At K&L Gates, Partners Exit and ‘the King’ is Silent

Courtesy of K&L Gates.

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.

“These are not existential moments,” Kalis said in an interview last July. At the time, 90 partners had left his 2,000-lawyer firm over the past seven-month time span.

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. 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.

Kalis, a chair typically known for being a hands-on manager — one former partner referred to him as “the King” — could not be reached for comment on Friday, Monday and Tuesday.

On Friday, an automated out-of-office reply said that he would have infrequent access to his emails, and a firm spokesman replied to Big Law Business inquiries by saying that “the firm declines comment.”

The turnover at K&L Gates has renewed a discussion in the legal community around several points. Among them: Can a firm that offers much of its services in the middle market, in a variety or practices, go global and keep partners paddling in the same direction? And also, what are the costs of managing a firm with the help of non-practicing administrative partners?

Mike Abernathy, an IP lawyer, said he was convinced to join Morgan Lewis & Bockius in a matter of two weeks.

Abernathy maintained that his move “was not some dramatic rejection of K&L Gates.” Rather, he said he liked that at Morgan Lewis, “There is no administrative partner.”

That, according to other former firm lawyers, is different from K&L Gates, which has been managed by administrative partners whose responsibilities entail managing lawyers’ business.

Said Abernathy: “I want to be part of a culture that works and you work hard and your partners respect you a lot.”

He also noted that Morgan Lewis chair Jami McKeon emailed him four times during his first day, asking him “if everything was OK and how the first day went.”

“She has an active practice but she’s actively involved in the firm and down at my level.”

It should be noted that K&L Gates is no stranger to partner departures. In 2012, Law360 reported that the firm was losing partners in its Chicago office at what it characterized as “an alarming rate,” while Crain’s Chicago Business reported that the office had shrunk from 170 lawyers to 128 lawyers between 2011 and 2012. But Kalis came out swinging, penning a memo sent to Above the Law that touted the firm’s financial stability and that the firm refuses to engage in a “Deweyesque charade.”

Then last year, the next wave of departures hit. But K&L Gates started 2016 with a wave of fresh hires, adding partners in Los Angeles, New York, Chicago, Shanghai, Singapore, Brussels and London, and a number of practice areas including energy and infrastructure and construction. The back-and-forth churn has left some legal observers scratching their heads as to the significance of the latest round of exits.

Dan Binstock, a legal recruiter who has contacts at the firm, made the point that the turnover has called into question the firm’s business model.

Said Binstock: “K&L Gates is a (middle market) firm that is trying to be international with flexible billing rates — does it support globalization? Is there enough demand for that?”

One unusual element about the turnover is that some of the departing lawyers said the moves were unrelated, even though they happened around the same time. Two lawyers in different groups said they had no idea that others in their own firm were planning to leave and had no idea why.

Hollander, for her part, said she was drawn to Venable because of the firm’s advertising practice and overall cross-marketing philosophy throughout the firm.

“I wish (K&L Gates) nothing but the best.”

UPDATED: This story has been updated to clarify Binstock’s comments about K&L Gates.