In this week's Law Firm Disrupted, we (somehow) relate my over-confidence in NCAA bracket selection to Kirkland & Ellis' financial performance.

I'm Roy Strom, the author of this weekly newsletter on the changing business of Big Law, and you can send me your NCAA picks here or sign up to receive this email here.

Kirkland's 'New Normal' Is Not That New 

March Madness tipped off today, so I think it's worth taking a moment to talk about the thrill of filling out a bracket. The high point for me came in 2005, when I picked the Final Four correctly. I had Illinois, North Carolina, Louisville and Michigan State.

Yeah, sure, they're blue bloods of college basketball. But remember: Louisville was a No. 4 seed that year and Michigan State a 5. My picks were winners, and I felt like I had the madness cornered. I also need to admit something: I have felt that way ever since. I like to think I have the tournament's number, despite never coming close to picking a Final Four correctly or even sniffing a top place bracket in close to 15 years.

I am not special, hard as it is to admit. My 2005 victory was a passing fluke, more distant with every overconfident-yet-unfulfilled underdog pick I make. (Hello, Yale!) In short, my lone victory was not a new normal.

And that's where my current preoccupation—law firms—comes in. I want to argue that Kirkland & Ellis' standout 2018 financial performance was also not that much of a new normal. They've been here before.

Yes, I said last year that 2017 represented a new normal for Kirkland. That year the firm grew its revenue by 19 percent to cross the $3 billion mark and take its first title as the Am Law 100's No. 1 seed.

Kirkland looks poised to repeat that performance this year, following a report by The American Lawyer that the firm's top line rose more than 18 percent and is just shy of the $4 billion mark.

But judged by its own past performance, Kirkland's three straight years of revenue growth exceeding 15 percent is not all that new for the Chicago-founded firm. Since 2000, the firm's average annual growth rate has been 12.5 percent.

While it's true that the firm's post-recession growth rate has not been as strong as its pre-recession growth rate, they're still in the same ballpark: 163 percent from 2009 to 2018 compared to 203 percent from 2000 to 2009.

That is not the case for the Am Law 100 as a whole. Even assuming the group has a very strong 2018 performance, the Am Law 100's post-recession growth rate (an estimated 50 percent from 2009 to 2018) will be less than half of what it accomplished over the same number of years before the recession (108 percent from 2000 to 2009).

Kirkland's financial figures have been eye-popping over the last few years, but it's not necessarily due to the firm outperforming itself. It's more the case that the “normal” levels of growth for law firms have been reset. Kirkland also serves a reminder that the highest end of the legal services market has not seen its growth stall as much as the Am Law 51 – 100 and the Second Hundred.

Meanwhile, I'm still fighting to come to grips with my bad brackets. As I write this, No. 11 Belmont holds a healthy lead over No. 6 Maryland. I need that. Belmont is in my Sweet Sixteen.

Roy's Reading Corner

On Global Firms' Financial Health: Even if there has been a substantial reset of expectations among Am Law 200 firms, they can take solace in the fact that they are not facing the financial fortunes of Asia's largest law firms. That is one way to read a report from ALM Intelligence's Ben Hancock and Nicholas Bruch that points out revenue per lawyer metrics among Asia's largest firms still fail to crack the bottom of the Am Law 200.

On Global Firms' Financial Health Part Two: Being stuck in Asia may not be the best thing for a law firm's financial health, but being an international firm can be beneficial. Dan Packel at The American Lawyer writes about the rosy results of the global vereins this year, and notes that Citi Private Bank's survey had them growing at 7.7 percent on average—a figure right around where those firms' revenues are being reported by The American Lawyer's early numbers reports.

From Packel's story: “Generally speaking, we're seeing the strongest performance among the firms with a stronger international footprint than domestic,” said Gretta Rusanow, head of advisory services at Citi Private Bank.