Correction, 4/23/14, 9 p.m. EDT: The original version of this story characterized attorney Rhett Van Syoc’s relationship to Simpson Thacher & Barlett inaccurately. Van Syoc is a former Simpson associate who left the firm last year. The seventh paragraph of this story has been revised to reflect the correct information. We regret the error.
Kirkland & Ellis is the latest Am Law 100 firm to head to Houston and is reportedly doing some big spending on the way into town.
Kirkland said Tuesday it is opening the new office—its seventh in the U.S., and 12th overall—with the hire of corporate partner Andrew Calder from Simpson Thacher & Bartlett. Calder, 35, had been with Simpson in Houston since 2011, when he moved there from the firm’s New York office as an associate before being promoted to partner later that year.
According to a source with knowledge of Calder’s agreement with Kirkland, he has been guaranteed $5 million in annual compensation over the next three-and-a-half years, with $1.5 million being paid up front this year. A Kirkland spokeswoman declined to comment on Calder’s compensation.
Calder would not be the first lateral hire to get such a generous pay package from Kirkland, whose average profits per partner reached $3.278 million last year, according to The American Lawyer’s reporting. The New York Times reported last summer that Kirkland gave former Securities and Exchange Commission enforcement director Robert Khuzami a similar $5 million-per-year guarantee when he came aboard as a partner.
The Kirkland spokeswoman said that neither Calder nor any representatives of the firm were available Wednesday to comment on his move. In a prepared statement, Calder said he admired Kirkland’s private equity and M&A capabilities.
“Having been involved in the Houston legal and business community for some time, I’m thrilled to help enhance Kirkland’s tremendous deal acumen and client service in the M&A area,” he said.
In his own statement, Kirkland chairman Jeffrey Hammes lauded Calder’s energy sector experience, adding that the hire and the new office would “enhance the service we provide to all of our clients in the energy industry.” (The Kirkland press release announcing the opening of the Houson office said Calder will be joined there by former Simpson associate Rhett Van Syoc, who a Simpson spokeswoman said left that firm last year, and Kirkland corporate partner Benjamin Clinger, who is relocating from the firm’s Chicago office.)
The Am Law Daily featured Calder last November as a Dealmaker of the Week last in connection with his work advising Blackstone-backed GeoSouthern Energy on its $6 billion sale of Eagle Ford shale assets to Devon Energy. At the time, he said he made the move to Houston to expand his work in the energy industry. And he did just that, landing a string of assignments that saw him represent such longtime Simpson private equity clients as The Blackstone Group and KKR on energy-related transactions. In March 2013, for instance, he advised KKR on its $3.9 billion acquisition of Gardner Denver, a manufacturer of industrial machinery used by oil and gas companies. His other energy industry clients include Petrohawk Energy Corporation and a joint venture between Blackstone and Alta Resources.
Like Simpson, which opened its Houston office in 2011 just before Calder’s arrival, Kirkland handles a substantial amount of deal work for heavyweight private equity clients, including Blackstone and KKR. Last week, for instance, the firm served as lead legal counsel on Blackstone’s joint acquisition, with Goldman Sachs’ merchant banking arm, of capital markets software company Ipreo Holdings for a reported $957 million. Last fall, the firm handled KKR’s $1 billion purchase of The Crosby Group and Acco Material Handling Solutions, both of which make lifting and rigging products used for oil and gas drilling. (Simpson was on the other side of that deal advising the companies’ seller, Melrose Industries.)
Calder’s move suggests that in addition to competing for corporate work, Kirkland and Simpson are increasingly competing for talent. Last fall, corporate partner Sean Rodgers left Simpson’s New York office to join Kirkland in yet another high-profile hire for the firm. Rodgers, who has his own deep ties to KKR, worked alongside Calder when Simpson advised KKR on the Gardner Denver deal last year.
The American Lawyer reported earlier this year that Kirkland posted record revenues of $2.016 billion last year, a 4 percent increase over the firm’s 2012 total. Simpson also enjoyed a strong financial year in 2013, with gross revenue jumping 14.4 percent, to $1.128 billion, and profits per partner climbing 18.8 percent, to $3.165 million.
A Simpson spokeswoman provided The Am Law Daily with the following comment in response to a request for comment about Calder’s departure: “We have a thriving practice in Houston, with a deep and talented team that was just strengthened by the hiring of Breen Haire. We wish Andy well in his next endeavor.” (Simpson recruited Haire—a corporate partner with a focus on energy industry transactions—from Baker Botts last month.)
Simpson, of course, isn’t the only firm Kirkland will vie with in entering the Houston market.
The Am Law Daily has reported extensively on the bevy of big firms that have moved to take advantage of the area’s energy boom in recent years. The American Lawyer recently took its own in-depth look at how Latham & Watkins built a successful Houston office by hiring several partners from such Lone Star State stalwarts as Akin Gump Strauss Hauer & Feld, Baker Botts and Vinson & Elkins when it launched in the city in 2010. A host of other firms—including Paul Hastings, Reed Smith and Sidley Austin—subsequently followed the same strategy in opening their Houston offices. (Simpson opened its office by hiring V&E lending partner Robert Rabalais, another attorney with ties to both Blackstone and KKR.)
The most recent Houston arrivals include Arnold & Porter, which launched its office in the city in January with the addition of two partners and a counsel from Hogan Lovells. Dentons opened its doors in Houston last fall by shifting nine of its own lawyers there from Washington, D.C., and Dallas, while Husch Blackwell and Katten Muchin Rosenman have also opened up offices in the area within the past year.
