Last year, Blackstone Inc. declared a payment of $41.6 million in legal fees to Kirkland & Ellis, as revealed in a securities filing. This figure represents a decrease from the preceding years; Blackstone shelled out $53.4 million in 2022 and $70 million in 2021 for Kirkland’s services. These disclosures emerged post-Blackstone’s addition of eminent Kirkland partner, Reginald “Reg” Brown, to its board in late 2020.
A noted crisis management expert based in Washington, Brown has represented high-profile clientele like the Facebook billionaire Mark Zuckerberg and former US Secretary of State Rex Tillerson. His addition to Blackstone’s board contributes to a trend of increasing Big Law partners securing seats at public companies, necessitating the disclosure of related-party transactions.
In a recent 10-K filing, Blackstone reported that for his board work in 2023, Brown received a total compensation of $359,600. Conversely, the firm’s co-founder and CEO, Stephen Schwarzman, garnered an $896.7 million payout. The document also mentioned that Brown’s interest represents “less than 1% of the fees” paid to Kirkland.
Blackstone clarified that engagement with Kirkland wasn’t directly related to Brown’s appointment and confirmed that he receives no “direct compensation, specific origination bonus, or other disproportionate allocation from legal fees.”
Kirkland’s ties with Blackstone extend to Jonathan Gray, Blackstone’s president and Chief Operating Officer. Gray, who is a high school contemporary of Jon Ballis, chairman of Kirkland’s executive committee, solidified the company’s relationship with the law firm through his decision to invest in a broad array of practice areas.
Despite the decrease in deal volume in 2023 and increased delays in legal fee payouts due to earnout provisions, Kirkland still managed to secure the top spot for legal advisers, according to Bloomberg data. Kirkland represented Blackstone last year on its $2.3 billion bid for online pet care marketplace Rover Group Inc., and a subsequent $1 billion investment in Invenergy Renewables LLC.
In terms of executive pay, Blackstone’s 10-K filing noted that, John Finley, the company’s chief legal officer and senior managing director, received a pay package valued at over $17.9 million in 2023, marking a mild decrease from the $22.2 million he earned the year prior.
Blackstone disclosed that former Sen. Kelly Ayotte, a Republican from New Hampshire currently running for governor in that state, received $359,200 in total compensation from her role as a board member. Former Canadian prime minister and currently a senior partner at Norton Rose Fulbright, M. Brian Mulroney has also been reported to earn approximately $358,500 in total compensation for his role as a board member at Blackstone.
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