Debevoise Corporate Head Sees Deals Slowing to ‘Healthy’ Level

Debevoise & Plimpton is feeling the effects of a drop in deals activity as a slowing economy crimps transactions though is optimistic a healthy flow remains, the new leader of the firm’s corporate group said in an interview.

“Deal volume has fallen, but it’s important to look at that drop through a longer term perspective,” said Matthew Kaplan, a capital markets attorney who took leadership of the firm’s corporate group this month.

“Volumes are more or less in line with pre-pandemic levels, which in our view were still healthy,” he said. “Our outlook remains optimistic.”

Kaplan, a 25-year veteran of the firm who previously led its capital markets group, succeeds partner Jeffrey Rosen, who has taken the role as senior chair of the corporate department, according to a Debevoise statement.

Kaplan has worked on some of the firm’s biggest deals in recent years, including aspects of Discovery’s $43 billion acquisition of WarnerMedia from AT&T Inc.

His promotion is the latest internal leadership change at the 91-year-old Wall Street firm. In July, tax lawyer Peter Furci became presiding partner, replacing Michael Blair, who had led the firm since 2011.

Nicole Mesard, former deputy chair of the firm’s corporate practice and chair of the firm’s hiring committee, became deputy presiding partner that same month.

Kaplan takes over following a period of rapid revenue growth in the firm’s corporate department but as a bleaker economic picture drives a marked drop in the pace of deals and initial public offerings.

US mergers and acquisitions are set to slide for the sixth consecutive quarter to levels last seen at the start of the pandemic, Bloomberg News reported Oct. 6. The roughly $212 billion in deals announced in the past three months was the lightest period since the second quarter of 2020, according to Bloomberg.

Debevoise advised on 48 deals worth roughly $123 billion in the first nine months of 2022, down from the 86 deals worth $152 billion during the same time period last year, according to Bloomberg data.

Kaplan acknowledged that firms are not immune to the broader economic conditions. But he said Debevoise isn’t feeling pressure on its attorney headcount. The corporate department, which houses M&A, finance and banking, and makes up about half the firm’s size, is “rightsized” for the current pace of work.

“While we did see an uptick in the size of our associate class the last couple of years, we were very careful not to overhire and overstaff,” he said. Debevoise did not go “all in” on the special purpose acquisition companies, or SPACs, which saw a dramatic spike in activity in 2021 but have trailed off this year.

Still, Kaplan said that he remains optimistic about SPACs and the opportunities for investment there. He also noted that private equity firms continue to sit on a “fair amount of dry powder,” which is likely to translate to a healthy flow of deals in the coming months.