Sullivan & Cromwell and Goodwin Procter have taken top spots among law firms advising on global M&A deals in the first half of 2022, as dealmaking continues to drop following last year's highs.
Global M&A activity dipped 21% to a total of $2.2 trillion in the first half of the year compared to the same period in 2021, according to new data from Refinitiv.
M&A activity has slowed amid Russia's invasion of Ukraine in February and growing fears of a future economic recession.
New York-founded Sullivan & Cromwell advised on $356 billion worth of announced deals in the first half of 2022, the most by total dollar value of any firm.
The firm also handled the highest total dollar amount of deals last year.
Sullivan & Cromwell advised on 88 deals so far in 2022. The firm advised First Horizon Corp in its $13.4 billion acquisition by Toronto-Dominion Bank Group and Biohaven Pharmacuetical Holding Co in its $11.6 billion acquisition by Pfizer.
Melissa Sawyer, global head of Sullivan & Cromwell's M&A group, said in an emailed statement companies are seeing dealmaking benefits "despite the challenging regulatory environment and the volatility in macro indicators."
The Refinitiv data includes all deals on which the firms advised, not just those for which they were principal advisor.
Simpson Thacher & Bartlett took the No. 2 spot by total deal value in the first half of the year, advising on 111 deals worth $325.3 billion.
The New York-founded firm worked on major deals including Microsoft Corp's bid to buy video game maker Activision Blizzard Inc for $68.7 billion, the largest announced M&A transaction so far this year.
Boston-founded Goodwin advised on 553 announced deals in the first half of the year, the highest number of any law firm, according to Refinitiv data.
Kirkland & Ellis followed Goodwin with 410 deals in the same period, the data showed.
Law firms saw high demand for corporate work in 2021, when total M&A activity reached a new peak of more than $5.9 trillion for the year. Many large firms rapidly hired associates, offering rounds of bonuses and salary raises to attract and retain talent.
Firms are still hiring, albeit at a slower pace, but are "getting more picky," said Stephanie Biderman of legal recruiting firm Major, Lindsey & Africa.
Despite the M&A slowdown and economic clouds on the horizon, law firms so far don't appear to be talking about cutting headcount, according to Biderman and two law firm consultants.
They said firms will avoid losing too many deal lawyers, as even an extended M&A slump will eventually reverse.
Still, law firms may have to make some adjustments.
"You put unprecedented [compensation] together with lower, potentially substantially lower hours, and it's just tough to square without changing something," said Bruce MacEwen of law firm consultancy Adam Smith Esq.
