Kirkland & Ellis is overhauling its equity partner exit terms – ushering in new policies to withhold compensation for departing partners, as well as slashing notice periods and speeding up the time it takes those leaving to be repaid their capital.

Partners are understood to have unanimously approved the changes earlier this week (16 July), with the move, first revealed by Financial News, meaning equity partners leaving the firm could potentially see millions in accrued compensation withheld by Kirkland, where average PEP stands at nearly $8m and stars are paid significantly more.

Until now, Kirkland has withheld 55% of equity partners’ annual compensation until the following year. The new policy grants Kirkland the option of withholding this accrued compensation from departing partners altogether. It will be at Kirkland’s discretion whether it chooses to withhold the distributions.

In addition, the firm has also approved a change that will reduce the notice period for exiting partners from 120 days to 60 days, effectively returning Kirkland to the notice period it had prior to 2016.

The firm has also slashed the time those leaving will have to wait for their capital to be repaid from 12 months to three months.

The changes to Kirkland’s exit terms on its partnership agreement come after the firm saw a string of high-profile departures to Paul Weiss in London last year.

Debt finance partner Neel Sachdev and buyout partner Roger Johnson left to launch an English law practice for Paul Weiss, going on to bring in equity partners including Timothy Lowe (tax) and Matthew Merkle (capital markets), as well as several non-equity partners.  For more on Kirkland and Paul Weiss, see LB’s feature ‘Market forces: Paul Weiss, Kirkland and the war for London talent’ . 

With new firms likely having to pick up the cost of any potential profit distributions withheld from new recruits, the overhaul will make it more costly to add lateral teams from Kirkland in future.

Danielle Crawford, a partnership counsel at Forsters, said that in practice departing partners would likely not lose out personally because of the change, with their new firms instead picking up the additional cost of matching the withheld distributions.

She told Legal Business: ‘Talking about the discretion to withhold distribution payments for departing partners is very common across the bigger firms especially Kirkland’s competitors. It makes it less attractive for partners to leave, if a firm wants to poach a partner, they might have to make good that loss to persuade the partner to leave.’

Meanwhile speeding up the time it takes to get departing partners out of the door and to receive their capital back will save Kirkland money and it will also be better for firm culture, according to partnership experts.

‘Prolonged departures are not good for team morale/key firm-client relationships,’ added Crawford. ‘There is also a higher risk that the departing partner can take more business from the firm if they continue with client work for a number of months after they have decided to leave.’

Another partnership lawyer said: ‘When someone is so disaffected it’s best to get them out sooner rather than later rather than having them hanging around for a longer period.’

Partners suggest reducing the notice period and time taken to repay capital could well have been sweeteners for partners to get the changes over the line and boost retention. They also bring the firm in line with other firms, which have increasingly been looking at exit terms. Linklaters for example discussed withholding profit from departing partners before deciding against it.

‘It is increasingly common, particularly for the large, high earning US firms,’ said Jon Haley, head of professional partnerships at Farrer & Co.

He added: ‘It has not historically been common in UK legal partnerships but you do not have to look hard to find similar Bad Leaver mechanisms – whereby retained value in some form or other is forfeited on exit – in other high earning sectors such as private equity and financial services, so in some ways the legal profession could be said to be lagging behind and I suspect others will follow soon.’

elisha.juttla@legalbusiness.co.uk

tom.cox@legalease.co.uk

The post ‘When someone is so disaffected it’s best to get them out sooner rather than later’: Kirkland to hold back pay for departing partners; cut notice period appeared first on Legal Business.

Kirkland & Ellis, Paul Weiss and Slaughter and May are advising on the proposed takeover of the Royal Mail’s parent company, International Distributions Service (IDS), by Czech billionaire Daniel Kretinsky. 

The deal is a revised non-binding proposal from EP Corporate Group for the remaining share capital of IDS which is not already owned by EP, which at present, holds 27.6% of IDS’s issued share capital.  

The proposal values the entire issued share capital of IDS at approximately £3.5bn.  

EP is being advised by Kirkland, with a team led by corporate partners David Higgins, Dipak Bhundia and Jiri Peterka, alongside antitrust & competition partner Matthew Sinclair-Thomson. 

Paul Weiss is also advising EP, handling financing and structuring aspects of the bid, with finance duo Neel Sachdev and Stefan Arnold-Soulby, leading the firm’s team.

Slaughters corporate duo Richard Smith and Claire Jackson are advising IDS’s management.  

In an announcement to the London Stock Exchange, IDS chair Keith Williams said: ‘The Board is minded to recommend this offer price, which it considers to be fair and reflects the value of GLS’ current growth plans and the progress being made on change at Royal Mail to adapt the business to a significant fall in the demand for letters and growth in parcels.  

