Bloomberg’s monthly ranking of legal advisers on global M&A deals continues to rankle lawyers from relatively smaller law firms.
As usual, New York and London firms dominate Bloomberg’s list. Skadden, Arps, Slate, Meagher & Flom claimed the top spot for the second consecutive period, with Sullivan & Cromwell coming in second and Linklaters placing third.
Bloomberg’s rankings come from totaling up the value of the deals each law firm worked on. The total value of the deals that Skadden worked on from January through June 30, $361.2 billion, for example, includes the $46.3 billion that InBev has offered to acquire Anheuser-Busch Cos., Skadden’s client.
But the total value of deals does not necessarily correlate to how much money firms make by working on them, said Arnall Golden Gregory partner Sherman A. Cohen, head of his firm’s corporate practice group.
Skadden, of course, will submit a bill to its clients based on the number of hours its lawyers worked, and “if you’re a New York firm like Skadden, and you handle the mega mergers, you’re going to easily be at the top of that group,” Cohen said. “That’s not any kind of rocket science.”
To be certain, he said, the biggest deals involve “every specialty group in the law firm and suck up a lot of peoples’ time, and you bill a lot of hours and you get a big fee.”
But you can’t necessarily infer that Skadden made the most money from its work on M&A deals than other law firms just because the total value of the transactions it worked on was the highest, Cohen said.
Occasionally Wall Street law firms will obtain a premium if they’re working on a multibillion-dollar deal. The lawyers, in those cases, will argue that “the fees from their hourly rates aren’t commensurate with the value of the deal,” Cohen said. But that arrangement is usually limited to the big New York law firms, and isn’t seen often with Atlanta firms, he said.
Bloomberg notes that higher levels of M&A activity mean more work for corporate lawyers. Or, as has been the case in the past six months, less activity means less work. Citing its own data, Bloomberg said global-deal volume in the first half of 2008 declined 36 percent. There were 14,210 deals with an announced value of $1.53 trillion, down from 16,489 deals valued at $2.37 trillion a year earlier. Bloomberg attributed the declines to the collapse of debt and credit markets.
Skadden sits atop the Am Law 100 rankings for gross revenue in 2007 with $2.17 billion.