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When Marc Manly, then-general counsel of the Midwestern energy firm Cinergy Corp., first learned of his company’s possible merger with Duke Energy Corp. last year, he knew whom he wanted in his corner-New York-based Skadden, Arps, Slate, Meagher & Flom. Back in 1994, Skadden had helped Cinergy’s predecessor company, The Cincinnati Gas & Electric Co., fight off a hostile takeover bid by a local rival. “People told them they couldn’t win,” Manly said. “It’s in the worst situations that you discover the true mettle of a firm.” Cincinnati Gas kept Skadden on board later that year to steer it through its friendly merger with PSI Energy Inc., to form Cinergy. In 2005, when Cinergy started down the aisle to its $9.8 billion marriage with Charlotte, N.C.-based Duke, Manly naturally thought of Skadden. But he soon learned that he wasn’t the only one speed-dialing the firm. B. Keith Trent, then GC of Duke, also wanted Skadden. After a brief standoff, the two decided to let Skadden advise Duke, so long as Trent didn’t use the group of lawyers who knew Cinergy’s business, Manly said. He agreed to the arrangement because he didn’t want to lose Skadden’s energy-related expertise, even if it was technically being wielded on the other side of the table. Today, Manly is GC of Duke (Trent now serves as head of litigation), and still considers Skadden his go-to firm for big deals. Since 1988, The National Law Journalhas conducted a survey of Fortune250 legal departments, asking them to list their “primary” outside counsel. This year, 93 companies provided information on their top law firms for corporate transactions, litigation, labor and employment, and intellectual property. They named a total of 380 law firms. The past five years reveal at least two noteworthy trends. Skadden, propelled by the kind of loyalty shown by Manly, has ranked as the No. 1 go-to firm for corporate transactions nearly every year. But it isn’t the only firm that GCs love to call. Over the same five years, Chicago-based Kirkland & Ellis has captured the No. 1 spot for litigation. What’s behind this trend? William Barr, general counsel of New York-based Verizon Communications Inc., said that his relationship with Kirkland & Ellis dates back to 1994, when he became GC of GTE Corp., one of the Verizon predecessor companies. Barr said that he turns to Kirkland & Ellis for “big, important litigation,” as well as smaller cases, regulatory matters and, most recently, work for Verizon Wireless, the company’s joint venture with Vodafone Group PLC. Barr said the firm’s litigation group has a lot of depth-”strength at every level.” Another plus, he said, is the firm’s efficient handling of its cases: “They don’t throw unnecessary bodies at a matter to gin up the billables.” Still, plenty of law firms have the same qualities. What’s keeping some firms on top? Size, skill, the strength of the brand name, the effect of convergence (the process generally favors big firms) and a tendency to reach out to large, expensive firms when there’s big, potentially costly legal business at hand. While chief legal officers like to talk big about keeping a close eye on legal bills, when it comes down to a bet-the-company case, they typically say that they want the massive firepower of a large firm on their side-no matter what the expense. Many companies have refined their roster of preferred providers in recent years, but the big firms haven’t been among the casualties. Consultant Rees Morrison said he doesn’t find this surprising. “Convergence favors bigger firms,” since they are equipped to handle a wider array of matters, said Morrison, a principal at Somerset, N.J.-based legal consulting firm Hildebrandt International Inc. But size isn’t the whole story. So what’s the edge keeping the top firms on top? Their brand names, said Daniel DiLucchio Jr., a principal in the Newtown Square, Pa., headquarters of legal consulting firm Altman Weil Inc. He said cost control just doesn’t happen at this level.
Morgan, Lewis & Bockius 31
Jones Day 26
Kirkland & Ellis 23
Mayer, Brown, Rowe & Maw 21
Baker Botts 20
Davis Polk & Wardwell 18
Sidley Austin 18
Skadden, Arps, Slate, Meagher & Flom 18
Littler Mendelson 17
Alston & Bird 16

For example, Manly said that he uses local firms such as Robinson, Bradshaw & Hinson of Charlotte, N.C., to handle small transactions- “they produce comparable work at half the price”-but there comes a point when “a transaction becomes so complicated it’s worth paying the $800 or $900″ an hour for a senior Skadden partner. One interesting trend is the wholesale disappearance of Washington-based firms from the list of most mentioned litigation firms. Four years ago, four D.C. firms appeared in the top 10. Today, not a one. Morrison attributed this to the Bush administration. With the Federal Trade Commission and other agencies gone “toothless,” he said, there’s less regulatory enforcement-hence, less need for Washington’s heavy hitters. But other than those probably temporary downturns, the big guys stay on top, buoyed by the semper fidelisdisposition of corporate counsel. As Verizon’s Barr said, “Why shop around when you’re successful with what you’ve got?”

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