Corporate Legal Activity Should Report Rise on Heels of Most Recent M&A, IPO Data

A few weeks ago, I talked about some positive indicators for the corporate legal market—an increase in initial public offerings, corporate bond issues and consumer finance lending.

Those positive indicators were reinforced by reports today.  The Financial Times reported a jump in global private equity buyout activity of 19.1% year over year, and in a separate article, The Financial Times reiterated the strength of the U.S. IPO market, noting that “The pipeline of companies to go public now stands at 129 deals, versus 49 deals this time a year ago, says Dealogic.  That is the longest line since mid-2008.”  And the U.S. M&A market as a whole already has approximately 3.9% more deals (measured by value) than it did for the entire year in 2009, according to Mergerstat.

In addition, the last several months of any year are traditionally among the busiest, as companies and private equity buyout shops attempt to close deals by year end and make desired adjustments to their balance sheets.

While it’s clear that the corporate legal market won’t have recovered to levels matching the dizzy years of the middle of the last decade, all of this is good news for the activity of the (usually) large law firms that handle the bulk of M&A and IPO activity.  Presumably, it will be good news for their revenues and profits as well, especially since most such firms have substantially fewer lawyers and staff than they did a couple of years ago.

Over the medium- and long-term, if the uptick in activity continues, the hiring market may improve somewhat as well, not only at the firms handling the bulk of this business, but—because of the status of large law firms as market-movers—for lawyers who hope to work in government, at smaller firms, and elsewhere in the private sector legal market.

~ by Kyle Pasewark at Advise-in Solutions on September 27, 2010.

One Response to “Corporate Legal Activity Should Report Rise on Heels of Most Recent M&A, IPO Data”

  1. […] Some of what Hildebrandt says is undeniable—law firms are businesses that want to make a profit and will look for the most efficient ways to do that; law firms will generally follow economic trends.  Yes.  How that gets Hildebrandt to its numbers is a mystery.  In fact, its conclusion seems a bit at odds with the recent uptick in the drivers of corporate legal activity (M&A activity and IPOs) that were reported in The Financial Times (and on this blog). […]

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