First Half 2016 Deal Volume Forum

[bwh8813]

In case anyone else finds this interesting

Top 5 (Full Top 20 at link below):

White & Case - $278 bln (138 deals)
Sullivan & Cromwell - $243 bln (74 deals)
Davis Polk - $215 bln (77 deals)
Cravath - $202 bln (36 deals)
Simpson Thatcher - $198 bln (66 deals)

Source: http://www.bna.com/goldman-white-case-n57982076745

[v5junior]

Principal representation is where it's at. Kind of silly to treat a law firm repping a financial advisor (or even the law firm representing the banks doing the financing) the same as buyer's counsel or seller's counsel.

http://www.bbhub.io/professional/sites/ ... H-2016.pdf

[v5junior]

Principal representation is where it's at. Kind of silly to treat a law firm repping a financial advisor (or even the law firm representing the banks doing the financing) the same as buyer's counsel or seller's counsel.

http://www.bbhub.io/professional/sites/ ... H-2016.pdf

Accidental anon

[jbagelboy]

Why is it silly to consider financial institutional rep when banks are some of the major firms' largest and highest billing clients?

[Anonymous User]

Why is it silly to consider financial institutional rep when banks are some of the major firms' largest and highest billing clients?

My firm does a lot financial institutions rep in the context of M&A. I can think of a number of reasons. First of all, you could make the argument that you're not actually practicing M&A because your client is not acquiring interest in a company or getting acquired by a company. Even aside from that, it's very different work. People representing the investment bankers in a M&A deal will do much, much less work. A 40+ billion deal might only take a team of 3 lawyers a few days worth of work to complete. Sure, the clients are willing to get billed more but its much less work and less manpower required. Also, there is like 20 partners in all of New York who exclusively represent financial institutions in M&A. Most M&A partners do a little financial rep work on the side, but only when things are slow. And in M&A world, its actually considered less prestigious. Cravath until very very recently basically prohibited their lawyers from doing this type of work, and I think Wachtell still does too. Sure, Cravath would be happy to rep Citibank if Citi was acquiring Barclays. But aside from that they don't want to be repping Citi if it was just financially advising Goldman Sachs in Goldman's acquisition of Barclays.

And honestly, this work was not commonly considered traditional M&A work. Like the OP shows, if you consider repping investment banks to be just like any other M&A, then White & Case is the global king of M&A and Latham is some unknown TTT. But that's not the way we typically think of W&C and Latham. In fact, I've heard lawyers from W&C say that they do too much investment banking/financial institutions work, and if they pulled back on it a little they would get many more F500 clients involved in M&A and therefore make more money. Caveat: If you only rep I-bankers in M&A you will probably have amazing exit options.

[jbagelboy]

Strange for you to say since Cravath appears to have lent heavily on financial institutions this year as evidenced comparing the overall and principal representation charts. Whatever hesitation they and their peers (except Wachtell) may have had historically wrt fin inst reps seems to have been thrown entirely out the window. Peers DPW, Simpson, S&C actually have more consistent placement across overall volume and principal, so their deal portfolios were more balanced toward principal. Cravath has a huge banking M&A presence via JP morgan (comparable to davis polk with Morgan Stanley and sullivan with GS). Wachtell is the only firm that seems to dominate only the principal chart volume (davis seems to have a high volume of both). Prestige has nothing to do with it, its how to build PPP.

[v5junior]

Strange for you to say since Cravath appears to have lent heavily on financial institutions this year as evidenced comparing the overall and principal representation charts. Whatever hesitation they and their peers (except Wachtell) may have had historically wrt fin inst reps seems to have been thrown entirely out the window. Peers DPW, Simpson, S&C actually have more consistent placement across overall volume and principal, so their deal portfolios were more balanced toward principal. Cravath has a huge banking M&A presence via JP morgan (comparable to davis polk with Morgan Stanley and sullivan with GS). Wachtell is the only firm that seems to dominate only the principal chart volume (davis seems to have a high volume of both). Prestige has nothing to do with it, its how to build PPP.

If I'm reading this right, you seem to be pretty uninformed. Repping a financial advisor is not remotely in the same ballpark as a principal. I haven't seen a bill total for both, but I'd guess representing a principal is worth ~100x the revenue that repping the financial advisor is. There's just so much more work involved.

The best part is, your ignorance leads you to reach a conclusion that's the complete opposite of reality. Principal representation is a huge boost to PPP because of all the hours involved. Financial advisor representation basically only adds prestige value for league tables (by letting you claim 100% of the deal volume while contributing 1% of the hours).

[v5junior]

Why is it silly to consider financial institutional rep when banks are some of the major firms' largest and highest billing clients?

Because representing them in the m&a context as financial advisors has nothing to do with the revenue they generate for those firms...

