Law firms experienced a more fantastic market for mergers and acquisitions (M&A) work in the first six months of 2023, with global M&A activity shrinking to $1.3 trillion. This represents the slowest first-half deal-making period since 2020, according to data from Refinitiv.
The total value of global M&A deals dropped by 37% compared to the first half of 2022, as reported by Refinitiv.
However, Latham & Watkins emerged as the leading firm in Refinitiv's top adviser ranking by the value of globally announced deals. Moving up from third place in the same period last year, the Los Angeles-founded firm worked on approximately $173.5 billion worth of deals by the end of June. Latham served as the principal adviser on 238 announced deals, ranking fifth in the number of transactions. Goodwin Procter secured the top spot in this category, acting as the chief adviser on 396 deals worth approximately $46.7 billion.
While the year-over-year comparisons are striking due to a stronger first half of 2022, the second quarter of 2023 showed signs of potential stabilization, according to Matt Toole, the director of deals intelligence at Refinitiv. The report highlights a 33% increase in second-quarter activity compared to the year's first quarter.
Despite the decline in second-quarter M&A activity compared to the previous year, investment bankers and lawyers express optimism that the stock market's recovery will gradually restore confidence among chief executives for deal-making.
Some law firms have resorted to laying off lawyers or staff since late last year to counter declining demand for legal services amid slow deal work. High-interest rates and inflation contributed to the slowdown. Additionally, several technology-focused law firms have deferred the start dates for their incoming classes of first-year associates from the fall to January.
Kirkland & Ellis advanced to the second spot for principal advisers on globally announced deals by value, up from fourth place in the first half of last year. The Chicago-founded firm acted as the principal adviser on 299 deals totaling approximately $158.2 billion during the first half of 2023.
Other firms rounding out the top five ranked by deal value include Paul, Weiss, Rifkind, Wharton & Garrison, Sullivan & Cromwell, and Davis Polk & Wardwell. These firms moved up in the rankings compared to last year.
On the other hand, Wachtell Lipton Rosen & Katz fell to sixth place by deal value, down from its second-place position in the first half of last year. Simpson Thacher & Bartlett, which held the top deal value during the first half of 2022, dropped to eleventh in the latest rankings.
