M&A is back in the headlines among the legal trades.
“In-house counsel and investment bankers agree that the merger and acquisition stars are aligning to create an environment more conducive for deals, according to one M&A expert,” according to ALM’s Corporate Counsel in an article titled Big Deals Put 2014 M&As at $2.5 Trillion and Rising.
The Corporate Counsel article is based on a new report by Mergermarket – Global and regional M&A: Third quarter 2014 (PDF) – and “echoes similar M&A surging trends reported by Thomson Reuters and Bloomberg this month.”
Those echoes noted some of the largest law firms worked on some of the largest deals – and the large deals appear to be heating up.
The Am Law Daily reported, “According to Thomson Reuters, the total M&A value worldwide has surged to $2.7 trillion in the first nine months of 2014, representing a 59 percent increase from the comparable period in 2013, the strongest percentage gain since the first nine months of 1998.”
Indeed, it does seem M&A is back in business of law vogue.
Where are the M&A Billings going?
Our latest ELM trends report released in August – examined invoice data from the full year 2013 and found that M&A billings almost doubled as a percentage of legal spend. However, the data indicates the “second largest” law firms saw the biggest gain and greatest share of M&A billings. Moreover the trend was even more prominent when examining only high-value M&A fees. High value is characterized as outside counsel billings greater than $1 million.
Kris Satkunas broke down the meaning behind the metrics in a 40-minute webinar which was posted to YouTube and is embedded nearby. Writing for InsideCounsel – A Year of the Second Tier for high-value M&A work – she sums up what the findings mean:
“M&A matters, once considered the holy grail of legal work, are not only growing in numbers, but being handed over to some very capable yet more affordable law firms. This change in the status quo points to an overarching shift in perception by GCs and their legal teams that they need to get both the best outcome and the best price. At the end of the day, who can really argue with that?”
The complete infographic from the study – based on $15 billion in legal spend and 3 million invoices, representing 450,000 matters gathered over the past 5 years – is posted nearby and it’s this week’s Friday Share.
If you enjoyed this post you might also like:
What are the Going Law Firm Rates by Practice Area?