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Nine large Texas firms are making a mark in the nation’s big-bucks, big-name deals work. The nine firms are on charts in The American Lawyer‘s Corporate Scorecard, an annual report on the firms most active in many areas of transactional work, ranging from mergers and acquisitions and equities to bankruptcies and municipal bond issues. A year ago, 10 Texas firms appeared on the scorecard, including seven of the firms listed this year. The Texas firms noted for their corporate work this year include Houston-based firms Baker Botts, Bracewell & Patterson, Fulbright & Jaworski and Vinson & Elkins and large Dallas firms Akin, Gump, Strauss, Hauer & Feld, Jenkens & Gilchrist and Thompson & Knight. Others are Locke Liddell & Sapp, which is headquartered in Houston and Dallas, and Dallas municipal-bond firm McCall, Parkhurst & Horton. Baker Botts, Bracewell, Fulbright, V&E, Akin Gump, Locke Liddell and McCall Parkhurst make repeat appearances from last year on the scorecard, which is compiled by The American Lawyer, an affiliate of Texas Lawyerand law.com. The scorecard ranks firms in some areas of corporate work, including equities, project finance, mergers and acquisitions, municipal bonds, private equity and asset-backed securities. Baker Botts and V&E were each ranked in three areas — both are on charts for equities and project finance, while Baker Botts is also ranked in mergers and acquisitions and V&E in municipal bonds. Fulbright is ranked in equities and municipal bonds, while Bracewell weighed in on the project finance chart and McCall Parkhurst for municipal bonds. In some other areas of corporate work, The American Lawyerdoesn’t rank firms, but lists the biggest transactions in those areas and the firms handling the work. Those areas include corporate debt, real estate investment trusts, mutual funds and bankruptcies. The scorecard also includes lists of the top mergers and acquisitions worldwide and a selection of top mergers by industry. On those charts, Akin Gump is recognized for its work on bankruptcies and mergers and acquisitions, Baker Botts for mergers, Jenkens for public high-yield debt and bankruptcies, Locke Liddell and V&E for REIT mergers, and Thompson & Knight for high-yield debt offerings. Some firms dropped off the most recent version of the Corporate Scorecard, including Mayor, Day, Caldwell & Keeton and Wickliff & Hall, two Houston firms that were among the nation’s leading municipal bond firms in 1999. Andrews & Kurth of Houston, a firm that’s been on multiple charts for at least the last five years, did not rank in any area in this year’s version of the scorecard. Michael O’Leary, a co-head of Andrews & Kurth’s corporate securities group, says it’s a function of the firm’s clients. O’Leary suggests some firms across the nation racked up a lot of tech-related deals during the first months of 2000, and that’s not a strong area for Andrews & Kurth, he says. But O’Leary expects the firm to reappear on scorecard charts next year because deals for the energy business remain strong and certain types of financings like master limited partnerships, where the firm has special expertise, are hot in 2001. O’Leary says Andrews & Kurth’s loss of a large group of corporate lawyers to V&E in 2000 did not affect the firm’s performance on the scorecard. EMERGING ECONOMIES The stock market started a decline at the end of the first quarter of 2000, with technology companies in particular taking a hit. Initial public offerings for dot-coms became risky business, and the volume of mergers and acquisitions work declined by about 7 percent in 2000, compared to 1999, according to Thomson Financial Securities Data. That dip comes after a string of record-setting years. But there’s always the energy “bidness” in Texas. Oil prices tripled from 1998 levels and natural gas prices quadrupled from 1999, according to a report on the Texas economy in 2000. John Thompson, an assistant economist in research at the Federal Reserve Bank of Dallas, says in the report that energy companies had a “heyday” in 2000 and helped provide a hedge against a slowdown in other areas of the Texas economy. That strength in the energy business helps explain why Texas firms continue to make national showings for their deals work. About 80 percent of the work attributed to 783-lawyer V&E on the Corporate Scorecard is broadly related to the energy industry, says Mark Kelly, a partner in charge of the corporate practice in Houston. “Energy in a broad sense — power companies, exploration and production companies — probably [was] why we were up in the equity chart,” says Michael Wortley, Kelly’s counterpart in V&E’s Dallas office. Energy work came through when technology-related work ran dry. In the spring of 2000, according to Wortley, lawyers in V&E’s Dallas office worked on seven offerings for technology companies, four for issuers and three for underwriters. But he says all seven fizzled in April, May or June when the technology market crashed, and the lawyers moved over to energy deals. Activity in the energy business is also providing Texas firms with project finance work, deals that provide the money to build huge infrastructure projects like power plants and dams. In 2000, three Texas firms — Baker Botts, Bracewell and V&E — are among the firms nationally doing the most project finance work. The previous year, it was V&E, Baker Botts and Andrews & Kurth. Project finance deals, such as power plants in developing Latin American countries, are massive and expensive and just a few of them can boost a firm onto the list of the nation’s leading project finance firms. Bracewell, for