Is Pfizer-Wyeth Deal a Sign that ‘Raving Optimist’ Lawyer is Correct?
Mergers and acquisitions activity plummeted by more than 50 percent in November and December, putting the squeeze on law firms at the same time that their investment banking clients were collapsing.
Before 2008, reports The Deal Magazine, big law firms had aggressively expanded, fueled in part by booming M&A activity. Firms increased new associate hires in anticipation that many would jump to the financial services sector.
Now “lawyers are in a dour mood” as “capital markets work is at a standstill,” concludes The Deal. A chart published by the Wall Street Journal illustrates the problem. In 2007, gross billable hours for M&A work were up by 12 percent. In 2008, the decline was 2.5 percent.
One lawyer from a top law firm told The Deal that he has hopes of a better second half in 2009. His outlook, he said, has some of his colleagues labeling him a “raving optimist.”
The Deal’s story, published on Friday, says robust M&A activity in the pharmaceutical industry could help firms with strong client relationships in that area. The prediction proved prescient. Today the New York Times and Wall Street Journal (sub. req.) report that Pfizer plans to acquire rival Wyeth for $68 billion in what would be the largest pharmaceutical deal in a decade.
