Election 2024 Could Unleash Surge in M&A - What It Takes for Law Firms to Nail that Business?

 Just as M&A activity is picking up again, law firm Wachtell is losing ground. 

During the first three quarters of 2024, according to Bloomberg Terminal, Wachtell fell from second to seventh place in M&A work. This is especially lousy positioning if Election 2024 results in the non-renewal of FTC head Lina Khan's contract and there is reduced scrutiny of M&A. Corporate interest in M&A could surge. 

Paul Weiss has managed to take the sixth place in M&A work, a slot ahead of Wachtell. Bloomberg Law focuses on Paul Weiss for this ranking. That could be both as a model for how to pounce on the M&A opportunity and also because that law firm overall has reset itself strategically - aggressively and quickly. Its chair Brad Karp has also repositioned himself in a number of ways, be it as a disruptor or as a force of extreme aggressiveness in what it takes to compete in this dog fight of a global marketplace.

Paul Weiss' 3 key strategies which seem to be outfoxing Wachtell are:

Extending the geographical footprint, both internationally and domestically. Incidentally, UK firms such as the Magic Circle group are doing the same thing. The mandate has become: Grow or go. Wachtell is not doing that kind of expansion. Paul Weiss is. The media ate up its sustained raids on Kirkland & Ellis talent for its new London location. There are lots of questions on professional anonymous networks on how to land a job in that Paul Weiss office. 

Ramping up hiring of stars who come with a bulging book of business. Recently Paul Weiss hired 20 brandnames in M&A and PE. Wachtell only hired a bit more than half that number. Stars not only bring the powerhouse brandnames. They bring the actual business. 

Ditching lockstep compensation. To recruit, retain and motivate the stars requires not only high compensation. But that also must be customized to the radiance of the twinkle. A flexible system is needed to facilitate that. Wachtell remains lockstep. 

Opening up a money faucet. Paul Weiss is ensuring there will be the funding to finance its disruptive measures. A giant war chest has become the price of entry for even mere survival.

One way to continue to maintain the war chest is creating the non-equity partner tier at Paul Weiss. That establishes a new source of cash. Actually that is a complaint of those critical of the invention of NEP status. they contend: The firm earns big, at the expense of the NEP compensation. 

In addition, Paul Weiss isn't hesitant to pay out that big money to big talent, despite some pushback. For example, there are rumors of internal tension because of the growing compensation spread among partners. The stars, according to unofficial chatter, can be making up to $20 million.

To try to lower the internal vibrations about compensation, Paul Weiss introduced the controversial black box, which Jones Day also has. However, that black-box concept could be challenged in court if fathers' rights lawsuit "Saviganc, et al. v Jones Day" makes it to a jury trial. First it must try meditation. 

A Paul Weiss weak spot in its new model is its inability to penetrate the lucrative Houston energy market. Its attempts to lure away brandname partners in those firms serving that territory didn't pan out. It will have to conjure up other ways in. Generative AI is raising energy consumption dramatically.

Currently, it is difficult to grow a business organically. The standard has become to import star power to get out of the gate in a high-profile way since they bring with them the business. And that business becomes the subject matter of stories in the establishment media and for chatter on social media and professional anonymous networks.

Another gap could be that long term Chief Marketing Officer Luke Ferrandino has retired from the firm and gone over to competitor Skadden. Until that function is filled - it could be reconstitued - the leadership at Paul Weiss will have to navigate without that specific seasoned guidance. 

The function covered a lot. When I was on retainer for communications assignments at Paul Weiss, I anticipated being able to create value. That didn't happen. After 2 months I pulled the plug. Ferrandino seemed to be too preoccupied with the big picture to focus on how to use my skills to assist Paul Weiss. 

What I did, in desperation to create some kind of work product to justify my existence, was just churn out platitudes on my personal blogs and repurpose them on social media. What was peculiar was this: Although that was an elite law firm it didn't protect itself with my having to sign any form of NDA. After all, I started out my career as a freelance journalist. 

However the search to replace Ferrandino could be an opportunity to, as Apple used to put it, think different. In the law firm sector, unlike what's going on in the Fortune 500, the CMO role has become critical. In the Fortune 500, the CMO function has been eliminated in corporations ranging from UPS to Walgreens. 

In my coaching of lawyers and law-firm staff I have found that the landscape is always changing. That ranges from what the immediate competition is to the software. Can Watchell change enough to recover momentum in M&A work? In addition, what other innovations can we expect for the Paul Weiss business model?

Life is hard. Business is even more difficult these days. Get answers – and relief. Jane Genova is a results-driven intuitive coach, tarot reader and content-creator related to careers. Complimentary consultation (please text/phone 203-468-8579 or email janegenova374@gmail.com)