractive hire by rival firms.
“The market doesn’t discount you being a non-share partner at Kirkland the way it discounts you being a counsel in another law firm,” one legal recruiter said. “They get exposed to the best work, the best clients, they develop their contacts, they get some of the best experience going and they end up everywhere, and they end up on good packages.”
The firm promotes swathes of lawyers to non-share partner — 193 in October — but only a select few make the jump to its equity tier.
“There are not that many made up every year; it comes down to the conversation in the room,” the ex-partner said.
To contact the author of this story with feedback or news, email James Booth