‘It is however regrettable that despite four years of asking, the Government has not seen fit to engage in reform of the Universal Service and thus improve our financial position and ensure that Royal Mail could provide an economically sustainable service to the British public.’

holly.mckechnie@legalease.co.uk

The post Kirkland, Paul Weiss and Slaughters lead on £3.5bn Royal Mail takeover bid appeared first on Legal Business.

In the contest for the biggest legal story of the moment, the A&O Shearman merger may be more transformational for the firms involved, but it is fair to say it has not quite captured the imagination like Paul Weiss’s dramatic and audacious hiring spree in London.

‘The question is whether a firm can genuinely build an elite PE practice by lifting out the top guys from different shops,’ muses one US firm partner, on Paul Weiss’s bid to crack London.

‘The only other space where you see this sort of super high-value team move is in professional sports,’ another adds breathlessly, before questioning whether it will ‘all come crashing down’.

It is exceptionally early days, but the indications so far suggest otherwise. Since news first broke last summer that Paul Weiss was to make its long-awaited English law launch in the capital with the head-turning hires of a Kirkland team including debt finance star Neel Sachdev and private equity (PE) partner Roger Johnson, Paul Weiss has grown to no fewer than 140 lawyers, including some 12 partners from Kirkland (although it is important to say only four of these were in the equity at the Chicago powerhouse). And it has not finished yet.

‘The excitement and electricity surrounding our London office is extraordinary,’ remarks Brad Karp, chair of Paul Weiss, who says the firm is fielding ‘daily enquiries’ from leading partners at other firms.

‘Our PE clients in particular had urged us to broaden our platform and provide a credible and effective London solution. This opportunity was a strategic godsend and we jumped at it.’
Brad Karp, Paul Weiss

Little wonder given the salaries whispered to be on offer for lawyers at the Wall Street firm’s glamorous new base in the West End, where it can be closer to PE clients like Apollo, Bain Capital and KKR. While the firm will not comment on compensation, Sachdev and Johnson have joined on deals reportedly worth close to $20m apiece.

Meanwhile, senior figures at rival firms grumble that the scale of Paul Weiss’ ambitious hiring and the generous comp packages on offer for lawyers of all levels have amplified City salary wars to such a height that even some large US firms are wondering how to compete or whether they should wait for things to calm down.

They complain the problem has been exacerbated further by Kirkland (which also does not comment on lawyer pay) allegedly significantly pushing up some partner equity allocations and associate comp packages to encourage some to stay.

So far, Paul Weiss has added M&A, debt financing, high-yield capital markets, IP, tax and competition expertise in London, with litigation, funds and restructuring hires also on the cards for office heads Sachdev and Johnson, who also serve as co-chair of the firm’s global finance and capital markets and M&A practices respectively.

The rapid recruitment means that in little more than six months Paul Weiss has achieved a scale in London that puts it roughly on par with Gibson Dunn, Cleary or Greenberg Traurig. It is only some 30 lawyers behind Paul Hastings, which is one of the fastest-growing firms in London by lawyer headcount over the last five years, according to Legal Business’s Global London survey.

Crucially, many of the partners joining the firm previously worked with Johnson when he was at Linklaters (2002-15) or with both of them at Kirkland (which Johnson joined in 2016). Many are lifers at their former firms.

‘They are hiring who they know, and they have barely paid any recruiter fees,’ laments one legal recruiter.

This explosive growth is all the more remarkable given that since opening in London in 2001 the firm had only ever made one City lateral partner hire – that of corporate heavyweight Alvaro Membrillera in 2017 from Simpson Thacher & Bartlett.

In fact, the firm’s London team was so small last year that, in the days between Membrillera’s shock swap to Kirkland and news of Sachdev and co joining, one senior industry figure described Paul Weiss to Legal Business as ‘not having enough partners in London for doubles ping-pong’.

Karp is open about some of the issues the firm has faced in its attempts to grow in London in the past. He comments: ‘For several years, we attempted to scale our London office and develop UK law capability to meet the increasing needs of our large public company and PE clients, but we were unable to find partners with the requisite talent and market reputation who were also cultural fits.

‘Our PE clients in particular had urged us to broaden our platform and provide a credible and effective London solution. This opportunity was a strategic godsend and we jumped at it.’

With a commitment to use the firm’s very large cheque book to fund the growth and Sachdev and Johnson at the helm, Karp looks to have found his solution to the previous problems.

Internal politics

If lateral hiring of this scale is unprecedented in London, so too is seeing the unstoppable Kirkland thrown even slightly off course. While partner departures are nothing new, particularly from Kirkland’s large salaried rank, the firm usually gains headlines for its bold hiring from the Magic Circle, rather than exits on this scale.

Add in the drama around the way the moves panned out, and it is no surprise that interest has been piqued across the City.

