Kirkland & Ellis, the world’s highest-grossing law firm, has cut a number of associates across offices in California and Texas after performance reviews, making it the latest firm to slim headcount amid a collapse in dealmaking.
Kirkland, a giant with more than 3,000 lawyers, cut associates in California, Utah, Texas and Chicago last week after the reviews in March, according to two people familiar with the matter. The news was first reported by The American Lawyer.
Kirkland said the cuts were “not lay-offs” but “performance-based decisions resulting directly from our attorney review process, just like we do every year for all attorneys at all levels.”
The cuts come as corporate law firms grapple with a sharp decline in global mergers and acquisitions caused by a darkening economic outlook.
A number of the tens of lawyers that Kirkland let go had been hired to field soaring demand during the early part of the pandemic, when government stimulus measures and access to cheap debt fuelled a boom in M&A, the two people said. That boom helped push the group’s revenue to a record $6bn in 2021, its most recently reported financial results.
One corporate associate said: “The majority of the folks I have heard of being let go were lateral hires” adding “our Salt Lake City office was lateral heavy”.
He said: “I got the sense it wasn’t a surprise to any of those folks [to be let go.]” The dismissals follow so-called mid-year reviews, which affect only a subset of lawyers who were called back following a performance review last year.
Another US-based M&A associate said he had noticed a “drop-off in work”, from “overloaded to normal”.
According to data from Leopard Solutions, Kirkland added 255 private equity associates between the first quarters of 2020 and 2022. That headcount dropped from 601 to 518 between March 2022 and the same month this year, however.
One recruiter who asked not to be named said Kirkland was “not a warm and fuzzy place . . . They’re in this to make a profit and you’ve got to run with the pack.”
Affected Kirkland lawyers will receive four months’ pay and benefits, and will remain on the firm’s website for a period of time while they look for other jobs, the people said.
The update comes after other US law firms axed staff in response to gloomy markets and job cuts in the technology sector. Cooley, the Silicon Valley outfit, Goodwin Procter, Davis Wright Tremaine, Stroock & Stroock & Lavan and Shearman & Sterling have all cut jobs this year.
The first Kirkland associate said the firm was dealing with a slowdown in private equity deals by moving lawyers into busier areas such as restructuring, or secondary deals in which funds tried to secure liquidity.