Are investment banks really that bothered about M&A? It is a question that Ashurst, of all firms, has been asking itself of late, thanks to feedback from institutional clients.
Conventional law firm thinking is still driven by M&A, of course, despite City law firms’ prolonged post-Big Bang drift towards the investment banking community. Finance teams have grown, splitting into product lines at the larger firms and, aside from Slaughter and May, increasingly give priority treatment to banking clients over corporates that spend the same money on legal bills. But in their hearts law firms remain culturally wedded to M&A, which produces their biggest fees, best margins and is more resistant to commoditisation than finance (paradoxically, because corporate is a less innovative practice area than finance). Cosying up to banks is often mainly about getting the nod on M&A too.
But, as Ashurst head of corporate Adrian Clark points out, such a stance is looking a little outdated. Of course, banks still want the corporate work, but these days they are as interested in putting together the M&A advisory role with financing duties and as many other value-addeds as they can dream up, not to mention getting directly involved in deals via their own buy-out-style acquisition funds. Likewise, trading and broking lines have become more important at the expense of highly-erratic M&A revenues.
