Will Kirkland's Lateral Hiring Streak Continue Under New Leader?
Insiders see plenty of reasons to expect Kirkland & Ellis to keep up its aggressive lateral hiring with Jon Ballis at the helm.
December 11, 2018 at 01:35 PM
4 minute read
When Jon Ballis assumes the title of chairman of Kirkland & Ellis' 15-partner global executive management committee in 2020, he will likely be leading a group comprising no fewer than six partners who began their careers at other firms, himself included.
Part of the legacy Jeff Hammes will leave at Kirkland after leading the firm for a decade is a willingness to pay top dollar for star lateral recruits—and also to entrust those partners with leadership positions. Jim Hurst, Andrew Calder, Stephen Lucas and David Higgins all joined Kirkland from rival firms since 2014 and are today part of the firm's leadership committee. Ballis joined from Sidley Austin in 2005, and David Fox, another committee member, came on board from Skadden, Arps, Slate, Meagher & Flom just before Hammes assumed the chairman title in 2009.
Those lateral hires, and plenty of others, have helped Kirkland rise to become the world's largest law firm by revenue, and one of the most profitable. Leaders of rival law firms will no doubt question whether Kirkland can continue its hiring spree without Hammes. They may be disappointed.
Internally, Hammes has been credited with convincing the firm's partnership that luring outsiders with big paychecks would raise their own level of performance and compensation. Belief in that model is expected to outlast Hammes' tenure, according to sources at the firm and others in the industry.
Kirkland will also have the cash to continue cutting big checks. The firm's financial engine—its private equity practice—continues to perform at a breakneck pace. Through nine months this year, Kirkland handled 234 private equity deals, more than twice its closest competitor, according to Mergermarket, which tracks deals. The firm also led the league tables in the value of the private equity deals it had worked on.
One current Kirkland partner said the firm's revenue is currently estimated to climb again this year by about 15 percent, assuming a successful collections season in December and January before the firm's fiscal year ends. Last year, The American Lawyer reported Kirkland's revenue rose 19 percent to more than $3 billion.
“A rising tide floats all boats,” said the partner, who requested anonymity to discuss the firm. “You're participating in increased value from all these 45-year-olds we went out and [hired]. But what really fuels that is the quality of the client base, the quality of the people you're working with, and momentum. Once you start really tearing the cover off the ball, then you've got a lot of money to pay new stars.”
One industry source said he expected Ballis would “stay the course” from a strategic standpoint. A source inside the firm said the larger transition of power at the firm had already occurred—from the litigation department to the transactional side.
Hammes became the firm's first leader from its private equity practice when he took the reins from trial lawyer Thomas Yannucci. Ballis is a leading private equity partner who has represented clients such as Illinois Gov.-elect J.B. Pritzker and Bain Capital.
“For other firms, it means the Kirkland threat of poaching isn't going away anytime soon and might get worse,” the industry source said.
Insiders say the biggest change following the transition may be Hammes and Ballis' differing personal styles. Hammes is often described as hard-charging, while peers have said Ballis is more reserved.
“Hammes is a phenomenon, an absolute bull of a man,” said one former partner. “Jon is quite a quiet guy.”
Whatever their personal styles, Hammes and Ballis have worked in tandem as recruiters for some of the firm's highest-profile laterals in recent years, according to three sources, with Ballis serving as the main contact for some of those hires. One industry source said Ballis' more reserved manner could be a benefit in negotiations with partners at silk-stocking firms.
“You're not coming out of Cravath and being quite like Jeff Hammes,” said one industry source. “So it would have been a one-two punch.”
Hannah Roberts contributed reporting for this article.
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