US giant apparently gave lawyers communication training as a result of feedback
Lawyers at US titan Kirkland & Ellis have reportedly come under fire for their “uncooperative behaviour” on private equity deals.
Limited partners (LPs) — the investors who provide capital to private equity funds — reportedly expressed frustration at an industry event last year over some lawyers’ approach to negotiations, according to the Financial Times (£).
As part of the event, attendees were asked to name one thing they’d change about private equity groups if they could “wave a magic wand.” According to the report, standing out prominently on the resulting “word cloud” were the words: “Fire K&E.”
Criticism of the firm focuses on two main issues: its apparent unwillingness to compromise, even on minor fund terms, and a communication style that provides little explanation when investor proposals are rejected — often responding simply with, “We respectfully decline”.
To smooth things over, Kirkland has reportedly put its lawyers through communication training. The “respectfully decline” phrase has apparently been “banned” as a result, after it became something of a sore spot between the firm and investors.
But Kirkland’s dominant role as the leading law firm advising on private capital fundraising naturally made it a lightning rod for frustration, some investors have said. They also noted that the firm’s style is simply part and parcel of private equity work, and no harsher than that of its competitors.
Responding to the criticism Kirkland & Ellis spokesperson said::
“Our firm values the relationships we have built within the funds industry, and we are proud of the trusted counsel and advocacy our lawyers provide to clients as they build partnerships with their investors.”
“We continue to evolve our business, collaborate with our counterparts, and provide strong support for our clients, including in the relationships with their investors, as market dynamics shift in the fund formation process,” they continued.