Sell Side

Smaller Law Firms Move Up

OCT 14, 2011 6:44pm ET
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While larger law firms have mostly kept their top-10 spots in the municipal bond counsel rankings, it’s the smaller firms that have made a splash this year.

Quarterly Tables

Orrick, Herrington & Sutcliffe LLP retained its top spot for the first three quarters of this year, a position it also held for the first three quarters of 2010.

But standout performances include Foley & Lardner LLP and Ice Miller LLP, each of which jumped about 25 spots forward from last year. These smaller firms were two of only three firms to actually increase the dollar amount of bond deals worked on, despite lower issuance.

Orrick provided bond counsel on 241 deals for $18.1 billion for the first three quarters, down from the 292 deals and $29.4 billion it did last year. While market share was cut to 9.7% from 9.9%, the firm doubled the amount from the number two and three spots.

In the third quarter alone, Orrick participated in $9.4 billion of deals and had a 12.9% market share.

Roger Davis, head of public finance at Orrick, said municipal issuance is down across the board and one of the reasons it has affected Orrick is its biggest client, California, did not come to market at all in the first half of the year.

“California issuance is down much more than the market as a whole due to a conscious effort on the part of [Gov. Jerry Brown] to manage debt and cash flow by slowing and reducing the amount of borrowing in 2011,” Davis said.

Even though California’s issuance is down over 60%, Orrick’s overall dollar volume is down only 35% — on par with the overall market. While the number of issues in the market is down about 25%, Orrick’s numbers are down significantly less.

Kutak Rock LLP, which came in second place after Orrick, worked on 137 deals worth $9.9 billion, increasing market share to 5.3% for the first three quarters of the year. That is up from its 3.3% of market share in the first three quarters of 2010, when the firm placed sixth.

Coming in a close third place was Hawkins Delafield & Wood LLP, which participated on 169 deals worth $9.1 billion. The firm slid in the rankings from the first three quarters of 2010, when it placed second by working on $14.1 billion.

While many of the lower-ranking law firms in 2010 didn’t make it into the top 10 this year, there were noticeable jumps in the rankings by firms that have been making a concerted push into the muni bond counsel space.

Foley & Lardner, which placed 15th for the first three quarters of 2011, participated in $2.8 billion of deals, up from when it ranked 42 for the first three quarters of 2010 by working on $1.6 billion. The firm also increased market share to 1.5% from 0.6% in the first three quarters.

In the third quarter alone, Foley & Lardner jumped to number seven when it worked on $1.8 billion, up from the second quarter when its ranked 37th.

“We have really been quite fortunate because it is a tough time for everyone, but traditional areas for us, like housing and health care, have held up quite well,” said Christopher Knight, partner at Foley & Lardner who chairs the firm’s public finance services practice. “And we have had substantial financings in Wisconsin, Illinois, Florida and Kentucky.”

Knight added that the firm’s rankings were enhanced by big state-level financings in Wisconsin, Massachusetts and Puerto Rico.

He said that while it could be “luck of the draw” that the states in which Foley has relationships decided to come to market this year, the rankings are also a result of strategic targets the firm has in place.

“We have strategic targets for health care and housing and we recently and quite intentionally have become more active in Massachusetts and Puerto Rico,” Knight said.

Ice Miller jumped to 17th by working on $2.7 billion of deals for the first three quarters of the year, up from when it ranked 41st and worked on $1.6 billion of deals for the first three quarters of 2010. The firm increased its market share to 1.4% from 0.6%.In the third quarter alone, the firm worked on $1.5 billion of deals, putting it in 10th place, up from the second quarter of the year when it ranked 20th by working on $974 million.

Philip Genetos, partner at Ice Miller, said the jump in rankings was a combination of three factors. “Several of our existing clients did substantial transactions, including business energy and hospitals, that all came to market with nice sizeable deals,” he said.

Ice Miller also has a large footprint in Illinois and Ohio. “We have a strong presence in Illinois, which added to volume numbers, and after merging with Schottenstein Zox and Dunn Co., we are hoping to expand our muni finance team with the relationships that firm already has,” Genetos said.

Another factor that contributed to Ice Miller’s upward move in the rankings is helping clients take advantage of products that are more flexible. “There was a new-issue bond program for housing that happened in the first three quarters of the year and that helped expand our practice by introducing those to our clients,” Genetos said. There was also a Midwestern disaster program that Ice Miller worked on that helped redevelop flooded areas.

Among underwriter’s counsel, the law firms that made the top 20 were more of a mixed bag. Hawkins Delafield ranked first by seizing 7.2% of market share and working on $9.4 billion. Fulbright & Jaworski LLP jumped to second from fifth place for the first three quarters of this year compared to 2010. Fulbright also increased its market share to 5.5% from 2.8%.

Other firms that made noticeable jumps include Winston & Strawn LLP, which jumped to fourth from 10th and upped its market share to 4.7% from 2.2%. It was the underwriter counsel on $6.1 billion, compared to $4.9 billion last year.

Peck Shaffer leaped to fifth place from 19th, participating in $5.5 billion from $2.9 billion for the first three quarters of the year. It increased market share to 4.2% from 1.3%.

Moving up to 16th from 33rd was O’Melveny & Myers by working on $1.7 billion versus $1.6 billion last year. The biggest jump was made by Krieg DeVault LLP, which moved to 21st by participating in $1.3 billion and seizing 1% of market share, up from the first three quarters of 2010 when it was ranked 290 by working on only $20 million.

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