Kirkland & Ellis made headlines again when it stated it will no longer disclose financial information to The American Lawyer magazine and other media after 2026. Firm leadership said financial disclosures could put too much focus on quantitative metrics over the quality and caliber of the firm’s legal services.
Kirkland is in a category by itself, but is there more to the story? Why now? And will other firms follow?
Parallels to private equity
Kirkland’s decision parallels private equity’s approach to taking public companies private.
Companies sometimes leave public markets because pressure to deliver quarterly financial results can interfere with the changes needed to remain competitive or retool. Restructuring operations, investing in technology, and abandoning declining business models may depress short-term performance even when they improve long-term value.
Guest columnist Ken Crutchfield is founder and CEO of Spring Forward Consulting. A regular contributor to LawSites, he has over 40 years of experience in legal, tax and other industries. Read more about him at the bottom of this post.
Perhaps this is why they are declining to share information. After all, they have committed to investing $500 million in AI, which should fundamentally change how the firm operates. It would make perfect sense to stay out of the headlines if reporting financials will distract from their long-term strategy.
AI transformation is the likely driver of this change, but reporting eight-figure partner profits in today’s business climate isn’t exactly something a firm wants to advertise to the general public either.
Will more firms follow?
If AI transformation is the likely driver for Kirkland, this may be an inflection point where more top law firms follow.
AI should disrupt the economics of legal services, particularly the relationship between hours worked, revenue generated, and value delivered. A law firm that materially improves productivity could generate fewer billable hours or charge differently. A transitioning firm might see some financial variation in traditional performance metrics. Major investments in AI and data infrastructure could reduce partner distributions before producing meaningful returns.
Viewed through the traditional Am Law metrics, successful transformation might initially resemble financial underperformance or vulnerability.
Why do firms report anyway?
Firms are private partnerships and are under no obligation to report financials publicly. No public shareholders demand quarterly earnings. But the profession has spent four decades building its own version of a public financial scoreboard.
In 1977, a series of court decisions allowed lawyers to advertise and self-promote. Steven Brill founded The American Lawyer shortly afterward and began treating law firms as businesses. In 1985, the publication reported financials on fifty firms. Over time, being included on an Am Law list became prestigious, and firms began to voluntarily share financials. The list and transparency helped firms show scale and pressured top firms to manage effectively.
Kirkland’s 2025 revenue figure of $10.6 billion is now two orders of magnitude higher than Skadden’s $129 million when it topped the list in 1985.
Stepping away from that scoreboard might give leadership greater freedom to pursue long-term changes without having every investment, restructuring, or temporary setback reflected in an industry ranking.
The pressure to maintain profitability shouldn’t disappear when the financial results become private. Unlike private equity investors who can agree to a multi-year transformation strategy, law firm partners expect annual compensation and can often take their business elsewhere. Financial rigor will remain.
Transparency for clients
AI is changing client expectations and metrics, too. I’ve heard of clients who have at least temporarily abandoned alternate fee arrangements (AFAs) and returned to the billable hour to understand how AI is affecting workload and efficiency on matters, so they can negotiate new AFAs later.
Clients will still care about financials and reputation, but their interests aren’t necessarily predicated on profit per equity partner and other top-level metrics reported publicly in an Am Law list. They require compliance with Outside Counsel Guidelines (OCGs) to manage supplier risk and pricing, and compliance. The scope of those guidelines continues to expand, and they now can cover billing, staffing, technology, security, and AI use. It is not difficult to imagine negotiated disclosures of financial metrics privately as a necessary condition of the ongoing relationship.
General counsel will want to know whether a strategically important firm has the financial resources, proper infrastructure investment, and stability to fulfill its obligations.
Legal issues are sensitive, and while clients may want transparency with their firms, they may also be perfectly happy if firms disclose less information publicly.
Summary
Forty years ago, legal journalism brought financial transparency to a profession reluctant to share its economics. In the next era, clients may become the more influential arbiters of what financial information matters and who needs to see it.
Public financial transparency could decline as firms transform, and ironically, financial accountability may actually increase in private.
AI was used in the creation of this article.
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Ken Crutchfield, founder and CEO of Spring Forward Consulting, has over 40 years of experience in legal, tax and other industries. Throughout his career, he has focused on growth, innovation and business transformation. His consulting practice advises investors, legal tech startups, firms, and others.As a strategic thinker who understands markets and creating products to meet customer needs, he has worked in start-ups and large enterprises. He has served in General Management capacities in six businesses.
Ken has a pulse on the trends affecting the market. Whether it was the Internet way back in the 1980s or Generative AI, he understands technology and its impact on business.
Crutchfield started his career as an intern with LexisNexis and has worked at Thomson Reuters, Bloomberg, Dun & Bradstreet, and Wolters Kluwer. Ken has an MBA and holds a B.S. in Electrical Engineering from The Ohio State University.