Remember Y2K? The Millennium bug, the crash of the Euro, Bush v Gore. It was the year that Clifford Chance became “the world's first global law firm”, as it elegantly put it, following its tripartite merger with Germany's Pünder Volhard Weber & Axster and New York-based Rogers & Wells. In the years that followed, we’d witness a commodities boom that ushered in the era of the millionaire lawyer, firms going truly global, and the dawn of the billion-dollar law firm—Clifford Chance being the first. In this spendthrift climate sprouted a phenomenon that a firm little known on the international stage would soon exploit to dramatic effect: the rise of businesses unperturbed by surging legal fees. By 2010, Jeffrey Hammes was Kirkland & Ellis’ chairman, an entrepreneurial leader under whose stewardship the firm optimized its relationships in the private equity, restructuring and litigation worlds, and complemented these relationships with shrewdly calculated risks, cementing ground-level ties with younger, less-tested outfits like Vista Equity Partners. Restructuring and litigation have always been areas in which clients have diminished bargaining power when it comes to fee negotiation. In times of distress, client leaders can either go with Kirkland, and pay for the privilege to get the job done in their very best interests, or not. And during the private equity boom, spurred by record deal values and volumes, legal fees were scrutinized less than in the past. Fast-forward to 2021, Kirkland is the first law firm ever to cross the $6 billion threshold, having admirably cornered the private equity market, offering its own-brand expertise and deal structures to its exceedingly well-heeled clients. But do events of the past week suggest we have passed the peak in Kirkland’s extraordinary growth story? |