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Editor's Selections from The Legal 500 United States...
Despite difficulties for aviation and transportation finance, the market has shown some signs of improvement, such as the re-opening of the securitization market, after a dearth of this type of capital raising in recent years. There has also been increased interest in transportation finance initiatives by private equity players, which may add welcome stability and generate more mandates. However, due to continued reluctance for banks to lend, there remains a focus on alternative methods of raising capital, such as through export credit agencies and capital market secured debt-related transactions, and firms continue to act on various types of refinancing and restructuring. The American Airlines bankruptcy has been a significant source of work for many firms. Uncertainty continues to grow in the market as lenders and borrowers as a result of the instability of traditional lenders in Europe.
The northeastern power markets have been in a state of crisis over the last year attempting to ensure grid reliability and avoid rolling blackouts. Federal Energy Regulatory Commission (FERC) investigations are becoming more frequent amid ever-increasing concerns over grid reliability and, meanwhile, litigation continues from the California blackout of a decade ago. In response to some of the concerns in and around this, New Jersey has implemented a law to incentivize project financing in New Jersey and the in-state construction of natural gas fired combined-cycle power generators. The law is expected to have a profound effect on the PJM interconnection capacity markets relating to buy-side pricing and the law is being challenged under the Federal Power Act before the FERC. In addition, with the Dodd-Frank Act coming into force this year, compliance and reporting issues are expected to seriously affect power-side players, especially those in energy trading.
Many types of firms, from large IP boutiques to full-service international law firms, populate the top end of the intellectual property market. Indeed, full-service firms are increasingly specialising in IP to capitalize on the growing workload in global brand protection, particularly in the emerging technology sector. However, smaller IP boutiques continue to struggle in an increasingly competitive market, and some have been absorbed into larger, general practice firms while continuing to function as a boutique service.
INVESTMENT FUND FORMATION AND MANAGEMENT
The Dodd-Frank Act and The Volcker Rule, the investment management industry’s twin catalysts of regulatory reform, have continued to drive much of the discussion surrounding the changing shape of the private funds sector. The $1.7 trillion hedge funds market has experienced another humbling year of declining returns. Despite a slight increase in asset inflows in relation to 2010, 2011 continued to be a muted year for investments, particularly in light of the ongoing impact by Europe’s debt crisis, which sparked a period of sustained market volatility from August and lasting until the end of the year. Despite this, the number of new fund launches was disproportionately high, with more than 1,100 funds launching in 2011 making it the second highest number of launches on record. In addition, Dodd-Frank’s registration requirements for hedge funds with assets over $150m (albeit postponed from the initial deadline of July 2011 to March 2012), and The Volcker Rule-mandated spinouts of financial institutions’ proprietary trading platforms, have continued to provide a steady influx of mandates. Questions over the global reach of Dodd-Frank’s derivatives have necessitated practices’ increased use of cross-border capabilities. Practices identified in these rankings are those that have the capability to advise funds and managers on fund formation, restructuring and regulatory obligations. Work for hedge fund managers is given more emphasis, although those firms that have significant investor-side practices are duly noted. As with all the tables, top-quality advice on high-end funds has been given greatest weight, although volume work done well is also taken into account.
LABOR AND EMPLOYMENT
The Employee Retirement Income Security Act (ERISA), now coming up to its 40th anniversary, continues to evolve to meet the retirement and healthcare needs of employees and their families. Administered by three federal agencies – the Department of Labor, the Internal Revenue Service, and the Pension Benefit Guaranty Corporation (PBGC) – the technical rules of ERISA pose a formidable compliance challenge. There is no doubt: this is a complicated area of law. Trends have been noted. ERISA litigation and related fiduciary matters in traditional areas, such as stock-drop and fee matters, continues to intensify. Similarly, pension plan beneficiaries continue to pursue ERISA actions against the PBGC. These actions are some of the largest pension matters before the federal courts. Interestingly, litigation involving the health benefits area has now begun to out-pace traditional ERISA fiduciary litigation involving pensions. Successful practitioners must understand what events trigger litigation, how courts interpret fiduciary obligations and what best practices to employ to minimize liability risk. ERISA litigation services are provided either as part of a wide-ranging employment litigation practice or as part of a specialist employee benefits practice. The firms listed concentrate on the defense and arbitration of ERISA claims on behalf of companies, and are assessed on their size, depth and national reputation as well as the range and complexity of caseloads.
The international arbitration market has seen a steady increase in disputes, evidenced by the number of cases registered at the International Centre for the Settlement of Investment Disputes (ICSID). Regionally, the focus remains on Latin America. Firms are noticing a rise in technology-related disputes, including patent and licensing work, alongside more traditional sectors such as energy, telecoms and infrastructure. Credit is given to practices which represent a variety of clients such as sovereigns, multinational corporations and investors, and have a strong reputation in the field and a commitment to growth.
MEDIA, TECHNOLOGY AND TELECOMS
2011 was another busy year for the high-tech and telecoms sectors, driven by technology and market convergence, industry consolidation in an unpredictable economy, and the Obama administration tightening regulation around online activities. Major themes include the digitization of content across multiple platforms and different ways of delivering, promoting and utilizing content, interactive, mobile and location-based applications, big data and, consequently, data privacy and security. Consumer technology trends are spilling over into business, and organizations are leveraging technology through outsourcing and joint ventures. Improved connectivity and the proliferation of mobile devices have brought cloud computing – and the issues it raises – to the mainstream. Transactional activity in the fast-moving telecoms and broadcast sectors has continued apace with lawyers focusing on big-ticket M&A and international joint ventures that support global consolidation. The regulatory environment focuses on online activities, data collection and privacy, data protection and security, driven by rapid advances in location-based applications and mobile payment systems, as well as ownership issues in the telecoms and broadcast sectors.
MERGERS, ACQUISITIONS AND BUYOUTS
Since the election of President Obama, the antitrust agencies have pursued an active and aggressive enforcement agenda, and in 2011, there was an increase in government-led court challenges to mergers. For example, the DOJ successfully challenged AT&T’s acquisition of T-Mobile USA, and H&R Block’s acquisition of TaxAct, meanwhile the FTC unsuccessfully brought actions to block LabCorp’s integration of Westcliff Medical, and Lundbeck’s acquisition of Indocin. Gradually a number of other trends also began to materialize, such as an upsurge in private damage claims, a rise in the number of second requests and increase in cases relating to the intersection between intellectual property and antitrust laws, particularly in the patent arena.
REAL ESTATE AND CONSTRUCTION
While the commercial construction market in the US continues to stutter and stall through the economic turbulence, many firms are managing to remain busy through a steady flow of public works projects, health and education building and refurbishment, infrastructure upgrades, and a boom in major energy projects; the price of natural gas, the reduction in solar energy costs and the retrofitting of nuclear facilities has meant that energy projects are providing a sustained and lucrative flow of work, with several firms’ workload increasing dramatically as a result. Despite the concern that government money for infrastructure projects is running out, the state of the nation’s infrastructure ensures that, one way or another, widespread construction upgrades on transportation and public works projects continue to go ahead.
The volatility in the markets resulted in a drastic slowdown in transactional work across the board, continuing a trend having its origins in the 2008 financial crisis. In this cost-conscious climate, deals have tended to become more tax intensive than ever before, with clients demanding to see value. Tax lawyers working in national and international markets alike have benefitted from the elevated level of internal restructurings, including tax-free spin-offs, often pulling together assets needing to be separated within corporations spread across a number of jurisdictions.