Counsel to i-bank Forum

[Anonymous User]

Hi - genuinely curious in learning more about investment banks' preferred legal counsel in their role as buy-side or sell-side financial advisor on large M&A deals.

My understanding is that generally, GS has a strong relationship with S&C, MS has a strong relationship with DPW, and JPM has a strong relationship with STB. Not sure if that generality holds in M&A specifically (as opposed to underwriter's counsel in capital markets transactions, debt financing, and other services offered by the buldge-bracket shops).

Also curious to know if there are any notable relationships between particular law firms and elite boutique investment banks (Evercore, Centerview, Moelis, PJT, etc.).

[Anonymous User]

in the M&A context are you talking about a law firm advising the *bank*, or the law firm advising the *company*

I'm assuming you're interested more in the latter, in which case, what's most relevant is (as in banking) the law firm's relationship with the company's board/executives/GC/whatever. not the investment bankers.

obviously a good relationship with a bank is helpful/mutually-beneficial---you suggest them, they suggest you, etc. so at my firm at least, get emails from partners forwarding some courtesy slides or w/e that some Goldman or JPM MD sent them that were used at a conference. which they're sending us b/c they're repeat players, we're repeat players, and they want us to keep them in mind. but this isn't like, the primary way we get our business (nor is it for Goldman or JPM). (for example, you said STB has a good JPM relationship. sure, but what's bringing in much of their M&A deal flow is their independent private equity relationships with Blackstone etc)

I realize this is sort of orthogonal to your question, but if what you're trying to figure out is "what law firms have good M&A practices" and you're thinking about it vis-a-vis law firm relationships to various investment banks, not really the right framing

at least this is what I've observed in practice

[Anonymous User]

My question was actually about the former. I’m curious as to which law firms team up with which investment banks when representing the banks in their capacity as financial advisors on M&A transactions.

I’m not asking about the law firms’ relationships with the principals of transactions, though I agree with your summary on how those relationships are formed.

[The Lsat Airbender]

My question was actually about the former. I’m curious as to which law firms team up with which investment banks when representing the banks in their capacity as financial advisors on M&A transactions.

Maybe I'm badly misunderstanding what you mean but I'm pretty sure this doesn't exist. A financial advisor generally doesn't need legal advice. They have in-house people to draft the engagement letter, provide comments to NDAs, etc., and that's basically it for their legal needs.

[Anonymous User]

My question was actually about the former. I’m curious as to which law firms team up with which investment banks when representing the banks in their capacity as financial advisors on M&A transactions.

Maybe I'm badly misunderstanding what you mean but I'm pretty sure this doesn't exist. A financial advisor generally doesn't need legal advice. They have in-house people to draft the engagement letter, provide comments to NDAs, etc., and that's basically it for their legal needs.

This is wrong. Investment banks, especially for public M&A deals, will hire law firms to represent them in their capacity as financial advisor to help render a fairness opinion, review the portions of the proxy related to the company's financial valuation, etc. In-house counsel at the banks work with this, but you need outside counsel to make it look more fair.

It's terribly boring work from a legal perspective, though. First years can do it.

[The Lsat Airbender]

It's terribly boring work from a legal perspective, though. First years can do it.

I'll pretend my ignorance of the niche is a strength then.

[Anonymous User]

My question was actually about the former. I’m curious as to which law firms team up with which investment banks when representing the banks in their capacity as financial advisors on M&A transactions.

Maybe I'm badly misunderstanding what you mean but I'm pretty sure this doesn't exist. A financial advisor generally doesn't need legal advice. They have in-house people to draft the engagement letter, provide comments to NDAs, etc., and that's basically it for their legal needs.

This is wrong. Investment banks, especially for public M&A deals, will hire law firms to represent them in their capacity as financial advisor to help render a fairness opinion, review the portions of the proxy related to the company's financial valuation, etc. In-house counsel at the banks work with this, but you need outside counsel to make it look more fair.

It's terribly boring work from a legal perspective, though. First years can do it.

Plus banks' internal risk policies may require external signoff on proxy disclosures (and certain in-house counsel can be a real pain in the ass about it).

To OP: a lot of the same firms that are players in public M&A work on this sort of stuff - sometimes it's the more senior partners who otherwise do a little less of the 24/7 deal counseling work. I've seen Weil and S&C repping Evercore, STB doing bank representation for BofA and JPM, and Kirkland and Skadden doing a bit for lots of banks. It just depends on which firms that are on the in-house team's approved list aren't conflicted.

There are a few people who are "expert" in bank representations who aren't necessarily from firms that are the biggest hitters in the M&A space, too: White & Case, Alston & Bird, etc. I think the reason is that people at firms that do a little less public M&A on a daily basis are less likely to be conflicted and so can be engaged at short notice. (It is often short notice, probably not dissimilar timing-wise to commitment paper work - deal signing on Monday; on Thursday the bankers are told they need to issue a fairness opinion; counsel engaged on Friday morning.)

Firms with strong finance AND M&A practices (like Latham and DPW) do a little less of it than others. If they're not representing one of the parties to a deal, their debt teams will try to pick up the bank representation on the term loan or bonds. And people might get conflicted later in the piece if there's a special committee formed and needs counsel, there's a divestiture, etc. All these other roles are more profitable, so some firms turn down financial advisor representation more than they take it on. Repping the FA is usually under six figures in fees unles the deal is super crazy.

Still, it gets you deal credit - so if you're a firm that likes to say "we've advised on X trillion of deals this quarter", doing financial advisor work on a mega-deal adds to the tally. Plus I guess if you're smart about it you can see iterations of deal docs as they go through the process, which can be a useful resource if you remember the big terms.

Otherwise, it's not attractive, exciting or lucrative. Once you figure out where terminal value is in the deck and where the comps are, it's pretty rote work.

[Anonymous User]

Very helpful, thank you!

[Anonymous User]

My question was actually about the former. I’m curious as to which law firms team up with which investment banks when representing the banks in their capacity as financial advisors on M&A transactions.

I’m not asking about the law firms’ relationships with the principals of transactions, though I agree with your summary on how those relationships are formed.

+1 to the other Anon's explanation. assumed you weren't asking about it b/c it's not particularly interesting or profitable. DPW did one of these for us back when I was an investment banker - whole thing was a letter, a few emails, and a brief call with a partner whose dog was barking in the background the whole time lmao. I'm sure the junior associate did the whole thing