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Lessons in Management From K and L Gates: No Dictatorships

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By Jonathan R. Tung, Esq. on March 15, 2016 6:59 AM

That loud sucking sound you hear is the noise of 30 partners leaving the respected law firm of K and L Gates to find greener pastures. And to what does the firm owe this migratin of talent? Let's call it a difference in management style.

The ABA Journal reprinted the words first used by anonymous partners leaving the firm: the firm "is run like a dictatorship."

Not Even Money

Now, the loss of 30 partners leaving the firm out of a pre-migration number of 1,852 might not sound like a lot, but considering those partners left within just days or weeks after the company managed to bag a $210 million contingency fee award, almost assuring a massive boost in partner profits for 2016. But complaints about the firm's management style seem to point at discord between the firm's chair and managing partner Pete Kalis and the rest of the equity partners.

Pete Kalis

Kalis took over as the firm's managing partner in 1997. In recent years, complaints have surfaced about firm culture changing for the worst under this management. In the words of one partner, "the experience of equity partners at the firm has been that you're flat or you're down." Additional impetus came in the form of forced capital contributions by a number of partners. It is claimed that in some cases, such contributions can be as much as 60 percent of partner bonuses.

That Smarts

The move is nothing more than a massive switching of talent. Half of the lawyers who jumped the K&L ship were part of the firm's highly profitable Washington D.C. practice group that handled matters before the Consumer Financial Protection Bureau. Those partners joined the firm of Mayer Brown in a one-two move in February and March. The rest of the partners will be joining other BigLaw firms including names like Morgan, Lewis & Bockius, and Stradley Ronon Stevens & Young.

Lessons Learned?

So what tips can smaller and mid-sized firms learn? Well, it would be difficult to make a comparison since smaller and mid-sized firms hardly ever engage in large yearly bonuses -- at least not as a part of established firm culture. But it does at least highlight that running a firm is just as much dependent on your workers being happy as it is money. A firm might get away with being run like an autocratic fiefdom for the most part -- but at a 60 percent capital contribution, it's not surprising to see many partners run.

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