Here’s how Christopher Keefe, the newly appointed head of Nixon Peabody’s corporate practice, describes last year’s M&A market: “Imagine you have a really nice car, and you are driving down the road, and there is enough space for everyone. Then you pull over to get gas, and you fill up with rocket fuel and get back on the road,” he said. “That was 2018.”
There’s no doubt 2018 was a good year for M&A, with deal values surging past $3.6 trillion for the year, the highest mark in a decade, according to Pitchbook.
This year hasn’t started out quite as hot, at least for most. But Keefe said that, while it may not keep pace with 2018, M&A is still strong, and he expects his practice to grow. “2019 is off to a great start but without the rocket fuel,” he said. “This more of a normalized environment.”
Keefe said he felt that uncertainty over markets has led to a slower pace than last year.
“We like to price things by what we see, and right now we really can’t,” Keefe said. That might not affect deal prices in the short term, he said, but could have more long-term effects, depending on tariffs and trade moves, interest rate pressures and the potential for a recession.
“There are some troubling signals and not much evidence that there is the political will or temperament to come to consensus on policy,” Keefe said. Still, he said, “I’m optimistic that dealmakers will continue to enjoy a good environment in the near future, even after accounting for challenges brought about by market uncertainty. We’re focused on helping our clients achieve their goals regardless of changing conditions.”
As for his new management role at the firm, Keefe acknowledged he is younger than his predecessor, David Martland, who has been with Nixon Peabody for over 24 years. He said that the firm CEO and managing partner, Andrew Glincher, has been good about grooming younger partners to take on leadership roles.
“Demographically, Big Law has seen a degree of graying over the past 10 to 15 years,” Keefe said. “Some firms have struggled with leadership viability and development of that next set of leaders. Andrew has been smart about putting younger people in those leadership roles.”
Keefe also offered some thoughts on the Boston legal scene, which has outpaced the national growth average and doesn’t show any signs of slowing down. ALM Intelligence issued a report last year showing a 79% increase in the number of firms present in Boston, as well as the entry of 26 of the largest 250 firms into the market between 2001 and 2017.
“The growth is a function of the commercial interests that have expanded or come online here,” Keefe said. “When I first started in Boston in the 1990s there were a few super-regional players, but not many national firms.” That has clearly changed.
Life sciences, biotech and other tech businesses continue to be engines for Boston’s boom, with venture capital and private equity fueling and taking advantage of the region’s economy. There is more legal business to be had, and growing competition to get it.
Keefe noted that some of the more recent additions to the Boston market have been taking a more aggressive approach when it comes to securing business. In the past, he said, the difficulty of breaking into the market fostered an atmosphere of co-existence. But he said that has changed recently as outside competitors have poured in, and now firms are having to fight more vigorously for business—and to foster new loyalties.
“When I came to Boston in 1997, I didn’t know anybody,” he said. “The one thing I have to say about Boston is that you have to validate your relationship. You need to be somebody’s “guy”. Relationships are important in Boston.”