Large law firms rode high on record year for M&A dollars

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Law firm of Sullivan & Cromwell in Manhattan, New York, U.S. REUTERS/Andrew Kelly

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  • Sullivan & Cromwell advised on the most announced deals by dollar value in 2021
  • Goodwin Procter worked on the highest number of M&A transactions

Jan 5 (Reuters) - The number and value of global mergers and acquisitions hit a new peak last year, boosting transactions practices at large law firms like top-ranking 2021 dealmakers Sullivan & Cromwell and Goodwin Procter.

Total M&A activity reached more than $5.9 trillion according to year-end data from Refinitiv, the strongest showing since tracking began in 1980. This was a 64% jump over 2020, the data compiled Dec. 31 showed.

New York-based Sullivan & Cromwell was an advisor on $662.5 billion worth of announced deals, the most in total dollar value of any firm last year.

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The data said Boston-founded Goodwin Procter worked on 1,083 deals, the most by number.

Over 63,000 M&A deals were announced during 2021, another record, according to Refinitiv.

“Looking at the numbers, law firms have never been busier,” Matt Toole, Refinitiv director of deals intelligence, said.

Deals in the technology, financial, industrial and energy industries accounted for much of M&A volume. Decreased lending rates also resulted in cheaper financing for deals, which encouraged acquirers to pursue more transactions.

Toole said that private equity made up 20% of all M&A activity last year, the sector’s highest percentage of deal volume since Refinitiv began keeping records.

He said some buyers used M&A to address business weaknesses highlighted by COVID-19.

Some of 2021’s largest M&A transactions contributed to Sullivan & Cromwell’s top ranking, including AT&T's $43 billion deal to merge WarnerMedia with Discovery and Canadian Pacific Railway’s $31 billion acquisition of fellow rail operator Kansas City Southern.

The firm surpassed Davis Polk & Wardwell, last year's top advisor by volume, according to Refinitiv data. Davis Polk has now dropped to No.4, below Kirkland & Ellis at No.3 and Latham & Watkins at No.2.

When Refinitiv data was pared down to the lead law firms on 2021 deals, Kirkland came out on top, steering roughly $548 billion in 2021 in 968 transactions. Latham had the highest volume of deal lead work in 2020.

The surge in M&A has been one driver of increasing competition to hire law firm associates that has shown no signs of slowing.

“We saw unprecedented deal flow in 2021 and expect to see that continue at least through the middle of 2022,” Luke Bergstrom, Latham’s global M&A co-chair, said in a statement.

Global M&A volumes hit record high in 2021, breach $5 trillion for first time

Goodwin Procter, Sullivan & Cromwell M&A teams shine in deal boom

White & Case takes lead on global deals amid 1H M&A surge

Latham leads deal advisor rankings as M&A hits Q1 high

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Sierra Jackson reports on legal matters in major mergers and acquisitions, including deal work, litigation and regulatory changes.