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How bad a year was it for mergers and acquisitions lawyers? Just ask any lawyer not aboard for Pfizer’s $61.3 billion acquisition of Sweden’s Pharmacia. By far the largest deal of the year, the merger accounted for almost 15 percent of the total value of announced U.S. merger activity in 2002, according to data and rankings released by Thomson Financial, the business research and information group. Indeed, involvement in that single transaction was enough to push an unlikely host of law firms into the top ranks of M&A law firms. Thomson ranks law firms according to the value of deals on which they have advised, crediting all law firms participating in a deal with the full value of the deal, regardless of the actual size of their role. As a result, participants in the Pfizer-Pharmacia deal constituted nine of the top 10 law firms in Thomson’s 2002 ranking, pushing many traditional leaders out of their accustomed perches near the top of the list. The total value of announced U.S. M&A deals in 2002 was $457.9 billion, off 41 percent from 2001′s $771 billion. The sharp drop follows an already deep plunge in 2001, when the value of M&A transactions was down by more than 50 percent from 2000. Indeed, U.S. merger activity in 2002 was lower than in any year since 1994. New York-based Skadden, Arps, Slate, Meagher & Flom topped the rankings by advising on deals valued at $132.4 billion. The firm, which ranked fifth in 2001, played a role in the year’s biggest deal by representing Goldman Sachs & Co., Pharmacia’s investment bank in the deal. Likewise, New York-based Sullivan & Cromwell, which represented Pharmacia itself, rose to third from fourth in 2001, advising on $102 billion worth of deals. But most of the rest of the top 10 were newcomers. Pfizer’s counsel, New York-based Cadwalader, Wickersham & Taft, ranked eighth in 2002, up from 45th place the year before. Los Angeles-based Gibson Dunn & Crutcher, which leaped to second place from 15th, represented Lazard, one of the investment banks advising Pfizer. Non-New York firms Jones, Day, Reavis & Pogue; Clifford Chance; Arnold & Porter; Linklaters; and Swedish law firm Mannheimer Swartling Advokatbyra all ranked among the top 10 M&A law firms in 2002 owing to roles in the Pfizer-Pharmacia merger. Meanwhile, many of New York’s leading M&A law firms saw stupendous drops in the value of their deals. Last year’s leader, Wachtell, Lipton, Rosen & Katz, ranked 10th in 2002, with $60.3 billion in deals, a 75 percent drop from the firm’s $240.5 billion in 2001. Indeed, Cravath, Swaine & Moore; Simpson Thacher & Bartlett; Shearman & Sterling; Davis Polk & Wardwell; Dewey Ballantine; and Debevoise & Plimpton all saw the value of their merger work drop by more than 70 percent in 2002. All also fell from top-10 spots they held the year before. The drop-off in U.S. M&A activity also affected New York firms’ standings in the worldwide rankings, in which London’s Linklaters and Clifford Chance took first and second place, respectively. The outlook for 2003 may not be much better, said Franklin M. Gittes, the head of Skadden Arps’ M&A department. Though there have been discussions that might indicate some pickup in the later part of year, he said, there are also huge question marks about a possible war with Iraq, as well as the impact of corporate governance reform. “I can’t say that I see an imminent upswing in the M&A marketplace,” said Gittes. Related chart: U.S. Announced Mergers & Acquisitions — Top 10

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