Private Equity Marches On

Over a year on from the start of the Covid-19 crisis, a clearer picture is beginning to emerge on the shape and scope of the pandemic's impact on the legal industry. While some practice groups experienced demand ratchet upwards, including in bankruptcy, restructuring and insurance, received wisdom would usually indicate that transactional practices would struggle, amid unprecedented levels of market uncertainty and an approach to deal-making which traditionally favoured in-person exchanges.

In reality, however, 2020 saw the private equity industry buck those anticipated trends. While the early days of the pandemic saw private equity attorneys pivot from fundraising and investment work to advising sponsors on Payment Protection Program loans and shoring up their portfolio companies, with a commensurate fall in deal value and deal volume through the spring, an explosive third and fourth quarter saw practitioners working night and day to finalize deals as we entered into 2021, fuelled in part by significant growth in the technology and life sciences industries. Indeed, Chambers USA 2021 saw an 8% increase in law firm submissions for its Nationwide Private Equity research in late 2020, indicating robust performance over the preceding 12 months despite the challenging conditions.

The resilience of the private equity sector, and therefore the corresponding legal market, has drawn close attention to a thriving and rapidly expanding practice area, with an array of firms carving out dedicated private equity transactional practices and bolstering their teams through external hiring over recent years. Local markets in Boston and the Texas Triangle area have seen significant growth in recent years, while lateral hiring continues apace in traditional strongholds such as New York, Chicago and in California.

At the forefront of this geographic growth is industry-leader Kirkland & Ellis, which in 2014 opened its Houston office with private equity veteran Andrew Calder, followed swiftly by new locations in Boston, housing highly rated deals attorneys Armand Della Monica and Christian Atwood, in 2017 and in Dallas in 2018 with another team of transactional experts. Meanwhile Debevoise & Plimpton announced its intention to open a Bay Area office, including a group focusing on transactional and fund formation matters for investor clients, while firms including Sidley Austin, Goodwin, White & Case and Simpson Thacher, recognized alongside Kirkland as one of the two premier Band 1 firms in the Nationwide Private Equity Buyouts legal rankings, reinforced their groups through lateral hiring.

The Chambers USA Guide has tracked these changes over recent years, seeing increased numbers of firm and individual rankings in our private equity coverage, as well as opening up research in new jurisdictions where law firms have capitalized on thriving local markets.

Individual rankings have also seen an increase, as seen below, with private equity transactional tables in California, Illinois, Massachusetts and nationally highlighting growing numbers of expert practitioners in this sector.

While this may lead to congestion at the top end of the market, with a number of firms looking to compete for plum deal-side roles for some of the industry's biggest investment firms, the ever increasing number of mid-market transactions and the number of private equity firms targeting this segment indicates that more firms may see building a team of high-quality, specialist private equity deals lawyers as an enticing route to grow their broader transactional practices.

The Chambers USA 2021 Guide will continue to offer specialized private equity tables in California, Illinois and Massachusetts, while also rolling out new dedicated tables in New York and Texas, as well as a nationwide table highlighting top choices for bulge-bracket transactions and mid-market deals. We also offer composite transactional rankings, highlighting top-rated firms and individuals in private equity and strategic M&A transactions, in Pennsylvania, Florida and the District of Columbia.