Biglaw, Lateral Moves, Partner Issues

More Departures From The K&L Gates; Do They Matter?

Departures at K&L Gates are nothing new, but this time around they include members of firm leadership.

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KL Gates logo largeA new year, a new set of partner departures from K&L Gates. Hand-wringing over partners leaving the firm has been going on for years — since at least 2012, by our count — and the firm keeps on trucking. So some might dismiss this as a non-story, perhaps fueled by disgruntled ex-lawyers.

But maybe this time is different? The latest defections include prominent rainmakers and members of K&L Gates leadership, as Casey Sullivan of Bloomberg BNA reports:

Last year it looked like K&L Gates had sustained what could be a significant and potentially course-altering round of departures, but the firm’s outspoken chair Peter Kalis was quick to note that the turnover was ordinary business as non-equity partners departed after some targeted performance evaluations….

During the past five days, however – from Friday to Tuesday – a new round of exits have hit, and this time, the departures include practice leaders and executive committee members.

On Friday, five partners announced they would join Mayer Brown’s financial services, regulatory and enforcement group in Washington, D.C., while four partners said they would join Morgan Lewis & Bockius’ intellectual property group in Chicago.

The five partners making their way to Mayer are Steven Kaplan, Laurence Platt, Phillip Schulman, Melanie Brody, and Jonathan Jaffe. Kaplan and Platt served as leaders of the financial services practice group and members of the management committee while at K&L Gates. An ATL tipster told us that the group’s book of business goes well into the eight figures and was “one of the premier practices in the firm.”

The four partners moseying to Morgan Lewis are Michael Abernathy, Sanjay Murthy, Amanda Williamson, and Christopher Betti. Abernathy was global co-practice leader of K&L Gates’s IP group and a management committee member. One ATL source estimated his book of business at around $10 million (and added that he “was one of the IP partners who forced the merger between Bell Boyd and K&L in 2008 by threatening to leave Bell Boyd just as the Great Recession was taking its fiercest toll”).

UPDATE (3/3/2016, 1:00 p.m.): A source claims that Abernathy’s book of business is much larger than $10 million, more like in the tens (yes that’s plural) of millions.

These Friday defections were followed by additional losses this week:

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And on Monday, news spread throughout the legal community that more departures were in store. Susan Hollander, the Palo Alto-based head of the firm’s trademark practice, has joined Venable with two colleagues: counsel Jocelyn Belloni and associate Sharoni Finkelstein, while other possible departures in the firm’s Chicago and Washington, D.C. offices have been rumored but not yet confirmed.

Where might we see more defections? We’ve heard rumblings about the financial institution group and “heavy hitters in investment management,” with a focus on the Chicago, D.C., and Boston offices.

The Chicago offices, which experienced the big departures last week, could lose more lawyers before this is all over. As one tipster told us:

K&L Chicago has been a hot mess since it was Bell Boyd & Lloyd. There are a handful of boomer partners with big books, and the other partners are basically service partners. This office is [in serious trouble], though they don’t seem to have run out of Kool-Aid yet.

Kalis and K&L Gates declined to comment to Bloomberg BNA; we reached out to them too and received the same response. I wouldn’t be surprised, however, to see a feisty firm-wide memo from Kalis sometime this week or next. That’s just how he rolls (and rolls over the haters).

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Look, it’s Biglaw; partners come and partners go. Even the thriving firm of Kirkland & Ellis has seen a lot of defections lately (and just extended the notice period for departing partners in apparent response).

But still, these latest lawyer losses at K&L Gates do seem more significant than usual. If you have information or insight to share, please email us or text us (646-820-8477).

UPDATE (3/3/2016, 1:00 p.m.): Two points. First, from a K&L Gates client: “I can confirm that at least two of our primary attorney contacts at K&L have left. Based on the response we received from another associate, the departure was swift, with little backup planning for their caseload and lingering client questions.”

Second, the Legal Intelligencer just reported on the financial results of K&L Gates for 2015. In a nutshell, revenue fell and but profit per partner rose (partly due to a dip in the number of equity partners):

K&L Gates saw gross revenue dip 7 percent in 2015, a year in which the firm’s head count dropped a net of 100 lawyers, or 5 percent.

In a prepared statement, K&L Gates said revenue fell from about $1.15 billion in 2014 to $1.06 billion in 2015. The firm declined to comment beyond the statement, which also noted that profits per “fully participating” equity partners rose 5.3 percent from about $830,000 to more than $873,000.

K&L Gates saw a much higher reduction in equity partners in 2015 than in the nonequity partner rank. The number of fully participating equity partners dipped from 252 in 2014 to 210 in 2015, or by 16.6 percent. The number of nonequity partners dropped from 244 in 2014 to 229 last year, or a decline of 6.1 percent. Total head count fell 5 percent, from 1,952 in 2014 to 1,852 last year. The average compensation for all partners rose 2 percent to about $604,000.

We’re working on a possible follow-up story. Please reach out if you have info to share.

At K&L Gates, Partners Exit and ‘the King’ is Silent [Bloomberg BNA]
Hogan Lovells on a Hiring Spree, Plus More Lateral Moves [Am Law Daily]
Amid Defections, Kirkland Extends Notice Period for Departing Partners [Am Law Daily]

Earlier: Déjà Vu All Over Again: Peter Kalis Of K&L Gates Strikes Back At Law360
Barbarians At The K&L Gates?
Everything Is Great, K&L States: Peter Kalis Comes Out Swinging
Partners Streaming Out Of The K&L Gates?
The ATL Interrogatories: 10 Questions with Peter Kalis of K&L Gates

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