In truth, both Sachdev and Johnson had become disenchanted with Kirkland and its direction for some time; concerned about the scale of recruitment at Kirkland, that rank-and-file partners in London were not getting a say, and the impact of the expansion on office culture.

The charismatic Sachdev, who joined Kirkland in 2003 and is said to have had a close relationship with former Kirkland chair Jeff Hammes, had played a large part in driving Kirkland’s phenomenal growth in London, helping to turn it into the 500-lawyer powerhouse that it is today.

Crucially, he helped influence this growth without ever sitting on the management board.

However, with no management position, some in the market suggest that in recent years his influence had waned amid a fallout with fellow banking partner Stephen Lucas (who sits on the global management committee along with London PE partners David Higgins and Matthew Elliott), as well as the replacement of Hammes as chair by Jon Ballis in 2020.

As has been widely covered in the press, it was the hire of Membrillera that tipped things over the edge and accelerated the departures of Johnson and Sachdev.

While talks between Sachdev and Paul Weiss were underway last summer, when Johnson found out in July that Membrillera was, in fact, set to join Kirkland as part of a push to strengthen its ties with KKR in Europe, he is understood to have argued with Ballis about the merits of bringing him in without consultation with the wider partnership.

Membrillera is often described as a Marmite figure in the market, and according to one partner, ‘no-one at Kirkland had even met him’.

On 1 August Johnson was fired by Ballis, accused of trying to lead a team move to Paul Weiss. Ironically, it was this decision that ultimately accelerated Sachdev’s own move to the firm and those of the team that followed, including Johnson (see box, below).

Sachdev rapidly added Kirkland equity partners Matthew Merkle (capital markets) and Timothy Lowe (tax) before he and Johnson went on to add big names from Linklaters including Nicole Kar (competition), Dan Schuster-Woldan (M&A) and Will Aitken-Davies (M&A), as well as PE star Christopher Sullivan and acquisition finance partner Taner Hassan from Clifford Chance.

Less scale, culture and quality

With further lawyers following from Kirkland, Paul Weiss’s build-out around PE has only served to increase comparisons with Kirkland; as has the fact that Paul Weiss is considering introducing a salaried partner rank that would align it better with other US firms like Kirkland, or Cravath, which announced plans to introduce a similar tier in 2023.

But there are key differences between them. While Paul Weiss’s growth has been rapid, its longer-term vision is not to become a huge firm in London.

Insiders point to the fact that almost every new partner hire has worked with at least one other at some point before and all have been chosen by partners in London, meaning there are no ‘unknowns’ that could negatively impact on culture or performance.

As one London partner comments: ‘We are not focused on being the biggest, but the best, both in terms of excellence and firm culture in London.’

The firm has also already added a presence in Brussels, recruiting Macfarlanes partner Richard Pepper (who will split his time with London) and Ross Ferguson from Simpson Thacher, underscoring its commitment to rapidly building up a practice in key European centres.

‘Law firms used to have one totemic partner for each client, but now you need a deep bench to look after key relationships. Kirkland isn’t about individuals, but about a collegial team.’
David Higgins, Kirkland & Ellis

The Kirkland difference

In contrast, Kirkland’s more heavily managed growth emphasises the need for a deep bench of lawyers and clients across the full spectrum of the PE market to better hedge the practice.

The firm’s scale both in terms of partner numbers and breadth of client base make it unrivalled in the PE market and it would take significantly more departures – or a big shift in attitude from its client base – for anything to change this.

Since 2013 the firm has seen revenues soar from $1.6bn to $7.2bn last year, with profit per equity partner up from $3.3m to $7.5m.

Over the same ten-year period, the firm has almost quadrupled its London headcount from approximately 127 lawyers to 501 as of January 2024. It has added new practice areas, including ESG and infrastructure over the last 18 months alone.

And its approach has not changed since news broke of the team exits.

In addition to Elliott and Higgins being involved in the recruitment of Membrillera, the firm has also shored up its debt finance practice with the recruitment of highly regarded duo Ian Barratt and Sinead O’Shea from Simpson Thacher. Including Membrillera the firm has added nine partners since the Paul Weiss raid, spanning practices including M&A, tax, investment funds, capital markets and banking. By any other standards a remarkable pace of recruitment of its own.

‘We’ve continued to grow over the last six months,’ says Elliott. He adds: ‘When I moved here [from Linklaters] just under a decade ago, Kirkland was already a leading firm in private equity. Since then, our M&A team in London has grown to over 120 lawyers in order to support the continued growth of the private capital market.’

While Kirkland initially moved to reassure clients that its service would not suffer as a result of the Paul Weiss exits, evidence of its strengthening ties with key buyout houses over the period include its role for KKR on its €22bn acquisition of Telecom Italia’s fixed-line network in November 2023 and advising Actis on its sale to General Atlantic in January this year.

