Wachtell's slide down M&A ranks tests storied law firm's model

The strategy that has made Wachtell the country’s most profitable law firm challenges its ability to reclaim a top spot among M&A dealmakers.

Wachtell, Lipton, Rosen & Katz is seventh in Big Law rankings for mergers and acquisitions work through three quarters this year. That’s down from the second spot, which Wachtell has held on to Bloomberg Law’s league tables in each of the last three years.

The 60-year-old Manhattan firm cemented itself as an elite corporate adviser by keeping its focus narrow. It has stuck closely to its model as rivals scaled up, chasing new lines of business and overhauling pay systems to court rainmakers.

“What may be threatening to them is not having relationships with new money,” said law firm adviser Peter Zeughauser . “That’s what they need to crack—maybe that’s through laterals or through a more proactive relationship in the financial community.”

Kirkland & Ellis, the private equity deals behemoth that’s pushed Big Law’s race to scale, is on track to rank No. 1 in M&A transactions. That would be the third time Kirkland has topped the list in the last four years since overtaking Wachtell. Wall Street’s Simpson Thacher & Bartlett was the lead M&A adviser in 2022, before Kirkland regained the first spot last year.

Wachtell, which was the country’s most profitable last year at $8.5 million per equity partner, is unlikely to make a major pivot. Its new leaders, William Savitt and Andrew Nussbaum, touted the firm’s “position of great strength” when they took over nearly a year ago and said their goal is to “sustain its success.”

Lawyers’ $2,000 Hourly Rates Crimp Big Law’s Appetite for Risk

Welcome back to the Big Law Business column. I’m Roy Strom , and today we look at why large firms are reluctant to take on contingency fee cases. Sign up to receive this column in your Inbox on Thursday mornings.

Big Law litigators have a great business model. They bill by the hour, and they collect fees whether their clients win or lose.

A possible downside is that their returns are capped by the number of hours they can work.

To boost their returns, and to keep pace with the surging profitability of major corporate practices, a handful of large firms have delved deeper into contingency fee cases. Kirkland & Ellis is one prominent example. The firm has taken on more plaintiff-side work since announcing its entrance into that business five years ago.

By representing plaintiffs and getting a potential reward for winning the case, Big Law firms can juice their litigation revenue. But taking risk is not Big Law’s strong suit.

Read more here.

Paul Hastings, Simpson Thacher Plot Boston Growth Strategies

Paul Hastings is leasing new space in Boston to accommodate its growth as Simpson Thacher aims to triple its lawyer headcount there within three years, showing Big Law is deepening its commitment to the city.

Paul Hastings will occupy the 49th floor at 200 Clarendon, known as the John Hancock Tower in early December, leaders at the firm said in an interview, without disclosing the length of the lease.

Paul Hastings entered the Boston area this spring with the hires of Sidley Austin private equity partners Alexander Temel and William Schwab. The firm’s Boston outpost has since added M&A partners Andrew Goodman and Ian Engstrand from Goodwin Procter. Two first-year associates came aboard this week, Schwab said, for a current total of 11 lawyers.

Simpson Thacher & Bartlett, after years of counseling Boston-based clients like Fidelity Investments on registered funds matters, established a presence in the city in May by recruiting registered funds partner Kenneth Burdon from Skadden.

The firm currently has eight lawyers in a shared workspace at 855 Boylston Street it has occupied since September. The firm expects a total of 12 lawyers by the end of the year, said David Blass , who co-manages the Boston office with Joshua Ford Bonnie.

Paul Hastings and Simpson Thacher are the latest in the Am Law 50 to have opened offices in Boston in recent years, following entrances by Covington & Burling, Arnold & Porter and Akin Gump Strauss Hauer & Feld. Covington currently has the most boots on the ground with a team of 18 lawyers.

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