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Capital Markets Results Are In, And There Are a Lot of Winners

Jan. 7, 2021, 10:30 AM

Happy New Year, and welcome back to the Big Law Business column on the changing legal marketplace written by me, Roy Strom. This week, we look at the firms that got the work in a record-setting year for the Big Law capital markets practice. Sign up to receive this column in your inbox on Thursday mornings.

I wrote a few times in 2020 about the red-hot capital markets practice for Big Law firms. It was a roller coaster year for lawyers who advise on initial public offerings, debt issuances, and other financings.

But now the full annual numbers from capital markets are in, and even if everybody knew what direction they were headed (up), it’s worth sharing the results. That’s because they could help to power a trend we’ve talked about and that we are already seeing in action a week into 2021: The largest, richest firms are investing in talented lawyers to bolster their leading positions.

In the U.S., the value of IPOs priced in 2020 hit nearly $150 billion, up 43% from the prior year.

Between advising issuers and underwriters, four law firms in 2020 advised on U.S.-based IPOs valued at more than $20 billion in total—a feat last accomplished by a law firm in 2012, when Simpson Thacher & Bartlett advised on $25 billion worth.

Davis Polk & Wardwell advised on IPOs valued at more than $30 billion—more than any other firm, according to data compiled by Bloomberg. That is nearly double the value the firm advised on during 2019.

“It was definitely a record year for us in capital markets and a very, very strong year for the firm,” said Michael Kaplan, a member of Davis Polk’s three-person management committee and head of its corporate department.

Latham & Watkins came in at No. 2 by total value of IPO work, advising on more than $23 billion worth, compared to about $7.4 billion in 2019. Kirkland & Ellis and Ropes & Gray also advised on IPOs totaling more than $20 billion in 2020.

Companies navigating an economy stunted by the global pandemic and accompanying lockdowns also issued debt at record levels last year.

There was nearly $2 trillion worth of investment grade corporate bonds issued in 2020, according to data compiled by Bloomberg. That’s up almost 60% from 2019. Davis Polk again led the way, advising issuers and underwriters on deals valued at nearly $500 billion.

It wasn’t just blue-chip companies looking to raise capital. With the pandemic stressing a wide range of industries, lower-rated companies issued high-yield debt, or “junk bonds,” in huge amounts. Nearly $440 billion of high-yield debt was issued—up about 50% from 2019, according to data compiled by Bloomberg.

Cahill Gordon & Reindel advised on nearly $100 billion worth of these deals, leading the way among law firms. Latham & Watkins advised on the second-most, worth nearly $87 billion.

William Hartnett, chairman of the Cahill Gordon’s executive committee, said 2020 was “a very strong year” for the firm in both corporate and litigation.

“It always puts wind in your sails when you finish a very good year,” he said. “But come January 1, we reset the odometer to zero. The challenge will be to continue the upward trajectory, which we are confident we can do.”

Many firms with a highly rated capital markets practice will likely be reporting strong financial years in 2020. That could provide an opportunity to bolster those practices.

Latham & Watkins’ corporate practice chair Marc Jaffe said it was a “record year” for the firm’s capital markets practice, and the firm has already been re-investing in the group. The firm hired Rick Kline and Sarah Axtell from Goodwin Procter in Silicon Valley and San Francisco in November. Last month, the firm hired Ali Haggerty in New York from Cooley.

“That is something we’re going to continue to do,” said Ian Schuman, Latham’s head of capital markets. “We’re going to continue to use our market position to attract talent, and we are really well-positioned to do it.”

Just days into 2021, some of the firms that gained major momentum off capital markets practices last year have already made moves in the lateral market.

Latham hired from litigation boutique Hueston Hennigan up-and-coming partner Steven Feldman, whose clients have included Peleton Interactive Inc. and T-Mobile US Inc. Davis Polk also struck early with the hire of Daniel Stipano, an ex-Buckley LLP partner and former longtime official at the Office of the Comptroller of the Currency.

Many in the industry have told me they expect a surge in hiring this year, as Big Law’s higher performers continue to pull even further ahead of those that didn’t fair quite so well in the upheaval brought by 2020.

Worth Your Time

On the Election: Foley & Lardner’s Cleta Mitchell was embroiled in controversy this week after her work with President Trump to overturn the election was laid bare by her presence on his controversial phone call with the Georgia Secretary of State. She resigned from the firm on Tuesday, and in an exit memo blamed “leftist groups” for a pressure campaign.

On In-House Compensation: Apple Inc. General Counsel Katherine “Kate” Adams received a total compensation package of more than $26.4 million from the tech giant in 2020, my colleague Brian Baxter reports. It was a year in which the iPhone-maker posted record revenues of $274.5 billion and also faced myriad legal issues.

On Activism Defense: Sidley Austin was the most active law firm defending companies against activist investors, according to Bloomberg data. Wachtell Lipton Rosen & Katz and Vinson & Elkins followed directly behind.

On Law Firm Mergers: Law firm mergers plunged last year by 43%, according to an Altman Weil MergerLine report. The report pointed to the coronavirus pandemic as the culprit and indicated there could be more firm combinations this coming year due to a “pent-up appetite for growth.”

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

To contact the reporter on this story: Roy Strom in Chicago at

To contact the editors responsible for this story: Rebekah Mintzer at; Chris Opfer at