Freddie Lawson, head of partner search at Montresor Legal, says: ‘Change is always scary, but Kirkland’s hire of Ian and Sinead shows the firm is open to new opportunities, especially deepening the relationship with KKR.’

Despite the market chatter about the drama around the exits, it is notable that few are suggesting any long-term impact on the Chicago firm given the breadth of its institutionalised client relationships.

As one leader of a US firm in London comments: ‘There had been a longstanding rumour of dissatisfaction in certain groups within Kirkland. And maybe it was inevitable that they’d lose Neel and Roger. So I think probably for Kirkland in some ways, it’s helpful for them because then they can probably calm down some of the apparent divisions that were happening there.’

One former Kirkland partner adds: ‘People were more worried about the uncollected time that hadn’t been billed, and the other big gripe was non-competes and notice periods.’

City management and culture

Kirkland’s culture has long been a topic of debate given the size of some of the personalities within the firm, but both Elliott and Higgins are dismissive of speculation on this.

‘Collaboration is key to our culture,’ says Elliott. ‘It’s a really collegiate, team-first approach that helps ensure young partners can come through to inherit and continue to build on our strong franchise. The only way you can run a growing and dynamic business like ours is if you have lawyers who want to work as one team, and we’ve found a lot of success in this model,’ he says.

Higgins argues that the way PE houses are structured, combined with the volume and size of their mandates, necessitates multiple partners working together across client relationships – and that Kirkland actively recognises and rewards this collegiate behaviour.

He says: ‘Law firms used to have one totemic partner for each client, but now you need a deep bench to look after key relationships. Kirkland isn’t about individuals, but about a collegial team.’

He continues: ‘Private equity has a bright future, but the market has evolved. The secret for law firms is to have a diversified client base and treat every client with importance; at times when large cap is down, mid cap can be busy and the other way around. It’s about having a big diverse business and people within it who are willing to pivot.’

On why most partners choose to stay at the firm, Elliott adds: ‘It comes down to the business proposition. The Kirkland platform lets you be the most successful version of yourself. People stay because they see the value of being on this platform,’ he concludes.

Having been one of a small number of London partners in the loop on the hire of Membrillera while discussions were still at a confidential stage, Elliott is equally keen to dismiss negative comments about Membrillera, whose negotiating style has sometimes seen him criticised for being ‘difficult’ to work with.

‘Alvaro is super-smart and engaged, speaks with authority and has high standards. Since he joined, he’s knocked it out of the park on every metric, but most of all culture – he’s thoughtful, team-based and collaborative.’

Despite the ongoing debate around the degree of influence wielded by Kirkland’s Chicago headquarters over its London office, it is notable that many recruitment decisions – such as the addition of the three-lawyer infrastructure team led by Sara Pickersgill – have been led by London, with London also driving discussions with Barratt and O’Shea.

Deals don’t lie

With PE partners across the City expecting activity levels to pick up after a slow 2023, in truth, the future looks promising for both firms in London.

While some PE partners suggest clients may tire of paying the high charge-out fees of both firms, and other partners are quick to point out the risks of building a practice focused only on PE, there is nothing new in either of these arguments, whichever firm they are levelled against.

For Paul Weiss, the amount of capital the firm is willing to invest has ensured demonstrable short-term recruitment success and the firm is already making significant inroads with clients, working on some 150 client matters so far.

As Karp comments: ‘The legal market has become a star system, with clients increasingly hiring star lawyers (as opposed to law firms) to handle their most consequential matters.  Our recent star hires in London, and the market’s immediate reaction to our hiring of these market leaders, reinforce this point.’

In the longer term, though, the firm still needs to prove that it can bed in the team and culture to ensure lasting success.

‘Eventually, the headlines will fade and the hard work of building a sustainable business will begin,’ says one PE partner. ‘While the venture in London shows promise, it’s still new and it will take more than a year to see if they can sustain their presence.’

Another ex-Kirkland partner notes that this is a ‘test case’ as to whether such a top-tier practice can be pulled together at such speed, and that only time will tell whether it all falls into place.

Whatever the gossip, the real battle is not between Kirkland and Paul Weiss, but rather between all of the firms trying to compete in an increasingly dynamic PE market. This is the case for both star partners and associates, who now have yet another well-paid US recruitment option available to them.

‘It’s clear Paul Weiss is making a serious incursion into the market where Kirkland has operated so well in recent years. With the war for top talent even more pronounced, other global elite firms are likely to feel under significant pressure,’ notes one US practice head.

Whatever happens, success or failure will be easy to track both via deal advisory roles and Legal 500 rankings. For what it is worth, Kirkland currently has 47 lawyers ranked in London, compared to ten for Paul Weiss.

As Higgins concludes: ‘Deals don’t lie – the market is the true barometer of whether you’re doing the right thing’. LB

Return to the Global London contents.

