The financials of K&L Gates should be golden this year — thanks to a huge contingency-fee win.
A reader recently wrote in to complain that we are “piling on” to K&L Gates. But extensive coverage of a law firm experiencing noteworthy partner defections isn’t “piling on”; it’s just covering the news. K&L Gates has lost a large number of important partners in recent weeks, and these defections have been covered in many major media outlets, including the American Lawyer, Bloomberg BNA, and Law360.
(What would be unfair would be covering partner departures from K&L Gates while ignoring comparable defections at a peer firm. If you know of a Biglaw firm as prominent as K&L Gates that has experienced as many departures of significant partners, please let us know and we’ll get on it.)
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In our K&L Gates coverage, we’ve mentioned positive developments as well as negative ones. We’ve highlighted the firm’s strong financial position, including its avoidance of debt (note the absence of bank debt in the firm’s 2015 financials). And we pointed out that the firm would be getting a huge payout from a contingency-fee case.
How huge? Here’s more info, via Julie Triedman of the American Lawyer:
Late last month, K&L Gates chair Peter Kalis emailed the 1,852-lawyer firm’s partnership with some incredible financial news.
Thanks to a $750 million patent infringement settlement involving client Carnegie Mellon University, Kalis said the firm would receive a whopping $210 million contingency fee award. The windfall amounts to just $55 million less than K&L Gates’ entire net income in 2015, and it is bound to boost partner profits by a substantial margin this year.
One of our sources took it as a sign of trouble at K&L that partners would leave the firm despite having such a bounty headed their way. And some of the defectors took big business with them; according to two former partners, financial-services lawyer Laurence Platt moved over to Mayer Brown with a $30 million book of business. (Platt, who served on the K&L Gates management committee, was viewed by some as a possible successor to Peter Kalis as firm chair.)
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But it’s possible that even more partners would have departed if not for the CMU payday, according to Am Law:
Indeed, some former partners say several others who had considered leaving the firm changed their minds following Kalis’ announcement. “People were saying, ‘I’ll just sit it out this year,’” said one of the former partners.
Sit it out — and collect the cash. Biglaw’s not so bad, is it?
K&L Gates Partners Made for Exits Despite $210M Windfall [Am Law Daily]
Earlier: Why Are So Many Partners Walking Out The K&L Gates?
What The K&L Is Going On? More Partners Pass Through The Gates
The Latest Departures Through The K&L Gates
More Departures From The K&L Gates; Do They Matter?
Barbarians At The K&L Gates?
The Two Faces of K&L Gates