Big Law’s IPO Oligopoly Emerges as Market Roars Back

Welcome back to the Big Law Business column. I’m Roy Strom, and today we look at the firms advising on the latest string of initial public offerings. Sign up for Business & Practice, a free morning newsletter from Bloomberg Law.

Companies are once again rushing to go public, and a handful of top law firms are helping—clearly showing the dominance of the biggest legal operations.

Six companies raised more than $285 million through initial public offerings last week, making it the busiest stretch of new public listings in the US since 2021. Each deal requires at least two law firms: One to represent the company and another to represent the underwriters, or banks who package up the deals.

Out of those 12 plum positions up for grabs last week, just four top 100 law firms by revenue worked on the deals: Latham & Watkins, Davis Polk & Wardwell, Skadden, and Kirkland & Ellis. Brownstein Hyatt Farber & Schreck, a top 200 firm by revenue, also had a role in two of the deals.

It’s no surprise to find those firms listed on major IPOs. Latham and Davis Polk have been the busiest firms on company and underwriter-side representations for most of the past decade or more, according to data compiled by Bloomberg, and Kirkland and Skadden haven’t been far behind.

The exclusion of other firms raises important questions for the broader market: Has the practice grown significantly more concentrated after years of slow activity? And how much will the work broaden out among more firms if the IPO market stays hot?

Lawyers from the top four firms say they have seen the IPO market grow more concentrated as fewer companies go public and those that do stay private longer than ever before.

Private companies growing larger are more frequently engaging big firms to handle funding rounds or other complex financings, the lawyers said. Lawyers at those firms are working on earlier transactions for the companies while preparing for public life, they said, making them the natural choice to work on any eventual IPO.

“That, in many respects, is our unique competitive advantage,” said Ian Schuman, global chair of capital markets and public companies representation at Latham. “I’m optimistic we’ll press that advantage as the IPO market continues to improve going into next year.”

Still, nobody expects the market will remain as concentrated as it was last week. It’s already broadened out.

At least four major IPOs were scheduled to begin trading this week, and work on those deals included other firms, such as Cooley, Wilson Sonsini, Goodwin Procter, and Gibson Dunn. Cooley, Wilson Sonsini, and Goodwin Procter, in particular, have historically had strong relationships with tech startups, making them solid brands for IPOs.

Those tech-focused firms have maintained their model of working with young companies through an IPO.

What has arguably changed most over time is the concentration of underwriter-side work among fewer firms, which has affected traditional New York players such as Cravath Swaine & Moore, Sullivan & Cromwell, and the firm formerly known as Shearman & Sterling.

Those three New York firms were among the top four underwriter-side advisers in 2000 by deal value, according to Bloomberg league tables. None have ranked inside the top 10 over the past five years.

StubHub Takes Leap

StubHub, which listed its shares publicly on Wednesday in a deal that raised $800 million, exemplifies a company with significant pre-IPO transactions that were handled by major firms. Its 2019 merger with Viagogo involved Wachtell, Lipton, Rosen & Katz, Quinn Emanuel, Skadden and Kirkland.

StubHub pursued a direct listing in 2022, and delayed its IPO this year in April following President Donald Trump’s tariff rollout. Latham advised StubHub on the IPO while Cooley represented the underwriters in the deal.

“These are not small deals,” said Bob Hayward, a Chicago-based Kirkland capital markets partner. “So, you are going to see companies move toward the law firms that have proven track records on large, complex, high-profile deals, especially ones that are supported by sophisticated investors like private equity firms.”

Hayward said one client that’s preparing for an IPO called him after seeing his name listed on the regulatory documents [or S-1] of a peer company he helped take public. The company’s founder had used a regional firm for its corporate legal work but wanted a larger firm with more IPO experience to handle such an important deal.

“I am seeing more of that than I ever have before,” Hayward said.

The IPO practice has seen a “pattern of concentration” among a small group of firms, said Maurice Blanco, Davis Polk’s capital markets co-head. He attributed the trend to investments in the practice by those firms and the shift in companies staying private longer.

“We’re seeing a lot of [companies] upgrade their counsel well before the IPO and begin to work with larger firms,” Blanco said. “They’re just doing larger, more sophisticated and higher-value deals.”

Ryan Dzierniejko, global head of Skadden’s capital markets practice, said he expects IPO activity will remain robust well into next year. There’s still a backlog of companies that have filed their plans to go public with the Securities and Exchange Commission.

“We have a very busy fourth quarter ahead of us at Skadden,” Dzierniejko said.

Worth Your Time

On Ropes & Gray: The law firm hired Kirkland & Ellis M&A partner Michael Brueck as it continues to bolster its New York office, seeking to round out the industries in which it advises on major deals.

On Dunn Isaacson Rhee: Leaders of the Paul Weiss spinoff spoke to Tatyana Monnay about their plans for their new boutique firm.

On Walmart: The retail giant will be looking for a new top lawyer as Rachel Brand prepares to leave next year, Brian Baxter reports.

That’s it for this week! Thanks for reading and please send me your thoughts, critiques, and tips.