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Clandestine conversations, a recruitment strategy on steroids, eye-watering salaries and internal politics galore, the Paul Weiss/Kirkland story has enough drama in it to keep the attention of even those outside the legal market.

For City partners, the interest in what’s going on has been off the scale.

While there had been rumblings of discontent in the Kirkland ranks for some time, Paul Weiss swooping in for one of London’s most high-profile debt partners in Neel Sachdev was a headline move to surprise even the most seasoned City-watcher.

Paul Weiss has managed to out-Kirkland Kirkland with its torrent of targeted investment.

Going on to recruit an entire fantasy football squad from an array of top firms over the next six months – not to mention the very public leaking of the factors that drove Sachdev and M&A partner Roger Johnson into the arms of their elite New York suitor – took interest to a new level.

With its aggressive – and seemingly insatiable – lateral recruitment strategy, Kirkland has long been one of those firms that rivals love to criticise; an outlier in terms of its volumes of talent acquisition, even in busy recruitment markets. Yet after years of speculation, but almost no sign of any action, Paul Weiss has managed to out-Kirkland Kirkland with its torrent of targeted investment in London.

Here’s the thing, though; even with 12 partner departures to Paul Weiss alone, Kirkland was still one of the fastest growing firms by partner count last year, as our Global London survey highlights. And, if anything, its resolve to keep building up around private equity only appears to have been strengthened. No need for rallying the troops or worries about how to rebuild for a firm with the scale, bench strength and, crucially, the profitability of Kirkland – it will no doubt remain as big a draw as ever.

The same is not true of some of the other firms to have been plundered by Paul Weiss, however.

Overall recruitment may have slowed across the Global London firms, but there’s still very much a war for talent at the top end of the market, particularly in areas such as PE. It isn’t so much between Paul Weiss and Kirkland though – it’s between them and everyone else who wants to stay in this game but who doesn’t have the profitability or the partnership buy-in to throw money at the problem. And such a bold play by Paul Weiss means this could now include top US firms in London, as well as the proud but less-profitable UK leaders, which have been the primary target for talent poaching for so long.

But while Kirkland will, of course, be more than just fine after all of this has died down, it has had to face up to an unprecedented level of scrutiny into its culture, including questions about just how involved the London office is in decisions around recruitment and the extent of divisions within its partnership.

You can read both sides of the story in our feature, but there are clearly some very sage lessons for all firms around communication here. Just ask Allen & Overy’s outgoing senior partner Wim Dejonghe (see Life During Law), who learnt some hard lessons about communication during the firm’s failed talks with O’Melveny & Myers – consult too early and too widely and risk a handful of discordant voices scuppering things; or, as with Kirkland, fail to bring everyone along and prepare to deal with the fallout.

georgina.stanley@legalease.co.uk

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Prominent high-yield partner Kevin Muzilla has retired from Allen & Overy, in the latest departure from the practice ahead of next month’s A&O Shearman mega-merger.

Ranked in the Legal 500 Hall of Fame for London high-yield, Muzilla joined A&O from Milbank as a partner in 2009, and has since headed up the firm’s leveraged finance teams, first the US and then Europe.

He has been active in the European high yield market since its inception, and has been involved in many market-defining deals, including advising the
underwriters on what was the largest Russian LBO financing in history
– the acquisition of Russian transportation group FESCO, which won the Legal Business Finance Team of the Year award in 2014.

His departure follows that of Marwa Elborai, also a Legal 500 high-yield leading individual, who left for Kirkland & Ellis last month after joining from Shearman in late 2022, while fellow high yield grandee Ward McKimm recently confirmed he would be retiring from Shearman ahead of the 1 May combination with A&O.

Another high yield specialist partner, Jeanette Cruz, also left A&O last August, according to filings on Companies House.

A&O said in a statement: ‘We would like to thank Kevin for the contribution that he has made during his time at A&O and wish him all the best for the future.’

A&O’s London high-yield bench is by no means totally depleted. Prominent partners remaining include US-qualified John Kicken, who joined in 2014 from Cravath, and Brad Weyland, who came in as a partner in 2021 from Latham & Watkins, where he was a counsel.

The magic circle firm is currently gearing up for the completion of its combination with Shearman; a deal which is of driven in large part by complementary finance expertise at both firms. Shearman’s London office includes Legal 500 high-yield leading individual Trevor Ingram and next generation partner Gordon Houseman, who made partner at the US firm in 2015 and 2021 respectively.

Elborai’s departure to Kirkland was followed last week by the news that A&O debt finance partner Vanessa Xu, who was made up in 2017, would also be joining the US firm’s London office.

However, these departures are to be offset by the first combined round of partner promotions at A&O Shearman, with 40 new partners announced in a joint press release issued today (8 April).

