The commercial deals and contracts section was introduced this year to highlight work on significant supply, distribution, franchising, licensing and joint venture contracts. Science and technology, retail and leisure, finance, and pharmaceuticals are among the most relevant industries for these types of contracts and partnerships, and key firms include Covington & Burling LLP, Gibson, Dunn & Crutcher LLP, Latham & Watkins LLP and WilmerHale.
A corporate governance table has been introduced this year to highlight firms that act for boards of directors in their dealings with shareholders, and that advise clients on the governance aspects of capital markets and M&A transactions. Work in this area includes investigations into compliance with anti-corruption legislation, the Dodd-Frank Act and the Sarbanes-Oxley Act. Few firms have dedicated corporate governance teams. Instead, many draw on the expertise of their corporate and litigation departments.
With transaction values and volume at their highest-ever levels, 2015 was a banner year for M&A. It was a year when strategic corporates grabbed the headlines in place of private equity houses, which were comparatively quiet in bulge-bracket deals. Global M&A reached a record $4.28tn - a 30% increase on 2014, according to Mergermarket. The US was at the center of this M&A phenomenon. The US accounted for 46.2% of global M&A activity, with 4,786 deals valued at a combined $1.97tn. A headline example of this interest in doing deals was Heinz’s $60bn merger with Kraft Foods, a transaction that brought in the expertise of Cravath, Swaine & Moore LLP, Sullivan & Cromwell LLP and Kirkland & Ellis LLP. In a major development in 2016, Pfizer terminated its $160bn proposed acquisition of Allergan, following new rules introduced by the US Treasury to curtail the tax benefits of inversion transactions. After a string of such deals in the last few years, inversions may have had their day.
Although mega deals in the US enjoyed a banner year for announced transactions, the North American middle-market slowed down in 2015, with the total number of completed deals down considerably on the previous year. While rising debt pricing led to difficulties in obtaining financing, high sale prices also kept some dealmakers away, including a number of private equity firms; and with the US presidential election looming, and market jitters over interest rates, the reduction in deal volume affected most sectors, with the energy industry hit especially hard as low oil prices sparked uncertainty. Nonetheless, some commentators expect middle-market dealmaking to rebound during 2016, as a large percentage of mid-sized US companies are on the prowl for significant transactions that could reignite revenue streams.
Key moves among law firms included Orrick, Herrington & Sutcliffe LLP welcoming Ed Batts to the Silicon Valley office as co-global M&A and private equity head from DLA Piper LLP (US); Reed Smith LLP’s former global corporate and securities group head Yvan-Claude Pierre joining Cooley LLP’s New York office; Winston & Strawn LLP welcoming M&A and securities practice co-chair Christopher Zochowski, who established the firm’s corporate presence in the Washington DC office, from Pillsbury Winthrop Shaw Pittman, LLP; and Katten Muchin Rosenman LLP’s Chicago-based Kimberly Smith rejoining the firm as co-head of the nationwide private equity practice from Paul Hastings LLP. Meanwhile, Loeb & Loeb LLP’s former corporate chair David Schaefer exited to become chief operating officer at CounterPointe Energy Partners, and Robinson & Cole LLP’s former business transactions chair Eric Dale joined Nielsen as chief legal officer.
Headline mergers among law firms included Dentons joining forces with McKenna Long & Aldridge in July 2015 (which brought 24 additional partners into the corporate practice) and later finalizing its agreement with Chinese legal giant Dacheng Law Offices, LLP, the union bringing the firm’s total head count to approximately 6,600 lawyers in 50 countries; and Nixon Peabody LLP joining up with Chicago-based firm Ungaretti & Harris, which brought several attorneys into the corporate and M&A practice.
In 2015, the private equity market overall saw a continuation of trends from 2014. On the one hand, due to high deal prices, a considerable number of large buyout sponsors remained cautious about acquisitions and about long-term investment. Indeed, for large sponsors, most activity revolved around the sell side, with exits through IPO or trade sale the rule rather than the exception. The middle market, on the other hand, was very dynamic throughout most of the year. This was reflected in the legal market, with a growing number of firms seeking a slice of the middle-market pie.
The list of elite US law firms in the private equity sphere is certainly not set in stone, but, for the time being, the hierarchy remains untouched: Kirkland & Ellis LLP and Simpson Thacher & Bartlett LLP are the top two destinations for private equity clients, closely followed by Weil, Gotshal & Manges LLP, Debevoise & Plimpton LLP and Ropes & Gray LLP.
The venture capital and emerging company market remained robust, if more cautious, a trend which may continue into 2016 and beyond. The frenzy of investing in technology companies lost some of its heat, but continued to be a major factor in the market. However, the continuing convergence between the healthcare and technology industries means a buoyant life sciences sector picked up some of the slack. Cautious investing has also resulted in companies staying private for longer, leading to higher valuations and more ‘unicorns’ than ever before. The downside of this trend is that there have been fewer IPOs, and of the deals that have gone to market, some, such as Square, have underperformed. Some of the major deals of 2015 included the Uber financing rounds, Fitbit’s IPO and Airbnb’s series financing. Cooley LLP, Fenwick & West LLP and Wilson Sonsini Goodrich & Rosati are the top law firms for venture capital work, however Morgan, Lewis & Bockius LLP and DLA Piper LLP (US) are also regularly involved in big-ticket deals.