The Firms

September 25, 2009 1:29 PM

The Secrets to K&L Gates's Success

Posted by Brian Baxter

The G20 Summit is in full swing today in Pittsburgh. Maybe that's why today's edition of The Wall Street Journal includes an interview with K&L Gates chairman Peter Kalis, whose firm holds a prominent place on the Steel City skyline.

Talking to WSJ reporter and Am Law alum Nathan Koppel, Kalis describes how the firm has managed to survive and grow during the downturn. The "Boss Talk" interview was excerpted in The WSJ's Law Blog. There are some interesting bits in the excerpt, especially on the subject of law school, which are worth passing along.

Firm finances for the year are shaping up to be better than 2008. As Kalis explains, revenues will reflect the firm's growth this past year. K&L opened several new offices, merged with Chicago's Bell Boyd & Lloyd and 175-lawyer North Carolina firm Kennedy Covington Lobdell & Hickman, and recently brought on one-fourth of Kelley Drye & Warren's Chicago office.

The growth wasn't as much of a risk for K&L Gates as it would have been for other firms during the downturn since the firm has no debt and the offices it has merged with had "little debt," Kalis said.

"I suspect our revenues will exceed $1 billion," he told The WSJ. "In terms of the bottom line, it will be challenged by what's happened in the legal market, but it will be helped by cost cutting."

According to the most recent Am Law 100 data, K&L Gates had gross revenues of $959.5 million in 2008 and profits per equity partner of $855,000. (While revenues increased by about 6 percent, PEP fell by 12 percent.)

Kalis, who doesn't mince words, also addressed the challenges of the current job market and the problem, as he sees it, with law school. We'll leave you with these comments:

"The business model of the U.S. law school doesn't quite make sense to me. Law schools will bring you in from college and educate you, but they will encumber you with six-figure indebtedness at a tender age.

The assumption was that there was no problem, because law firms like K&L Gates would pay that off for you. And that is where the wheels are falling off.

I've heard that law school applications are actually increasing. We will be pouring tens of thousands of young people into a market that I suspect is not going to be able to absorb them at the remuneration levels that would have justified them taking on that debt."

Make a comment

Comments (0)
Save & Share: Facebook | Del.ic.ious | | Email |

Reprints & Permissions


Report offensive comments to The Am Law Daily.

The comments to this entry are closed.

By: TwitterButtons.com

From the Newswire

Sign up to receive Legal Blog Watch by email
View a Sample