Kirkland & Ellis, one of the world’s busiest bankruptcy practices, has unveiled a substantial increase in its top hourly billing rates, setting the bar at an unprecedented $2,465. The announcement came through court filings related to high-profile bankruptcy cases involving clients such as Rite Aid, WeWork, and Yellow Corp.
Escalating Trends in Legal Fees
The legal industry is witnessing a notable trend of law firms pushing for higher fees, especially in major corporate restructurings. A decade ago, hourly rates reaching $2,000 were considered exceptional, but these figures have steadily surpassed that threshold for select attorneys in recent years. In a recent class action lawsuit against Deutsche Bank, U.S. litigator David Boies billed at an hourly rate of $2,110. At the same time, Covington & Burling disclosed a top speed of $2,500 for senior partners in the previous year.
Kirkland & Ellis Takes the Lead
Kirkland’s newly announced top rate of $2,465 aligns with the precedent set by prominent Hogan Lovells appellate lawyer Neal Katyal, who charged a similar amount for his services in a high-stakes bankruptcy case involving a Johnson & Johnson subsidiary last year. Kirkland, boasting 329 restructuring lawyers on its website, has not issued any immediate comments, and neither have the involved companies – Rite Aid, WeWork, and Yellow Corp.
Impact on Bankruptcy Work
Bankruptcy work is a significant revenue stream for large law firms, given the complex nature of corporate restructurings, which often necessitate extensive legal teams and can extend over several years. The new billing rate ranges, effective January 1 according to the recent court filings, specify that bankruptcy partners will charge between $1,195 and $2,465 per hour, while counsel will bill between $820 and $2,245 per hour. Associates will fall within $745 to $1,495 per hour.
Periodic Adjustments and Kirkland’s Position
Kirkland emphasized in its filings that these billing rates are “subject to periodic adjustments to reflect economic and other conditions” and will account for lawyer promotions. The firm’s top hourly rate was previously recorded at $2,245, according to a November 20 filing in the WeWork case.
Kirkland’s Dominance in the Legal Landscape
Founded in Chicago, Kirkland & Ellis is the highest-grossing law firm in the United States. According to data compiled by The American Lawyer, the firm reported revenues of $6.5 billion in 2022, boasting a roster of over 3,400 lawyers. Impressively, Kirkland has represented 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. Nearly half of these cases were filed between 2013 and December 31, 2022, underscoring Kirkland’s significant influence in bankruptcy law.
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