After the Chicago office of K&L Gates LLP lost 42 lawyers since the spring, and after allegations that partners are leaving nationally, K&L Gates responded this week by announcing its chairman, Peter J. Kalis, has been elected to a fifth term.
Kalis himself sent a lengthy memo to colleagues in which he said K&L Gates is doing better than many other law firms despite "false and malicious press coverage."
"And what of our poor and forlorn Chicago office," Kalis asked rhetorically, "where many of our partner departures this year did, in fact, occur?
"Well, it's not feeling so poor and forlorn these days."
He said the Chicago office's "billings are up over 10 percent through Aug. 31" and Chicago has "a more efficient office head count" and better utilization of lawyers. The firm sent the memo to the Chicago Daily Law Bulletin.
Also about the Chicago office, Kalis said, "the corrosive effect of the disaffected partners has been externalized from the firm — a group that incidentally left behind $2.3 million in bad accounts when they departed. Chicago is doing quite well, thank you."
The Law Bulletin contacted numerous lawyers who recently left K&L Gates' Chicago office for a response. None would comment on the record.
Since K&L Gates announced in December 2008 that it was merging with Bell, Boyd & Lloyd LLP, the Chicago office has been shrinking.
(In May 2008, Bell, Boyd & Lloyd employed 226 lawyers in its Chicago office, the Chicago Lawyer magazine survey of the largest law firms in Illinois says. But it announced 10 associate layoffs in October 2008.)
At the time of the merger announcement, Bell, Boyd & Lloyd employed 250 lawyers in Chicago, San Diego and Washington, D.C.
Today, the Chicago office of K&L Gates has only 127 lawyers. This is down 44 percent since mid-2008.
Since just the spring of this year, the Chicago office lost 25 percent of its lawyers. It reported employing 169 lawyers in the June Chicago Lawyer survey and has only 127 today.
Alan L. Barry, administrative partner of the Chicago office, did not respond to a request for comment.
"Times are tough for most law firms with no light at the end of the tunnel," said law firm consultant Joel F. Henning (pictured) of Joel Henning & Associates.
"Peter Kalis has been for a long time a one-man leadership band and some lawyers will not cotton to such a leadership style. This is especially the case" with lawyers who come in through mergers, Henning said.
"Also, lawyers that have big books of business might leave tightly managed, debt-free firms" for firms that offer them more money, Henning said. "Combine tight fiscal restraints with a very particular leadership style and you will have departures for either or both of these reasons."
Legal recruiter Kay Hoppe, president of Credentia Inc., said, "I think that any hysteria over anything right now is misplaced. It's a world of reordering and its premature to declare who will be the the winners and who will be the losers. These law firms are sports teams. They are reorganizing their benches."
Kalis has headed his law firm since 1997 when it was Kirkpatrick & Lockhart with six offices, the announcement of his re-election says. The firm is headquartered in Pittsburgh.
Today, the firm has 2,000 lawyers in 41 offices. During his tenure, Kalis has guided the firm through eight mergers, the announcement says.
Revenue increased every year since Kalis has been chairman "with 2011 being K&L Gates third consecutive year above the billion-dollar mark," the firm says.
Kalis' memo to colleagues said the firm's profits were up 20 percent in the first six months of this year compared to the same period last year.
He said an increase in revenues and profits per equity partner is expected for all of 2012.
Kalis said the firm has "never had any bank or other third-party debt. Never."
"We distribute only our earned profits to our partners and do not engage in any … charade of paying partners out of debt," he said.