#35 The Legal Profession This Week - Government Roster Reshuffled; Eight Law Firms Dominate The European Private Equity Scene​


By BK​


Magic Circle Firms Drop Out From Government Roster

Clifford Chance, Linklaters and Freshfields Bruckhaus Deringer are no longer part of one of the UK Government’s key legal panels. According to The Lawyer, these firms have been “staples of the finance and complex panel of years”, providing corporate finance advice to UK government departments.

There are several reasons why this trend has emerged.

Firstly, the Crown Commercial Service has been leaning towards more affordable firms. According to The Lawyer, some smaller, mid-tier firms have surpassed Magic Circle firms not only in affordability but also in their ambition by “punching above their weight” to secure government deals. For example, TLT recently won a government mandate to handle post-Brexit transatlantic commercial agreements, reportedly valued at £7m.

Secondly, Magic Circle firms may have moved away from government-backed deals over profitability concerns. Government legal contracts involve “time-consuming mini competitions” between panel members and, due to the high stakes nature of the mandates, government contracts tend to involve significantly more partner time per project.

Eight Law Firms Dominate the Top European Private Equity Deals in 2021

Data from Refinitiv found that 95% of the 20 largest private equity acquisitions, totalling a whopping deal value of nearly $200 billion, involved at least one of eight firms: Kirkland & Ellis; Simpson Thacher & Bartlett, Freshfields Bruckhaus Deringer; Latham & Watkins; Weil Gotshal & Manges; White & Case; Clifford Chance and Linklaters (Law.com).

These firms are revealed to almost exclusively hold the key corporate connections with the largest private equity firms in Europe. This trend highlights the growing importance of private equity deals as a lucrative source of revenue for many City firms.

Maintaining long standing corporate relationships with private equity houses is a lucrative source of business as many private equity firms have substantial “dry powder” to deploy. With around $2 trillion of unspent capital available to invest, the private equity industry has made massive strides into the global M&A market. This trend has benefitted private equity-focussed firms such as Kirkland & Ellis, which has advised five of the top European deals with a combined value of $22.8 billion in 2021 alone (Law.com).

‘Business as usual’ – the notable deals and cases which went ahead this week:

Two US law firms have taken the lead on Mimecast’s $5.8bn sale to private equity house Permira (Law.com). Fried Frank Harris Shriver & Jacobson (“Fried Frank”) is advising the buyer, Permira, which will be acquiring the shares of cloud and email cybersecurity company Mimecast at a value of $5.8bn. Meanwhile, Godwin Proctor is advising Mimecast, which will become a private company upon completion of the sale.

This deal reflects the growing deal appetite of private equity firms in the transatlantic market, as well as the increasing importance of cybersecurity providers in today's world.