Editors' Blog

An eerily familiar departure and bad news for Kirkland

Posted 4/03/2008 by Alex Novarese

How much new is there to say now that one of Kirkland & Ellis’ high profile City M&A recruits, Raymond McKeeve, has announced his not-at-all shock resignation from the firm? After all, many of the same issues that were relevant in McKeeve’s transfer two years ago with Graham White from Linklaters still seem relevant today.

The duo had plenty of admirers but smoothly integrating into new firms does not appear to be one of their strengths, even within the more individualistic partnership culture and meritocracy of Kirkland. The firm is quick to support McKeeve’s performance and it is clear that he and White did bring some clients with them. They were also probably a little unlucky in terms of activity levels from key clients like CVC and Robert Tchenguiz, neither of whom have been out in the market much in the last 18 months.

But many rivals – and a few Kirkland partners – were saying that they had yet to live up to a billing that was always supposed to be about a full-tilt crack at the top of Europe’s private equity market. Likewise, in contrast to the smooth expansion of Kirkland’s City leveraged finance team and a busy start for the highly-touted funds team recruited last year from SJ Berwin, it is claimed that cultural tensions between the more conservative US partners and the duo have not helped (though City head Jim Learner vehenmently denies this).

In addition, the truth is that Linklaters has proved far more successful at relaunching its City buy-out practice under the oversight of Charlie Jacobs than many gave credit for at the time of the pair’s departure. With clients putting work through Silk Street’s doors including Terra Firma, Hermes, SunCapital, Montagu, Bridgepoint and HG Capital, a collapse it has not been for Links.

Where does this leave Kirkland? Having spent a good chunk of last week loudly protesting that everything was fine, today’s hurried announcement that McKeeve is to leave the firm to pursue a career outside the law doesn’t look good. And however the firm tries to characterise the departure, it’s hard to see how making that kind of expensive signing only to see the partner leave two years later can been viewed as anything but a substantial setback.

The bottom line is that Kirkland still has an impressive line-up of talent in the City but it’s not going to get very far until it can prove its stars can act as a cohesive team.

alex.novarese@legalweek.com