Photo: Diego Radzinschi/ALM

Kirkland & Ellis is poised to retain its perch as the highest-grossing law firm in the United States, cracking the $4 billion revenue mark for the first time in 2019, according to preliminary ALM data.

It's an astounding climb for the Chicago-founded law firm, which only surpassed the $3 billion threshold in 2017. Kirkland's 10.58% growth in overall revenue has the firm surging past Latham & Watkins, which Kirkland dethroned as No. 1 with its 2017 financial performance.

Latham had a strong 2019 as well, posting double-digit revenue gains for the second year in a row by boosting its top line by 11.3% to just over $3.76 billion. But with Kirkland generating $4.154 billion in revenue last year, the gap between the two is now as large as the entire annual receipts of many large firms.

Kirkland's head count also grew at a sizable 12.6% in 2019, leading revenue per lawyer to drop 1.8% to $1.59 million. But profits per equity partner were up again. In 2018, the firm's PEP crossed the $5 million threshold for the first time. In 2019, the average profits generated by each of Kirkland's 450 equity partners grew by 3.13% to $5.195 million.

According to ALM reporting, London was a fast-growing office for Kirkland in 2019, in terms of head count and revenue. The firm's London office grew by 3.3% to around 307 lawyers.

Kirkland declined to comment on its finances.

While 2020 results for all law firms are uncertain amid the coronavirus pandemic now, Kirkland's growth last year is another indicator that 2019 was a solid year of growth for the legal industry, building on strong performances across the industry in 2018.

Kirkland has continued to grow its mergers and acquisitions and private equity practice—a core strength for the firm. In 2018, Kirkland's lawyers handled at least 564 M&A transactions whose value totaled more than $276 billion, according to Bloomberg. That year, only Jones Day outpaced Kirkland in the number of announced deals it worked on; in terms of volume, Kirkland ranked 11th on Bloomberg's league tables.

Kirkland has only strengthened its position in the M&A and private equity world since then. The firm topped Bloomberg's league tables in 2019 by total deal count. The firm handled 664 announced deals, advising on more than $465 billion in transactions. The only firms that were ranked as having a larger market share in 2019 were Wachtell, Lipton, Rosen & Katz and Sullivan & Cromwell.

Among the deals Kirkland lawyers worked on last year was the $90 billion acquisition of Celgene Corp., a Summit, New Jersey-based pharmaceutical company, by Bristol-Myers Squibb, in one of the largest pharma industry acquisitions ever.

The firm's 2019 lateral hires reflected its continued focus on M&A and private equity work. Among the 20 lawyers Kirkland poached from Proskauer Rose in March 2019 were several partners whose work centered around private equity. The firm also added Adrian Maguire from Freshfields Bruckhaus Deringer; corporate lawyers Vincent Ponsonnaille and Laurent Victor-Michel; Latham's Debbie Yee; and David Klein of Paul, Weiss, Rifkind, Wharton & Garrison to its ranks over the past year.

Kirkland's restructuring lawyers handled some of the largest bankruptcy matters in the U.S. last year. For instance, after Toys R Us retained Kirkland to restructure its nearly $5 billion in debt, the firm has billed tens of millions of dollars, putting to work more than 100 Kirkland partners and more than 200 firm lawyers overall.

Kirkland lawyers were also involved in the bankruptcy proceedings of retail companies such as FullBeauty Brands, Things Remembered, Forever 21, Destination Maternity, Pier One and Acosta and energy companies including McDermott International, Vanguard Natural Resources, Jones Energy and Murray Energy.

And Kirkland's litigators stayed busy last year. In July, the firm announced it would begin representing plaintiffs in commercial disputes on a contingency-fee-basis, potentially putting its lawyers in greater competition with firms such as Quinn Emanuel Urquhart & Sullivan.

Last year saw the successful end of a 10-year legal battle Kirkland waged on behalf of Boeing, which sought to recover $500 million in connection with a joint venture with Russian, Ukrainian and Norwegian partners. With Kirkland's help, the airplane manufacturer has won a series of disputes around the world, from California to Russia.

Kirkland's lawyers also represented Facebook as the social media platform successfully fended off claims from victims of terrorist attacks committed by Hamas that it provided material support to the Palestinian group.

The firm added some high-profile litigators to its side, including former Illinois Attorney General Lisa Madigan and former Irell & Manella managing partner Ellisen Turner.

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