Often the bellwether for global law firm financials, the world’s highest-grossing firm, Kirkland & Ellis, has posted muted revenue and profit growth for 2022, with turnover up 8% and partner profits up just 2% – its slowest performance year-on-year for some time.
Kirkland made major waves in the legal sector last year, when a 25% surge in revenue saw it become the first law firm to pass the $6bn revenue mark. Its 2022 financials show a further increase, though a more modest one, with a steady rise of 8% to $6.5bn. This more modest growth was also evident in PEP, which went up 2% to $7.5m, after jumping 19% to $7.4m in 2021. Revenue per lawyer, meanwhile, declined 5%, to $1.9m.
The firm’s increase in headcount partially explains these figures. The firm’s total number of lawyers rose by 13% in 2022, compared to 11% the previous year. The largest growth was in the number of non-equity partners, which went up 16% to 881 – the firm announced a record 193 partner promotions in October 2022 – a 28% increase on 2021. Meanwhile, the number of associates increased by 15% to 2,029, while the number of equity partners grew just 3%, to 505. These overall increases come despite two rounds of cuts to its lawyer headcount, in autumn 2022 and after performance reviews in spring 2023.
While less impressive than its landmark 2021 results, Kirkland’s 2022 financials remain healthy at a time when a global slowdown in transactional work has seen some international firms post declines. Private equity, a core practice area for Kirkland, cooled down after a roaring 2021, though many in the market believe that a combination of significant cash reserves held by investors and more favourable economic indicators will soon produce a bounceback, and firms continue to make hires in the area, both in London and globally.
Kirkland was also active in the London lateral hiring market over the last year, with recruiter Fox Rodney reporting 14 partner-level hires in calendar year 2022, leaving it as the most active US firm and the second-most active firm overall, behind Eversheds Sutherland. However, it was also second in London partner departures, with eight, behind Brown Rudnick’s 10.