Déjà Vu All Over Again: Peter Kalis Of K&L Gates Strikes Back At Law360

K&L GATES — MEMORANDUM — LAW360 AND K&L GATES

From: Kalis, Peter
Sent: Thursday, July 30, 2015 12:08 PM
To: ALLLAW
Subject: Law360 and K&L Gates
Importance: High

Colleagues: In the last week or so, a false narrative about K&L Gates has surfaced in the online publication Law360, which is not taken seriously as a journalistic organ but which makes up for what it lacks in acuity with a broad daily distribution.  If it were an inch deep, we might call it a mile wide and an inch deep.

The source of Law360’s animus toward our firm is unclear.  For those of you who were here in 2012, you may be inclined to think that it has something to do with the industry-wide humiliation we (with helpful reporting from Above the Law) inflicted on Law360.  Where others see conspiracy, however, I tend to see negligence so I would opt for shoddy journalism over venality.  It really doesn’t matter though.  In the age of the internet, a false narrative about our firm must be and is taken seriously.

Fortunately, some journalistic organs aim for the truth.  With its global reputation, Bloomberg unsurprisingly is such a journalistic source.

You will find appended below Bloomberg’s article on our firm that has just appeared.  We would have written this story differently but it does have the not inconsiderable virtue of trying to be balanced.

Let me offer a few other facts to address allegations in Law360:

• We’re a firm of approximately 2000 lawyers and 900 partners.
• Through June 30, our lawyer headcount is down 1.3% from our Business Plan for 2015 (formulated in Q4 2014).
• Through June 30, our partner headcount is down 2.5% from our Business Plan for 2015.
• Adjusted for foreign exchange fluctuations, through June our revenue is close to Plan for 2015 even given the marginally reduced headcount.
• Adjusted for foreign exchange fluctuations, and as related at our July partner meeting, based on mid-year results and conservative assumptions our CFO is projecting a 15% increase in profit per equity partner in 2015.

I find especially annoying the shots being taken at our Australian merger by former partners who weren’t here at the time of the merger, haven’t benefited from it or from the extraordinary positioning advantage it has bestowed upon us in the critical Asia-Pacific Region, and didn’t contribute much while they were here.  (That may be why they’re former partners.)  Consider this:

• From 2013 to 2014, Australian imported work from the rest of the platform grew by 52%.
• From 2014 to 2015 (annualized  based on results through June 30), the growth in imports is 21%.
• From 2013 to 2014, Australian exported work to the rest of the platform grew by 41%.
• From 2014 to 2015 (annualized based on results through June 30), the growth is 66%.

With about 30% of our firmwide revenue drawn from work sourced in one office and performed in another, much of which is international in nature, it seems clear that your law firm is substantially benefiting from the platform that we’ve all worked so hard to build.

Need I add that we’re likely the only major law firm that has never had a dollar of short-term or long-term third-party debt from a bank or otherwise.  Probably redundant at this point.  But if you need a reminder of the perils of debt in the legal industry, follow the coverage of the ongoing trial involving former officeholders at Dewey or think back on Brobeck or Heller or Howrey or Thacher Profitt or so many other firms that succumbed to unsustainable debt loads as business prospects varied.

As a destination, K&L Gates continues to rank at the top of our profession with over 50 lateral partners and government affairs professionals joining us (or about to join us) since January 1 of this year.  And, as the article below notes, over 50 associates were promoted to income partner on March 1.

We live in a fishbowl and have always invited scrutiny.  This is why we’re the only financially transparent US-based law firm.  But we also return fire when fired unfairly upon.  If someone importunes you with a false narrative about our law firm, therefore, please transfer them to me at [redacted] so that I can set them straight. Or, better yet, you might want to do it yourself.

As to Law360, it should stick to reporting on cases where it has a 50-50 chance of being right.

As always, please do not hesitate to be in touch with any questions or comments. Best regards, Pete

K&L Gates Chair On Partner Exodus: Isn’t This to Be Expected? [Big Law Business / Bloomberg BNA]

Earlier: Barbarians At The K&L Gates?
Everything Is Great, K&L States: Peter Kalis Comes Out Swinging
The ATL Interrogatories: 10 Questions with Peter Kalis of K&L Gates