[jbagelboy]

Strange for you to say since Cravath appears to have lent heavily on financial institutions this year as evidenced comparing the overall and principal representation charts. Whatever hesitation they and their peers (except Wachtell) may have had historically wrt fin inst reps seems to have been thrown entirely out the window. Peers DPW, Simpson, S&C actually have more consistent placement across overall volume and principal, so their deal portfolios were more balanced toward principal. Cravath has a huge banking M&A presence via JP morgan (comparable to davis polk with Morgan Stanley and sullivan with GS). Wachtell is the only firm that seems to dominate only the principal chart volume (davis seems to have a high volume of both). Prestige has nothing to do with it, its how to build PPP.

If I'm reading this right, you seem to be pretty uninformed. Repping a financial advisor is not remotely in the same ballpark as a principal. I haven't seen a bill total for both, but I'd guess representing a principal is worth ~100x the revenue that repping the financial advisor is. There's just so much more work involved.

The best part is, your ignorance leads you to reach a conclusion that's the complete opposite of reality. Principal representation is a huge boost to PPP because of all the hours involved. Financial advisor representation basically only adds prestige value for league tables (by letting you claim 100% of the deal volume while contributing 1% of the hours).

Okay. Putting all the personal attacks aside, look at the two charts. When a firm comes in #4 in overall volume and >15 in principal volume, the reasonable reading is that a greater percentage of its deal flow came from non-principal representations relative to competitors. Similarly, when a firm goes from >10 in overall to #1 in principal, the reasonable reading is that it acts for principals in a greater percentage of its deals than its competitors (see Wachtell). The argument that e.g. Cravath avoids that type of work is thereby completely refuted. That's all I'm saying.

I'm not arguing that one type of work adds "prestige" and another adds PPP. I'm saying that firms will make decisions that are commercially beneficial and revenue generating. I agree and understand that principal representations yield more billable hours. You're reading something into my post that I have not asserted.

[jbagelboy]

Why is it silly to consider financial institutional rep when banks are some of the major firms' largest and highest billing clients?

Because representing them in the m&a context as financial advisors has nothing to do with the revenue they generate for those firms...

This makes sense.

[v5junior]

Strange for you to say since Cravath appears to have lent heavily on financial institutions this year as evidenced comparing the overall and principal representation charts. Whatever hesitation they and their peers (except Wachtell) may have had historically wrt fin inst reps seems to have been thrown entirely out the window. Peers DPW, Simpson, S&C actually have more consistent placement across overall volume and principal, so their deal portfolios were more balanced toward principal. Cravath has a huge banking M&A presence via JP morgan (comparable to davis polk with Morgan Stanley and sullivan with GS). Wachtell is the only firm that seems to dominate only the principal chart volume (davis seems to have a high volume of both). Prestige has nothing to do with it, its how to build PPP.

If I'm reading this right, you seem to be pretty uninformed. Repping a financial advisor is not remotely in the same ballpark as a principal. I haven't seen a bill total for both, but I'd guess representing a principal is worth ~100x the revenue that repping the financial advisor is. There's just so much more work involved.

The best part is, your ignorance leads you to reach a conclusion that's the complete opposite of reality. Principal representation is a huge boost to PPP because of all the hours involved. Financial advisor representation basically only adds prestige value for league tables (by letting you claim 100% of the deal volume while contributing 1% of the hours).

Okay. Putting all the personal attacks aside, look at the two charts. When a firm comes in #4 in overall volume and >15 in principal volume, the reasonable reading is that a greater percentage of its deal flow came from non-principal representations relative to competitors. Similarly, when a firm goes from >10 in overall to #1 in principal, the reasonable reading is that it acts for principals in a greater percentage of its deals than its competitors (see Wachtell). The argument that e.g. Cravath avoids that type of work is thereby completely refuted. That's all I'm saying.

I'm not arguing that one type of work adds "prestige" and another adds PPP. I'm saying that firms will make decisions that are commercially beneficial and revenue generating. I agree and understand that principal representations yield more billable hours. You're reading something into my post that I have not asserted.

But you still have not "completely refuted" the Cravath point.

First, we're looking at a six months of "announced" deals--that's an incredibly limited sample. And the poster you were quoting said "until very recently" or something to that effect.

Second, the point he was making re: not wanting to rep the financial advisor is that the role comes with the opportunity cost of not representing the principal--not that they'd affirmatively turn down the business on a high profile deal in a vacuum. The numbers you point to are completely consistent with that point.

Finally, and related to my previous post, if Cravath spent 1000 hours working on two principal representations with a combined deal size of $50 billion, and 100 hours working on 10 principal representations with a combined deal size of $150 billion, I think the most reasonable reading is that most of their deal flow was principal representation.

[lawlorbust]

Caveat: If you only rep I-bankers in M&A you will probably have amazing exit options.

I don't know why you think this might be the case but am be prepared to be enlightened.