A multiyear dealmaking boom, fueled most recently by the return of ‘animal spirits’ and easing of recession fears, has raised demand for deals lawyers.
This is good news for law schools that offer LL.M. programs in Mergers & Acquisitions or related subjects such as corporate law, which train lawyers who are as comfortable in the boardroom as they are in the courtroom.
Strong US dealmaking helped to drive up global mergers and acquisitions transactions to their fourth-highest level on record in 2019, while European and Asian transactions declined sharply.
But cheap debt, subdued economic growth and executives’ fears of being disrupted by tech companies was enough to keep asset sales and purchases moving, and M&A lawyers remain a prized asset.
“There is a comeback of M&A transactions caused in part by cheap borrowing costs. Both the volume and the number of transactions have increased steadily. The demand for good deals lawyers is steadily increasing as well,” says Christoph Schalast, a professor for M&A at Frankfurt School of Finance and Management who established a law firm focused on dealmaking.
Sean Griffith, chair in business law at Fordham Law School in New York, reports a similar trend. “With a lot of M&A activity, there is a lot of demand for lawyers,” he says.
“Every part of the deal needs to be supported by a good legal team. You need good lawyers in-house at the acquirer and at the target, as well as at the insurer and all the law firms working on the transaction.”
LL.M. options for M&A-minded students
Although Fordham doesn’t offer an LL.M. in M&A per se, its LL.M. in Banking, Corporate and Finance Law addresses a number of topics relevant to deals lawyers.
Indeed, very few law schools offer specialized LL.M.s in Mergers & Acquisitions. Instead, those looking to break into this field might also explore LL.M.s in broader topics, such as the LL.M. in Business Law and Economics at Chapman University’s Fowler School of Law, or those in related fields such as business or corporate law.
Many are interdisciplinary courses. For example, Frankfurt’s LL.M. in M&A blends law and economics, teaching students the theoretical and practical knowledge they need to successfully lead or advise on an M&A deal.
“During the two years our students will negotiate a Share Purchase Agreement, draft an investment proposal during an overnight session and do an intense course in negotiating,” says Schalast.
Global deals are heating up, creating demand for M&A lawyers
His course also requires students to carry out complex analyses of the legal, economic and tax problems of transactions and find solutions. This is especially important for large public companies that face scrutiny, with shareholder activism on the rise.
Companies’ primary goal is to make sure the deal will work, and this is where M&A lawyers can add value to their clients. “With their logical thinking and problem-solving skills, good M&A lawyers know how to close a deal – even, or rather if, the deal is hanging in the balance,” says Schalast.
But Hans-Jörg Fischer, professor of business law at University of Applied Sciences for Economics and Management, warns that deals lawyers should not overstep their mark: “The investment decision is triggered by the buyer itself, or its consultants. The M&A lawyer’s task is the implementation of the acquisition,” he says.
Business acumen aside, Fischer reports an increase in demand for great deals lawyers, especially in Germany where his law school, known as FOM, is based.
“Since the 1990s, inbound investment to Germany has increased on a continuous basis,” he says. “In particular, tax know-how is needed in order to optimize the respective acquisition process and the return on investment…The buyer’s profit can be optimized by a tailor-made tax acquisition structure.”
In addition to tax expertise, Fischer says the hallmarks of a great deals lawyer are experience in contract law, strong negotiation skills and intercultural competencies. English language proficiency is a given, and some IT skills are also needed for handling data, he says.
Not just a lawyer, but a manager
Employer demand is especially high for those who have expertise in foreign investment reviews, especially in the US, as regulators and politicians increase their scrutiny of cross-border deals on national security grounds.
The threat of policymakers derailing blockbuster deals has made such knowledge highly prized. This, in part, is why it is so important to have professors with real experience of M&A transactions, in addition to having students read about them in case studies.
Like many professors teaching on FOM’s LL.M. course in M&A, Fischer is a former deals lawyer himself, having worked as an M&A advisor at Clifford Chance. “A significant portion of our lecturers are experienced lawyers whom the students can learn from,” he says.
This is also important because, while traditionally, M&A lawyers have provided technical expertise to clients, they are increasingly expected to get stuck into making decisions about business strategy.
“That has always been the case for the top echelon of deal lawyers, who offer guidance regarding the broader business issues as well as the legal issues,” says Griffith at Fordham, which has a class titled “The Art of the Deal”.
“The top deals lawyers know the economic needs of the companies working on the deal and each company's unique culture,” he adds.
Schalast at Frankfurt school agrees. “A great deals lawyer is not just a lawyer, but a manager too,” he adds. “They know every single aspect of the deal and can connect the dots. A passion for the both the client as well as the deal is essential.”
