Kirkland & Ellis, a global leader in bankruptcy law, has announced a substantial hike in its top hourly billing rates, reaching an unparalleled $2,465. This revelation emerged through court filings associated with prominent bankruptcy cases involving significant clients such as Rite Aid, WeWork, and Yellow Corp.
A Surge in Legal Fee Trends
The legal landscape is witnessing a remarkable surge in law firms advocating for elevated fees, particularly within major corporate restructurings. While hourly rates exceeding $2,000 were considered extraordinary a decade ago, recent years have steadily escalated, with select attorneys surpassing this threshold. In a recent class action lawsuit against Deutsche Bank, U.S. litigator David Boies billed at an impressive $2,110 per hour, and Covington & Burling disclosed a top rate of $2,500 for senior partners in the previous year.
Kirkland & Ellis Takes Charge
Kirkland's latest top billing rate of $2,465 aligns with the precedent set by esteemed Hogan Lovells appellate lawyer Neal Katyal. Katyal charged a similar amount for his services in a high-stakes bankruptcy case involving a Johnson & Johnson subsidiary last year. Despite boasting 329 restructuring lawyers on its website, Kirkland has remained tight-lipped about the announcement, and no immediate comments have been provided by the involved companies – Rite Aid, WeWork, and Yellow Corp.
Reshaping the Landscape of Bankruptcy Work
Bankruptcy work is a significant revenue stream for large law firms, given the intricate nature of corporate restructurings, often requiring extensive legal teams and potentially spanning several years. Recent court filings say the new billing rate ranges will be effective from January 1. The specifications indicate that bankruptcy partners will charge between $1,195 and $2,465 per hour, while of counsel will bill between $820 and $2,245 per hour. Associates will have rates ranging from $745 to $1,495 per hour.
Periodic Adjustments and Kirkland's Strategic Position
Emphasizing adaptability, Kirkland highlighted in its filings that these billing rates are "subject to periodic adjustments to reflect economic and other conditions," with considerations for lawyer promotions. Notably, the firm's top hourly rate was previously recorded at $2,245, as indicated in a November 20 filing related to the WeWork case.
Kirkland's Pinnacle in the Legal Realm
Founded in Chicago, Kirkland & Ellis is the highest-grossing law firm in the United States. According to data from The American Lawyer, the firm reported an impressive $6.5 billion in revenues in 2022, boasting a formidable roster of over 3,400 lawyers. Kirkland's influence in the bankruptcy legal landscape is underscored by its representation of over 120, or 10%, of large public companies that filed for bankruptcy since October 1, 1979, according to a research database co-created by University of California, Los Angeles law professor Lynn LoPucki. Significantly, nearly half of these cases were filed between 2013 and December 31, 2022, solidifying Kirkland's dominant position in the evolving dynamics of bankruptcy law.
