European M&A: And then there were four (plus Cleary)

Unfortunately for pundits, the Legal Week/Mergermarket primary adviser table, which tracks advisers with lead M&A roles on Europe’s top corporate deals, is another reminder that the back-of-the-envelope predictions about the legal profession in the mid-1990s were, in the main, boringly spot-on.

The rise of the one-stop-shops, global firms, consolidation and so on... they all seemed so simple - crass even - as trends to define a proud profession. There were plenty who were sure they had identified clever, sophisticated reasons why it wasn’t so with law.

But it was. Take a glance at our breakdown of the lead roles on Europe’s top 200 deals in 2007 and London’s big four clearly dominate. And of this band, Freshfields and A&O have the most to celebrate.

Freshhfields, after all, has topped the tables for three years running, a result that underlines the firm’s unmatched muscle on cross-border M&A in Europe. Not that it was all plain sailing - compared to the utter domination of 2006, when the firm appeared to scoop up every top-level mandate going, Freshfields was this time more closely shadowed by its magic circle rivals.

Likewise, the firm was perhaps surprisingly less visible on the headline deals of the year, instead securing its market-leading ranking across a wide spread of high-end work. Still, with the firm taking roles on one in four of Europe’s largest 200 corporate deals, who can criticise its underlying performance or doubt the scale of the firm's revival since the gloom of 2004-05?

Year-on-year, A&O probably has even more reason for cheer. For a firm that was being recently written off in some circles as a credible top-level M&A player, 2007 must have been a sweet result. The firm secured a range of top mandates and stood up well on both value and volume, securing 30 lead corporate roles with a combined value of €130bn (and that on a criteria that excluded its very substantial role on ABN Amro’s €71bn sale).

Obviously, one good year does not a top-level M&A shop make but 2007 was the first time the firm has really put substance to the claims it has made regarding its corporate development.

In contrast, Linklaters’ performance looks uneven, with the firm securing a handful of roles on the biggest deals of the year but ranking less well than expected on the number of mandates. In truth, the firm’s practice has become the most cosmopolitan of the big four, making its M&A performance harder to judge than rivals. Still, the suspicion is that Linklaters will want to spread itself a little more evenly in 2008 after a year in which the ABN saga sucked in a battalion of its lawyers for acquirer RBS.

The other firm that must be feeling most satisfied is Cleary Gottlieb Steen & Hamilton, which - in contrast to most US-based law firms - has consistently proved a strong performer in these rankings. That is a triumph of substance over style, since the firm has never been very adept at selling itself in London.

But in its own way, having patiently built up a top-notch European network over many years, Cleary’s success is as indicative of the rise of the global firm as its magic rival rivals. Just slightly less predictably so.

alex.novarese@legalweek.com