Of these, 32 come from A&O and eight from Shearman. This balance was ‘consistent with the relative size of the two firms and their geographic footprints’, the press release said, with A&O’s 80% share in line with its 78% share of the merged firm’s total headcount, according to data from last year’s Global 100. Last year A&O promoted 36 partners with 12 in the UK, while Shearman promoted ten, with one in the UK.

All nine of the new London partners came from A&O, with three each in banking and corporate. Thirteen have been made up to partner in the US, including five from A&O and eight from Shearman. The total also included 13 new partners in continental Europe, four in Asia, and one in the Middle East, all of which were from A&O.

Banking was the biggest overall practice area with ten promotions all from A&O. Corporate was in second with nine, including eight A&O corporate partners and one Shearman M&A partner. The new partners also included six in litigation, five in international capital markets and four in tax.

Full list of partner promotions:

Allen & Overy

New York
Lena Kiely, International Capital Markets
Puja Patel, Corporate
Derek Poon, International Capital Markets

Washington DC
Michael Sykes, Banking
Gideon Wiginton, Banking

London
Tim Bates, International Capital Markets
Imogen Carr, Corporate
Vanessa Morgan, Management
Rebecca Noble, Banking
Rachel O’Reilly, Banking
Kate Pumfrey, Litigation
Alex Shandro, Corporate
Jason Symington, Banking
David Weaver, Corporate

Brussels
Axel de Backer, Banking

Amsterdam
Luke Whibley, Banking

Paris
Laurie-Anne Ancenys, Corporate
Charles del Valle, Tax
Anne-Caroline Payelle, Corporate

Duesseldorf
Catharina Glugla, Corporate

Munich
Rauni Ahammer, Banking

Frankfurt
Tim Drach, Tax
David Schmid, Litigation
Sebastian Schulz, Litigation

Luxembourg
Baptiste Aubry, International Capital Markets
Franz Kerger, Tax
Madrid, Spain
Ishtar Sancho, Tax

Dubai
Arash Koozehkanani, Litigation

Jakarta
Mohammad Andrew, International Capital Markets

Singapore
Matthew Del Rosso, Banking
Jessica Lee, Banking
Ayesha Thapar, Corporate

Shearman & Sterling

New York
Melisa Brower, Compensation, Governance and ERISA
Jonathan Cheng, Antitrust
Joshua Ebersole, Litigation
Jai Garg, Compensation, Governance and ERISA
Christopher Glenn, Mergers & Acquisitions
Leila Siddiky, Litigation

Washington DC
Brian Hauser, Antitrust

Austin
Michelle Kwan, Emerging Growth

The promotions are broadly balanced along gender lines, with 23 men (57%) and 17 women made up.

alexander.ryan@legalbusiness.co.uk

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Paul Weiss has broken through the $2bn global revenue mark, posting a 10.8% hike on last year, as the firm’s bold London recruitment drive continues to make headlines.

The firm’s 178 equity partners took home an average of $6.5m in 2023, with profit per equity partner (PEP) up 14.8% from $5.73m the previous year.

Overall profit came in at $1.17bn, while revenue per lawyer was up 5.3% to $1.98m from last year’s $1.88m.

In recent months, Paul Weiss has recruited some of the City’s biggest hitters, among a total of 17 partner hires. Most have joined from Kirkland & Ellis, following the defections of debt finance superstar Neel Sachdev and big-name corporate partner Roger Johnson in August. The duo joined to lead the US firm’s London office, initiating a wave of hires aimed at building up a substantial English law practice.

Sachdev brought with him a Kirkland team including debt finance partner Kanesh Balasubramaniam and capital markets partners Matthew Merkle and Deirdre Jones, while Johnson has assembled an M&A practice with ex-Kirkland partner Andreas Philipson, as well as a tax practice featuring former Kirkland partners Timothy Lowe and Cian O’Connor.

Other names joining from Kirkland have included debt finance partner Stefan Arnold-Soulby and technology and intellectual property transactions specialist John Patten.

Paul Weiss has also targeted the Magic Circle, starting with the hire of Linklaters M&A partner Will Aitken-Davies in September. Notably, Lowe, O’Connor and Patten also had stints at Linklaters.

In December, it came as no surprise when Paul Weiss hired from Linklaters again, bringing on Nicole Kar, the former head of the Magic Circle firm’s antitrust and foreign investment practice. Adding to the Linklaters alumni, the following month the firm hired public M&A partner Dan Schuster-Woldan.

Clifford Chance has also been a target, with high-profile private equity partner Christopher Sullivan and acquisition finance partner Taner Hassan coming over in December, and just last week (18 March), junior private equity partner Oliver Marcuse followed suit.

Outside of the Magic Circle, Paul Weiss has also hired former Ropes & Gray competition partner Annie Herdman, who also served at Kirkland earlier in her career.

