THE CORPORATE SCORECARD 2008

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Suddenly, Last Summer

Dealmaking in 2007 had a distinctly Jekyll-and-Hyde feel. Up to mid-summer, the deal environment was as crowded and frothy as the morning rush at a Times Square Starbucks. Private equity buyers were tapping a seemingly bottomless supply of credit to fuel a record volume of deals. But then, triggered by factors including the collapse of two huge hedge funds, the door to easy money slammed shut. Large leveraged deals made a sudden exit, and deal volume sank by nearly two-thirds.

Despite the topsy-turvy deal flow, there was little movement at the top of our league tables. Sullivan & Cromwell led in value of deals with at least one U.S. principal, posting 14 percent greater deal value than last year. Wach­tell, Lipton, Rosen & Katz rose to second, and Skadden, Arps, Slate, Meagher & Flom dropped to third, with a slight drop in deal value. But Skadden again ranked first in deal volume.

In our rankings of counsel to investment advisers by volume, the top three firms remained unchanged. Dewey Ballantine, now merged into Dewey & LeBoeuf, headed the list, with deal volume and value both up, as its long ties with such investment banks as Credit Suisse, UBS AG, and Lehman Brothers paid off. "Our work stayed pretty steady," says Morton Pierce, Dewey's M&A chair. Latham & Watkins and Sullivan & Cromwell once again stood at second and third, respectively.

But there was jostling just beneath the top three. With some of the largest deals of the year involving Canadian companies, Stikeman Elliott and Blake, Cassells & Graydon both made the top ten in deals for principals. Stikeman, which ranked sixth, was Canadian counsel to BCE Inc. in its buyout by a private equity consortium and to Alcoa Inc. in its acquisition with Rio Tinto Group of Alcan Inc., the first- and fourth-largest deals. And, also driven in part by the $46.8 billion BCE deal, Fried, Frank, Harris, Shriver & Jacobson and Weil, Gotshal & Manges both saw their rankings soar. Fried, Frank surged on work with longtime client Goldman Sachs & Co., Inc., the top-ranked financial adviser by value of deals. Meanwhile, Simpson Thacher & Bartlett, which was ranked eighth last year as counsel to investment advisers, and Mayer Brown, which was ranked tenth as counsel to principals, did not appear on this year's list.

The second half of 2007 wasn't all bad news. Getting from signing to close¿or unwinding deals gone sour¿kept many deal lawyers busy. And firms saw more strategic buyers and non¿U.S. investors angling for American businesses, producing a more measured, smaller-cap deal flow at year's end. But as the credit crisis continued to unfold in 2008, deal veterans saw top-tier M&A practices reaching further down to maintain their deal flow¿leading to more competition for deal work at every tier. The slowdown, says Robert Schwenkel, Fried, Frank's corporate chair, "is going to affect everybody, up and down." - Julie Triedman

Mergers & Acquisitions: Counsel to Principals
Firm Value of deals in millions Rank 2007 Rank 2006 Number of deals Rank 2007 Rank 2006
Sullivan & Cromwell $368,747 1 2 61 5 5
Wachtell, Lipton, Rosen & Katz 337,325 2 3 61 5 8
Skadden, Arps, Slate, Meagher & Flom 315,884 3 1 127 1 1
Simpson Thacher & Bartlett 297,567 4 4 79 3 5
Weil, Gotshal & Manges 218,890 5 11 58 9 3
Source: Thomson Financial

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Mergers & Acquisitions: Counsel to Investment Advisers
Firm Number of deals Rank 2007 Rank 2006 Value of deals in millions Rank 2007 Rank 2006
Dewey & LeBoeuf1 83 1 1 $227,388 1 7
Latham & Watkins 50 2 2 134,921 3 6
Sullivan & Cromwell 39 3 3 124,416 4 5
Fried, Frank, Harris, Shriver & Jacobson 23 4 9 107,794 5 10
Davis Polk & Wardwell 22 5 6 210,317 2 9
Source: Thomson Financial
1 The 2006 ranks are for Dewey Ballantine, which merged with LeBoeuf, Lamb, Greene & MacRae in October 2007.

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