instance, did four projects in 2000, placing it 34th on the list, while Baker Botts did five for 31st place and V&E did eight for 20th place. Patrick Oxford, a corporate partner in Bracewell, says Texas firms do well in project finance because the nation’s energy industry is concentrated in Houston. Enron Corp. is a major client for Bracewell and V&E, and Baker Botts does work for Reliant Energy Inc. Both Houston-based companies have project finance needs. Enron, Reliant and other energy companies in Houston invest heavily in emerging economies, says V&E’s Kelly. “If you look at what the Reliants of the world, the Enrons, the Dynegys, the El Pasos, the Dukes are doing, a lot of them are getting into broadband, electricity, they are getting into power, water, the whole energy spectrum,” he says. “Fortunately for Houston [firms], we’ve got kind of the power industry centered in Houston.” Municipal bond work is another area where Texas firms continue to shine. Fulbright ranked 5th, V&E 7th and McCall Parkhurst 8th, by amount of proceeds, for representing issuers in municipal bond sales in 2000. On the underwriter side of the deal, Fulbright ranked 7th by number of issues, V&E 9th and McCall Parkhurst 13th nationally. BANKRUPTCY BUSINESS Bankruptcy has been a hot area in the 21st century, and Texas firms are getting a share of the biggest ones. Akin Gump represents creditors’ counsel in the $6.1 billion bankruptcy of LTV Corp. and in the $6 billion bankruptcy of PennCorp Financial Group, two of the biggest bankruptcies filed in 2000. The PennCorp bankruptcy concluded in 2000, giving Akin Gump another mention on scorecard charts. The firm also represented Boston Chicken Inc. in its $2 billion bankruptcy, which is one of the 10 largest bankruptcies concluded in 2000. Jenkens represented FirstPlus Financial Inc. in its $1.6 billion bankruptcy, another of the top 10 concluded in 2000. Another strong area for 625-lawyer Jenkens is public high-yield debt offerings. The firm represented underwriter Chase Securities Inc. in a $750 million offering for HCA-The Healthcare Co. and a $500 million one for Columbia/HCA Healthcare. Those offerings were among the 10 largest public high-yield debt offerings in 2000. Thompson & Knight also weighed in the high-yield category by representing Pioneer Natural Resources Co. in a $424 million offering. Steven Leshin, a corporate securities shareholder in Jenkens, says the high-yield market is cyclical and strengthens when the equities market softens. In 1999, corporate finance lawyers at Jenkens did more equity work, but that shifted into the high-yield debt area in 2000 because that’s where clients were seeking money. “Equity wins in a hot market, but if it cools a little, debt is there if rates are good. But if it cools more, all debt goes away,” says Ronald Frappier, head of Jenkens’ corporate securities section. “A lot of this is really just a function of credit markets and equity markets. What we do as a corporate group is whatever the flavor of the month is,” Leshin says. While financings may be in and out of style, mergers and acquisitions continue. Despite inroads by Texas firms, New York firms continue to dominate the niche and the top of the scorecard chart tracking the firms representing principals in the most and highest-value mergers and acquisitions in 2000. Baker Botts is the only Texas firm to crack that chart in 2000, coming in 18th by value of deals ($45.6 billion) and 20th in number of deals (19 deals). Baker Botts worked on two of the selected top mergers by industry, representing BET Holdings II Inc. in its $3 billion acquisition by Viacom Inc. and representing Transocean Sedco Forex Inc. in its $8.8 billion acquisition of R&B Falcon Corp. Akin, Gump represented San Antonio’s Clear Channel Communications in its acquisition of SFX Entertainment Inc. for $4.2 billion, listed as one of the top entertainment deals of 2000. Stephen Massad, head of Baker Botts’ corporate section, says the firm consistently makes the Corporate Scorecard’s mergers-and-acquisitions chart. Locke Liddell and V&E again make the charts for REIT work — this time working both ends of the third-largest REIT merger in 2000. Locke Liddell represented Walden Residential Properties Inc. in its $1.7 billion acquisition by Olympus Real Estate Corp., V&E’s client. Instability in the economy and shifts in the way companies raise money or do deals may translate into larger roles for some Texas firms in the national deals market. For instance, O’Leary says growth in master limited partnerships may push Andrews & Kurth onto the charts. A shift in IPOs also could benefit Texas firms. While Silicon Valley firms continued in 2000 to do the most IPO work — Wilson Sonsini Goodrich & Rosati again leads the list of firms representing issuers in IPOs — a move away from technology initial public offerings may change the rankings for 2001. Corporate lawyers at some of the Texas firms on the Corporate Scorecard say they continue to be busy, despite the shakiness of the stock market and uncertainty in the economy, although they admit it’s not as frenetic as before the technology sector took a hit. Massad says attorneys at 605-lawyer Baker Botts continue to do a lot of mergers-and-acquisitions and restructuring work, along with project finance. Wortley says V&E’s insolvency practice is extremely busy and more of the acquisitions that the firm’s lawyers are handling are related to bankruptcies. “The work we are doing a lot of right now is M&A work, but not a lot of offering work,” says Frappier, the Jenkens lawyer. “We still have work, but it’s not as crazy as last year.”

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