The recruitment drive has seen a complete changing-of-the guard for Paul Weiss in London, which has had a modest City presence without English law capability since 2001. Last May deputy London head Ramy Wahbeh and corporate partner Kaisa Kuusk both left to join Sidley, followed by the departure of London managing partner Alvaro Membrillera to Kirkland in early August, a move which was one of a number of factors which sparked the flurry of moves in the opposite direction.

On the back of the new additions, the firm announced in October it was set to move into Twitter’s former UK headquarters in Soho.

Recent London deal highlights for Paul Weiss have included advising General Atlantic on its acquisition of a majority stake in coffee shop Joe & the Juice from Valedo Partners, with Johnson and Balasubramaniam working alongside partners in the US.

The seven billion dollar law firm

Despite the departures in London, Kirkland has consolidated its position as the largest law firm in the world, with global revenue increasing by 10% last year to $7.2bn, according to The American Lawyer.

The firm’s 539 equity partners took home an average of $8m as PEP increased 5.8%, with overall profit standing at $4.3bn. RPL also increased by 7.5% from $1.9m last year, to $2.05m.

As well as highly regarded private equity partner Membrillera, the firm has made a number of other significant recent additions to its team, including debt finance partners Ian Barratt and Sinead O’Shea, who joined from Simpson Thacher & Bartlett, while Herbert Smith Freehills ESG head Rebecca Perlman also recently came on board in London.

O’Shea, alongside London debt finance colleague Jerome Hoyle, were recently part of a global team advising KKR on financing for its voluntary public takeover offer to all shareholders of Encavis, a leading German wind and solar park operator.

The firm’s restructuring team has also handled a number of significant mandates of late, such as advising global engineering and construction business McDermott International on the cross-border restructuring of around $2.6bn of the group’s secured debt facilities.

In 2023 Kirkland also opened a new office in Riyadh, recruiting corporate partner Noor Al-Fawzan and capital markets Manal Al-Musharaf from Latham & Watkins and White & Case respectively, to join the 20th global office of the Chicago giant.

elisha.juttla@legalease.co.uk

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Kirkland & Ellis’ Sara Pickersgill on switching track from opera singer to infrastructure lawyer and why The Lion, the Witch & the Wardrobe offers salient lessons for a career in the City

Why did you want to be a lawyer and why infrastructure in particular? Has it delivered what you expected?

I didn’t initially set out to be a lawyer. I had maths, physics and music A-levels and went to Cambridge University on a choral scholarship. I quickly realised that I did not have the money to support myself pursuing my dream of being an opera singer so, after my first year, I switched to a degree in social and political sciences. On graduating, I had little desire to work in politics and I wasn’t sure my knowledge of the history of political thought from Plato through to Locke would otherwise have much application in the real world. I assessed my options and applied to various law firms for a training contract. I confess I was more than slightly surprised that I got some offers. I subsequently met my husband through a work colleague while I was a trainee so I am convinced that a career in law must have been fate!

I qualified into private equity in 2004, attracted to the buzz and pace of the deals and started focusing on the infrastructure space for PE sponsors.

I qualified into private equity in 2004, attracted to the buzz and pace of the deals and started focusing on the infrastructure space for PE sponsors and infra funds just as infrastructure was emerging as a separate asset class. As a junior lawyer I loved using my private equity training and skillset learning about assets that enable our day-to-day life and the regulatory regimes within which they operate. Roll forward 20 years and I still enjoy the combination of the commercial and technical nature of the transactions in infrastructure.

What have been the top deals of your career so far and why?

A few that really stand out are:

1. Advising 3i Infrastructure on the acquisition of Global Cloud Xchange, the largest private network of subsea fibre network cable in the world, operating in over 40 jurisdictions. The sheer number of jurisdictions and dealing with 40 different regulatory frameworks made it a very challenging deal to get done.
2. Advising DigitalBridge and Brookfield on the €17bn acquisition of Deutsche Telekom’s telecoms towers infrastructure business, a large deal with complex issues calling for the creation of commercial and workable solutions.
3. The sale of Electricity North West, one of the UK’s electricity distribution networks. The Labour opposition party, led by [Jeremy] Corbyn, published their plan for nationalisation of the UK’s energy networks just before binding bids were due, stalling the whole transaction. It took some time and negotiation and some creative structuring, but we ultimately managed to get the deal over the line.

What has been your proudest professional moment?

Seeing people I mentored over the years make partner. In May last year Emma Shelston, Eimear Coady and Michael Snook all made partner at different firms across the City. I was immensely proud. It made me realise that what we pass on to the people who follow us is far greater than anything we can achieve on our own.

What has been your biggest professional challenge and what did you learn from it?

