The $23 billion sale of ketchup maker H.J.Heinz Co to Berkshire Hathaway Inc and buyout firm 3G Capital, Avis Budget Group’s takeover of Zipcar, and the $6.9 billion leveraged buyout of BMC Software , have one common link: Kirkland & Ellis LLP.
The law firm, which served as a legal adviser on those deals as well as several other of the largest transactions of the year, with a combined deal value of $56.6 billion, has jumped to ninth place in the ranking of merger advisers, up from 18th in 2012, according to Thomson Reuters data released on Monday.
Just four years ago in 2009, Kirkland ranked 72nd in the legal league table.
When ranked by the number of deals with a value of $100 million or more, Kirkland was the second-biggest merger adviser, having worked on 70 deals so far this year, Thomson Reuters data showed.
“What has changed recently at Kirkland is that while we continue to grow the number of deals, we’ve significantly grown the number of high profile, high-value deals,” said Daniel Wolf, an M&A partner who joined the firm from Skadden, Arps, Slate, Meagher & Flom in 2009.
Unlike investment banks that earn a percentage of a deal’s value, lawyers bill by the hour, meaning that the number of deals are as important for a firm’s earnings as is the dollar value of deals.
Kirkland, a 1,600-attorney firm headquartered in Chicago, has built a prominent mergers and acquisitions practice in recent years, backed by big hires and deals that have raised its profile among Wall Street’s top M&A law firms.
Compared to larger and long-established peers such as Skadden, Arps, Slate, Meagher & Flom; Wachtell, Lipton, Rosen & Katz; and Cravath, Swaine & Moore LLP, Kirkland was a lesser-known presence in M&A, having made its name in practices such as litigation, restructuring and private equity.
Other high-profile transactions that Kirkland was involved in this year include the proposed merger of Office Depot with OfficeMax, and Sprint Nextel Corp’s bid for Clearwire Corp.
“All this happened at a time when the overall M&A market has been down,” Wolf said.
The recent rise of Kirkland’s M&A practice has been partly attributed to hires such as Wolf, as well as David Fox, who also joined the firm from Skadden in 2009.
Both lawyers advised private equity firm Blackstone Group on its bid for Dell Inc, which it later withdrew. Among more recent hires is Sarkis Jebejian, who joined from Cravath at the end of 2012.
Stephen Fraidin, who came to Kirkland from Fried, Frank, Harris, Shriver & Jacobson in 2003 with the aim of building Kirkland’s M&A practice, said that leveraging Kirkland’s brand name and client basis in historically strong practice areas such as private equity was key toward that goal.
Fraidin, together with William Sorabella who followed him into Kirkland from Fried, Frank the same year, advised Brazilian investment firm 3G Capital in the Heinz deal this year. Both attorneys also worked with 3G when it bought Burger King for $3.3 billion in 2010.
The senior partners, who are running a relatively small M&A team in Wall Street with about 15 U.S. partners focused primarily on corporate M&A, say that they encourage younger associates and junior partners to grow their own client relationships. That allows Kirkland to handle a large number of deals and compete with other firms that are several times as big.
“People are sometimes shocked by the relatively small size of the team doing all of these deals,” Fox said.
While Kirkland continues to look for key hires at the senior level, the firm will do so only selectively, the partners said. Kirkland is also keen to keep up the momentum of the recent years.
“Once you’re near the top there’s only one way, it’s down,” Wolf said. “Creating something sustainable is what we are focused on right now.”