Howard Shecter, head of Orrick’s M&A group, pointed out that Thomson doesn’t count unannounced private deals. Orrick, he said, worked on a number of private transactions, which on average might be worth less than public deals, but may produce more due diligence work.
Gerstein acknowledged, though, that the economic downturn can sting.
“It depends on the complexity and scale of the deals, but certainly fewer deals as a general matter means less work,” he said.
Many M&A practice heads said the anemic dollar value of the deals is not much of an indicator of practice health.
“It’s not as profound as you think, because we don’t get paid as a percentage of a deal,” said Shecter.
Several practice heads said that while there have been far fewer really big deals, midsize transactions are going relatively strongly.
“Large transactions are exciting and offer significant prestige, but the vast majority of M&A revenues for even the large law firms are generated in the $1 billion-and-under market,” Gerstein said.
| Quarterly Losses We chart (.pdf) the numbers comparing Q1 ’07 to the much less pleasant Q1 ’08 for the ten firms topping the Cal Law 25. |
Jack Walker, a consultant who was Latham’s managing partner for six of his 30-plus years with the firm, noted that a high value can suggest a more complex deal and, thus, more work.
“In the case of deals, you’re adding value. So there’s always more of a celebratory, share-the-wealth attitude,” Walker said. At least with a lot of cash involved, the Zeughauser Group consultant added. Stock deals are less lucrative. “There’s less liquid assets – less to share.”
“There probably is a general relationship between revenue and size of deals, although it’s not a perfect correlation,” agreed Jonathan Layne, co-chairman of M&A at Gibson, Dunn & Crutcher. The firm worked on a set of deals worth $54 billion – more than the remaining top 10 firms combined – thanks mostly to advising the banks behind Microsoft’s $41 billion bid for Yahoo.
Regardless of the importance of deal value, though, the sharp decline in numbers of transactions can’t be good, consultants said.
“I would be shocked if most firms – at least the major players in that area – aren’t seeing a reduction in hours,” said Ron Beard, a Zeughauser consultant who was Gibson’s chairman for 10 years.
Leaders of M&A practices were quick to point out bright spots in the dark economy. Foreign clients, they say, are eager to shop in the land of the increasingly discounted dollar.
“Cross-border deals led by strategic buyers outside the United States and the sovereign wealth funds . . . could be a very dramatic part of the M&A market,” Orrick’s Shecter said.
So far, though, foreigners haven’t yet swarmed U.S. shores en masse.
Subprime Time
Trending Stories
More From ALM
With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now
Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now
Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now
Dynamically explore and compare data on law firms, companies, individual lawyers, and industry trends.
Law.com Compass includes access to our exclusive industry reports, combining the unmatched expertise of our analyst team with ALM’s deep bench of proprietary information to provide insights that can’t be found anywhere else.
Law.com Compass delivers you the full scope of information, from the rankings of the Am Law 200 and NLJ 500 to intricate details and comparisons of firms’ financials, staffing, clients, news and events.
April 18, 2024
New York, NY Join the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR! Learn More
April 25, 2024
Dubai Law firms & in-house legal departments with a presence in the middle east celebrate outstanding achievement within the profession. Learn More
April 29, 2024 - May 01, 2024
Aurora, CO The premier educational and networking event for employee benefits brokers and agents. Learn More Atlanta s John Marshall Law School is seeking to hire one or more full-time, visiting Legal WritingInstructors to teach Legal Research, Anal... Apply Now › Lower Manhattan firm seeks a premises liability litigator (i.e., depositions, SJ motions, and/or trials) with at least 3-6 years of experien... Apply Now › At NJM, a top-rated insurance company, we are seeking an Attorney on our Workers Compensation legal team with between 3 and 5 years of expe... Apply Now ›
04/15/2024
Connecticut Law Tribune MELICK & PORTER, LLP PROMOTES CONNECTICUT PARTNERS HOLLY ROGERS, STEVEN BANKS, and ALEXANDER AHRENS View Announcement › |
