Please give us an overview of the current legal market in the United States and how any recent developments have impacted your practice?
The M&A legal market in the United States remains generally quite strong. Although transaction volumes are down slightly from a peak in 2015, the level of activity is still quite robust. Overall M&A activity in the US is driven primarily by strategic acquirers and cross-border transactions, which plays into Cravath’s historic strengths, with its corporate and international client base.
What significant trends exist in the US markets presently? Are you seeing these just domestically or internationally as well?
The most significant trend in US M&A activity over the last several years has been the pursuit of size as a strategic imperative. Across many significant US industries (healthcare, technology, media, retail, etc.), the largest participants are substantially bigger than they were ten or 15 years ago. This concentration is driving consolidation in related industries, all up and down the supply chain. We see this trend not just domestically but also across most of the developed international economies.
What are the three biggest challenges to practicing in M&A at the US at the moment?
From a strategic perspective, the major challenge is understanding the specific industry dynamics that are pushing the need for M&A and consolidation generally. This is related to the quest for size.
The second major challenge is regulatory uncertainty. The changing nature of M&A is creating new challenges in antitrust, national security regulation and other industry regulation, as regulators come to grips with the implications of scale.
The third major challenge is political uncertainty. Recent nationalist and protectionist trends, which ultimately can be traced back to the global financial crisis of 2008, continue to create significant challenges for domestic and international M&A.
How does M&A fit into the firm as a whole? Is it easy to collaborate with other teams?
M&A remains an important part of Cravath’s corporate practice and represents a core part of the firm. As a result of our culture, including
that most of our lawyers are located in a single office, the M&A teams at
Cravath collaborate closely with other experts at the firm, including our antitrust, intellectual property and litigation groups.
What advice would you give to the next generation of M&A lawyers?
‘The more things change, the more they stay the same.’ Twenty years from now, M&A work in the US will simultaneously be very different from but also similar to the way it is currently practised. The challenge will be to recognise what is changing and what is not, and to learn to adapt your skillset, methods and behaviours to meet the changing needs and demands of the market and clients.
What are your predictions for M&A in the US over the next five years?
US M&A activity will be driven primarily by the state of the real economy. The US real economy has been, for a number of years, on a solid footing and, if that continues, then so will flow robust M&A activity.