Corporate practices may not be in the midst of a booming fourth-quarter M&A market like the one that marked the end of 2012, but they have had a bright spot in 2013 thanks to the spate of IPO filings throughout the year.

And Pennsylvania firms have been cashing in on that work, due in large part to their industry expertise and geographic footprint. Area firms say they are seeing a lot of activity in the life sciences and biotechnology space, the busiest of all industries in the 2013 initial public offering market, and are leveraging their multi-office platforms to handle cross-border deals and those involving listings on more than one exchange.

There have been 210 IPO pricings so far in 2013, according to data tracked by IPO investment firm Renaissance Capital. That is compared to 128 pricings in all of 2012, the firm said. The value of those deals was $42.4 billion in 2012 and $49.4 billion in 2013, Renaissance Capital reported. The number of IPO filings, which generate legal work but don’t necessarily result in a pricing and eventual closing of the offering, was up from 140 last year to 237 so far this year, the firm reported.

“A vibrant IPO market reflects capital that’s looking for a place to be invested,” Dechert corporate partner James A. Lebovitz said. “In my view, it’s always a positive when there’s a vibrant IPO market because that means there’s capital to be deployed.”

Dechert has worked on five deals since September for companies that have filed their S-1 registration with the Securities and Exchange Commission, beginning the official steps of completing an IPO. For Dechert, the real increase in IPO work has been on cross-border deals where foreign companies are looking to list in the United States or looking to list in the United States and abroad.

Dechert recently advised software company Kofax Limited, for example, on its creation of a new holding company incorporated in Bermuda with the intention of having dual listings on the London Stock Exchange and the Nasdaq Global Select Market.

There is a bit of a debate among capital markets attorneys as to what is driving the robust IPO market. Some say it is simply the improved state of the market, while others point to the Jumpstart Our Business Startups Act, or JOBS Act, as the catalyst for a jump in filings.

The JOBS Act, enacted in April 2012, allows emerging growth companies—companies with less than $1 billion in revenue—to file their initial paperwork with the SEC confidentially, provide less stringent disclosures and have preliminary conversations with investors before going out on a formal “roadshow” in which companies use their formal, publicly available prospectus to create interest in their impending filing.

The ability to file confidentially has caused a number of companies to test the waters and, if the interest isn’t there, withdraw their filing with the SEC before it ever goes public. That keeps their financial information private. If companies do follow through with the process, they have to make public their S-1 21 days before starting their roadshow.

Reed Smith partner Yvan-Claude J. Pierre, chairman of the firm’s U.S. capital markets group, said the JOBS Act has bolstered filings. He said almost 90 percent of filers have filed as emerging growth companies. Morgan, Lewis & Bockius partner Joanne R. Soslow, co-chairwoman of the firm’s securities industry practice, agreed that the JOBS Act has helped spawn the rise in filings.

Completing an IPO is an expensive process that Soslow said companies don’t want to get too involved with unless they are reasonably sure it will be successful. The ability to test the investor waters confidentially before disclosing too much to competitors has made that process more bearable for more companies, she said.

Mark Johnson, a corporate partner at K&L Gates in Boston, said the JOBS Act has helped some companies file, but he said it is difficult to know whether that was the sole cause.

“The JOBS Act saves some money and time … but I think this is much more market-driven in terms of how the market is performing,” Johnson said.

Regardless of the motivation, the trend looks as though it will continue. Johnson said K&L Gates, which has been adding attorneys in the capital markets space, has a healthier pipeline of IPO deals going into 2014 and 2015 than it did a year ago.

Like many other area firms, K&L Gates has been busy in the biotech arena, but he and Soslow mentioned that work has slowed a bit toward the end of the year. Soslow said she thinks investors who had a strong 2013 in that industry want to reap the benefits of their investments and take a break from new deals until next year. Soslow said there were a few life sciences companies across the industry that went on roadshows in late 2013 and didn’t get the investor interest they were hoping for. They have put their IPOs on hold, but Soslow said she expects to see a flurry of closings between January and mid-February 2014 before their financial filings with the SEC go “stale” and need to be redone.

Pierre said he thinks the technology sector will retake its position in 2014 as the leader in IPOs. The bulk of the IPOs being contemplated are in the technology industry, he said, particularly in the media and technology industry. Twitter’s recent IPO, done under the JOBS Act, was one such example. Pierre said he expects 2014 to be an even stronger year for the capital markets practice, though he noted much of that depends on what Congress does and whether there is an impasse with the budget. He has been pitching for work on several new IPOs in recent weeks and has seven that are waiting to file.

Life sciences, technology and energy IPOs dominated the U.S. market while financial services deals were the global driver of IPO filings, the attorneys noted.

Johnson said he thinks the market will continue to be strong in 2014. As an example, Johnson pointed to a roll-up IPO he is involved with. In that situation, five companies, all too small on their own to go public, are going to spend the first half of next year creating a combined entity to sell to potential investors for an IPO in the second half of 2014. Johnson said those companies are investing money now with the belief the market will support its IPO almost a year from now.

The Gift That Keeps on Giving

Lawyers can either represent the issuers of an IPO, which are the companies going public, or the underwriters, which are the banks that buy the shares to then sell to institutional investors for trading on the public markets. Both generate a decent amount of work during an average of four to eight months from start to finish. Working for the issuers, however, can mean work on either end of the IPO deal.

“We institutionally have made an investment in building out the capital markets practice in order to support the rest of the practice groups,” K&L Gates’ Johnson said. “We are more issuer-side focused than underwriters because our platform is to serve every company wherever they are and this is a piece of that.”

Johnson said he leverages his colleagues’ experience in growing a company and then educates that company on how to behave as a public company post-IPO. Johnson currently has eight IPOs in the pipeline in various stages and six are from colleagues, he said.

Lebovitz said Dechert handles IPOs from both sides of the table. In terms of work generated for the law firm, representing the issuer is often more lucrative because it provides a flow of business after the company is public, he said. Both sides, however, create a lot of due diligence work during the IPO process, he said.

Soslow said Pennsylvania-area firms are well suited to handle the rise in life sciences IPOs, as well as deals for the number of companies in the region that qualify to file under the JOBS Act given their revenue figures. For those companies, Soslow said, her team is often doing financing deals in advance of the IPO process to ensure the company is capitalized well enough to survive in the public markets.

Morgan Lewis’ Pennsylvania and New Jersey offices typically represent issuers while the New York capital markets team represents underwriters, she said.

Typically, the companies Morgan Lewis represents in an IPO are existing firm clients. Often the firm is already representing them in labor and benefits matters, for example. After the IPO, the firm will handle regulatory compliance and corporate governance issues as well. The firm may also handle follow-on public offerings in which the companies look to raise additional capital after the IPO. And if a company is unsuccessful after a roadshow, it may look to do an M&A deal instead, Soslow said.

While the firm has been busy in the life sciences space, Morgan Lewis’ IPO practice spans industries because its work with private equity funds has resulted in IPOs in a range of industries. The IPO process itself requires a variety of practice areas. In a life sciences deal, Soslow said, tax, benefits, IP, labor and regulatory lawyers are often working on a matter. In a retail deal, real estate lawyers can be added to the list, she said.

Pierre said Reed Smith’s capital markets team has handled more than 100 transactions this year, including companies looking to change their listing to a different exchange, follow-on offerings and five IPOs. Life sciences, a key industry group for Reed Smith, has been the driver of much of that work.

Gina Passarella can be contacted at 215-557-2494 or at gpassarella@alm.com. Follow her on Twitter @GPassarellaTLI.