Welcome back to the Big Law Business column on the changing legal marketplace written by me, Roy Strom. Today, we look at a practice that combines many of the trends we’ve talked about recently: A surge in capital markets work, a fight for Big Law talent, and balancing huge workloads. Sign up to receive this column in your inbox on Thursday mornings.
Plenty of Big Law partners are feasting on a surge in initial public offerings this year. Bob Hayward stands out because of where he is doing that work: Chicago.
The Kirkland & Ellis partner has been advising on IPOs for more than 20 years. Like a lot of lawyers, he’s never been busier than in the past 18 months. An all-time high of nearly $350 billion was raised in the first half of the year, Bloomberg has reported, surpassing the previous six-month mark set in the second half of 2020.
To deal with the surge in work, Hayward’s team in Chicago has doubled to 40 capital markets lawyers. He’s hired homesick Midwesterners from both coasts and lawyers in smaller cities where Kirkland doesn’t have offices.
For lawyers and Midwest companies looking for a local option, Hayward has a simple sales pitch: His team is pretty close to the only game in town. The IPO practice is dominated by lawyers in New York, Silicon Valley, and Asia.
Kirkland lawyers based in The Windy City have led a dozen companies through IPOs during the past 18 months, according to Deal Point Data, a research service that tracks deal announcements. No other lawyers based in Chicago have handled more than one.
Among the 26 lawyers Deal Point Data says have led the most company-side IPOs in the last 18 months, Kirkland’s Hayward and partner Robert Goedert are the only two based in the Midwest. Hayward has worked on the seventh-most deals. (The data doesn’t count special purpose acquisition companies.)
“We can do it in the heartland just as well if not better than you can do it on the coasts,” Hayward said. “And that has been an attractive feature for a lot of the companies we’ve been able to take public.”
Hayward is a Chicagoan to the core. He’s proud of his connections to Northwestern University that run as far back as a great aunt who graduated from the Chicagoland campus in 1879.
Hayward’s team has helped two companies founded in Chicago list their shares on public markets over the past 18 months. It led on Ryan Specialty Group’s $1.5 billion IPO and Oak Street Health Inc.’s listing raising $377 million.
Still, his practice has California connections that date to the firm’s San Francisco expansion in 2002. A group of the firm’s Chicago partners, including David Breach, Steve Oetgen, and former firm chairman Jeff Hammes, led the firm West to open the San Francisco office. They turned to Hayward’s Chicago-based team for West Coast clients’ capital markets work.
Today, Kirkland has close relationships with Vista Equity Partners, Francisco Partners, and Golden Gate Capital, among other buyout shops with large West Coast presences. Breach is now president and chief operating partner at Vista. Oetgen is managing director and general counsel at Golden Gate Capital.
Hayward’s team over the past 18 months has led on IPOs for at least five Vista-backed companies: PowerSchool Holdings Inc., which raised about $711 million in its public listing, Datto Holding Corp. ($594 million), Jamf Holding Corp. ($468 million), Integral Ad Science Holding LLC ($270 million), and Ping Identity Holding Corp. ($188 million).
“Through my involvement with those offices from Day Zero, I was able to build up my team in Chicago with ‘A’ players to support not only our private equity clients and companies in the Midwest, but also our clients out of California,” Hayward said.
The pandemic and an ensuing surge of work has changed a lot about how Hayward works.
He manages his team’s schedule virtually via Monday morning Zoom meetings. He has new team members calling in from new places.
He said the lack of capital markets work done out of Chicago in recent years made it difficult to find enough lawyers there to staff his deals. So when deal flow picked up early on in the pandemic, he initially turned to recruiting from the coasts.
He targeted Midwesterners.
“I said ‘I’ll offer you a great opportunity to do serious capital markets work in the heartland of America,’” Hayward said. “I started hiring people who were stuck on the coasts.”
When that talent pool dried up, he turned inland. He’s hired eight lawyers in places Kirkland has no official office: Milwaukee, Minneapolis, Indianapolis, Nashville, Atlanta, and Kansas City, Mo.
Hayward said he recognizes his team has been working long hours during this record stretch of deals. Even after more than two decades of working in Big Law, he said juggling four “balls” of responsibility—work, family, health, and friendships—remains one of the most difficult aspects of his job.
“What I tell my team members is of those four balls I mentioned, there is only one that if you drop will bounce back,” he said. “And that’s work.”
Still, it’s a delicate balance, considering the opportunity lawyers have to get “game-changing” opportunities, he said. This intense work period may never happen again. And the experience they’re getting could jumpstart their careers, he said.
“I have associates who’ve worked on more IPOs than many senior partners at law firms around the country in a 14-month period of time,” he said. “That is experience that is priceless. You can’t teach it in law school, in a classroom, and you certainly can’t learn that skill by doing one IPO every year. You only get that experience by doing multiple transactions over and over again.”
Worth Your Time
On the Big Four: Sam Skolnik spoke with Steve Kimble, U.S.-based CEO of Deloitte Tax, who said the Big Four accounting giant is not ready to practice law in the U.S. Kimble said it was not practical to build a business around the few states that have changed their rules around non-lawyers practicing law.
On Big Law Confidence: Law firm leaders are more confident than a year ago that they will meet their financial goals this year, according to a Bloomberg Law survey. More than 80% of leaders are confident they will meet budget this year, compared to 62% last year—when Big Law set post-2009 financial performance records.
On the Bar Exam: ExamSoft is “deeply sorry” for glitches that crashed bar exams this summer, Skolnik reports. The firm faces the threat of a class-action lawsuit after test takers in 28 states suffered malfunctions.
That’s it for this week! Thanks for reading and please send me your thoughts, critiques, and tips.