Ten years ago, coming back from maternity leave at my former firm as a junior partner with a fledgling practice, and with only one other female M&A partner (out of a team of 40 or so corporate partners). Most people will take a period of time away from work at some stage in their career, be it a sabbatical or gardening leave, but what is particularly difficult about parental leave is that it often occurs when practices and client relationships are at their starting stages and not yet solidified. My experience made me determined to try to run my teams in a way that we can support people to take time away at crucial periods in their lives without being concerned about how to reintegrate when they are ready to return.

What is the best part about being an infrastructure partner?

Being at the centre of challenging and innovative transactions, all of which relate to assets that make society function. More often than not, our infrastructure team’s work involves transactions that are crucial to energy transition and others that are key for digital innovation.

Would you recommend a life in City law to your younger self?

Yes. It’s hugely rewarding, the work is challenging and interesting and I get to work with excellent colleagues and clients. But transactional work is demanding and inevitably there are some pressures along the way. It is important to ensure that you build the support you need around you, both in the office and outside of work.

What advice would you give to those who want to get to where you are?

Firstly, pick something you love doing and do it only for as long as you love it. Get noticed and don’t assume that it will just happen without getting out there and telling people, in an unarrogant way, what you are doing. And stay humble (because nobody is that important).

What do you think is the most important change that needs to happen in City law?

More diversity – law firms are taking the right steps, but it takes time and real commitment to change. But things are moving in the right direction.

What do you think is the biggest challenge facing your clients in the infrastructure sector?

Historically, the biggest challenge was the amount of capital chasing good assets. In the current macro environment, we have seen a real flight to quality, though this has presented opportunities to discerning fund managers to do innovative and creative bilateral deals around assets which may previously have attracted multiple bidders ending in a cost of capital shoot out.

And finally – what was your favourite childhood book and why?

C.S. Lewis – The Lion, the Witch and the Wardrobe: all about courage, friendship, loyalty, bravery and sacrifice. Good lessons for a career in the City! LB

For more in infrastructure, see ‘If you build it – firms put together infra dream teams as market booms’

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Just when the market thought Paul Weiss had eased up on its hiring spree in the run-up to Christmas, the firm has hired John Patten, a partner in the London technology and intellectual property (IP) transactions practice of Kirkland & Ellis.

The move sees the Wall Street giant continue to pursue with gusto the build-out of the English law practice that has gathered momentum in short order, much to the chagrin of the management of Kirkland and Linklaters, among others.

For his part, Patten, who is joining Paul Weiss as a full equity partner, has been a partner at Kirkland since October 2021, before which he was a trainee, and subsequently an associate at Linklaters.

His practice focuses on advising clients on commercial and corporate transactions in which technology and IP play a role, as well as advising on data protection compliance with European data privacy laws.

The hire brings Paul Weiss another step closer to establishing a top-flight corporate practice to complement the formidable finance practice brought over from Kirkland in August by rainmaker Neel Sachdev.

Sachdev, along with private equity star Roger Johnson who defected from Kirkland around the same time, are co-leading Paul Weiss’ London office. The M&A offering also includes former Linklaters partner Will Aitken-Davies and former Kirkland partner Andreas Philipson.

If the strategy for Paul Weiss in London is to eventually be able to service all areas of private equity, the plan certainly seems to be coming together.

nathalie.tidman@legalease.co.uk

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Roger Johnson, among the first wave private equity stars to defect to Kirkland & Ellis from the Magic Circle, has left the Chicago powerhouse’s London office.

The move was quickly followed by news that Kirkland has hired the well-respected private equity partner Alvaro Membrillera from Paul Weiss in the City, where he was London managing partner.

Johnson, a leading individual for high-value private equity according to The Legal 500, was Linklaters’ influential Nordic dealmaker when his departure in 2015 for Kirkland sent shockwaves around the market.

He was believed to have joined Kirkland on a $5m package after turning down an offer from White & Case and had as a key client Swedish private equity house EQT.

Johnson made the move from Linklaters to Kirkland hot on the heels of rising star Matthew Elliott the same year. His move also prompted other corporate partners to leave Linklaters, including the high-profile David Holdsworth and Stuart Boyd.

A spokesperson for Kirkland said: ‘We do not comment on personnel matters.  But we can confirm that Roger Johnson is no longer affiliated with the firm.  We wish him well in his future endeavours.’

For his part, Membrillera acts for private equity firms and their portfolio companies on cross-border M&A and leveraged transactions across Europe.

Jon Ballis, chair of Kirkland’s executive committee said of the hire: ‘Alvaro is one of Europe’s top private equity lawyers with substantial experience leading complex cross-border transactions for sophisticated financial sponsors. We’re very pleased that the Kirkland platform continues to attract leading talent like Alvaro, particularly in Europe, which is one of our fastest growing markets.’

nathalie.tidman@legalease.co.uk

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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.  

alex.ryan@legalbusiness.co.uk  

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