Law firms with large transactional practices took full advantage of a booming mergers and acquisitions market in 2025, riding near-record deal value and volume to big increases in profitability.
The question for law firm leaders: Will the good times for M&A continue through 2026?
While a few legal industry analysts are preaching restraint, many firms and financial institutions see the transactional market continuing to surge—although perhaps not as sharply as the previous year.
“The expectations for 2026 are that inflation and interest rates will continue to moderate,” Norton Rose Fulbright said in a recent M&A market analysis. “Strategic and private equity players continue to be optimistic about global growth, and the deregulatory policy stance in the major economies will continue—all of this points to another good year for M&A in 2026, but possibly not as good as 2025 actually turned out to be.”
A Rising Tide
Citing data from the London Stock Exchange Group (LSEG), Reuters noted last month that global deal value reached near-record levels in 2025 and the number of transactions worth $10 billion or more was at an all-time high. Two key dealmakers at Wachtell, Lipton, Rosen & Katz told Reuters that they were “neck deep in ongoing deals,” adding that “the pipeline is bulging as well.”
A few large law firms are reaping the biggest rewards. Kirkland & Ellis topped LSEG’s list of global M&A legal advisers based on the value of the deals they handled. The firm advised on $829 billion in deals, “slightly more than double its combined deal value in 2024,” Reuters said. Kirkland alone grabbed nearly $1 out of every $5 of M&A value last year, according to Law.com.
Latham & Watkins saw M&A deal value increase 85% to $720 billion, according to Law.com’s review of LSEG data. Two other firms—Wachtell and Skadden, Arps, Slate, Meagher & Flom—also served as chief legal adviser on deals whose combined value reached $600 billion or more. “Collectively, those four law firms were responsible for approximately 61% of the $4.6 trillion in M&A activity in 2025,” Law.com reported.
Among the rest of LSEG’s top 20, combined deal value averaged $232 billion, Reuters said. A private equity partner at Kirkland told Reuters that the legal market for M&A work has “sort of bifurcated, and there is a flight to the top.”
Driving Factors
Even so, other firms are doing plenty of deal work. Goodwin Procter handled 945 transactions in 2025, according to LSEG data, the most of any firm. The co-lead of the firm’s M&A practice, in an interview with Reuters, said declining interest rates were a key factor in surging deal volume and a further drop in rates “portends well for 2026 and beyond.”
JP Morgan, in its annual report on M&A, also sees a strong year ahead. “The conditions fueling dealmaking in the second half of 2025 are expected to carry into 2026, with M&A activity remaining strong—driven by solid fundamentals, a clear shift toward scale and strategic focus, sector momentum and sponsors exiting aging assets,” JP Morgan said.
Political and economic uncertainty in the United States and abroad made for “one of the most turbulent, yet active years, of the past decade” for mergers and acquisitions, JP Morgan said. Transactional volume increased in eight of nine economic sectors tracked by the bank, with areas like technology, media and communications, diversified industries, and financial institutions notching a 40% jump in deals.
The bank added that dealmakers have entered an era of mega transactions thanks to several factors. Larger companies are in vogue because they are “enjoying higher valuation premiums, stronger ratings, and lower financing costs” and innovative dealmaking—like “minority stake sales” and “large-scale take privates”—is allowing deal teams to “bridge valuation gaps and return capital to shareholders,” JP Morgan said. Activist shareholders, especially in the Asia-Pacific region, are pushing for more deals, and a “navigable regulatory environment” is driving “deglobalization and cross-border activity.”
Warning Signs
M&A activity has been particularly strong in the United States, with companies “commanding record premiums,” JP Morgan said. Technology and diversified industries led the way “posting double-digit growth” and “explosive capital flows into AI, data centers, and energy infrastructure are transforming the business landscape, fueling the next wave of M&A,” the bank added.
Not everyone is convinced that the boom will last, however. The Thomson Reuters Institute, in its recently released financial report on the fourth quarter of 2025, said transactional practices “began cooling from their Q3 peaks, with M&A work falling 5 percentage points from its prior pace.”
“Filling the void, bankruptcy work surged in Q4, particularly in December, as counter-cyclical practices re-emerged as the dominant engine of demand growth,” Thomson wrote. “If this signals a greater shift for the United States economy, as it often does, law firms may find something far more important than just their demand threatened — their rates could come under pressure.”
In spite of the slowdown in M&A demand, firms saw “a 14.1% profit increase over the already historically profitable 2024,” Thomson said. “The average firm’s profit margin rose to 40.7% in a year unlike any other.”
Lateral Movers
For their part, firms are choosing to accentuate the positive and continuing to boost their M&A firepower. “Mega deals are the new normal,” a Jones Day partner told Law.com in January. Those deals are increasingly global in nature and require firms to have a solid multijurisdictional presence.
As a result, the market for M&A specialists has boomed. According to Law.com, Latham, Simpson, Thacher & Bartlett, Willkie, Farr & Gallagher, O’Melveny & Myers, Seyfarth Shaw, Morrison & Foerster, and Clifford Chance all added M&A and private equity partners in January.
The hires, Law.com said, included Payom Pirahesh, a partner in the private equity practice at Sidley, who jumped to Willkie. Latham’s additions included Frank Monaco from Clifford Chance, who represents insurers and reinsurers in transactions and regulatory matters, and two partners from Hogan Lovells, Matthew Eisler, the former global head of sports and Russell Hedman, also of the sports practice and its M&A and PE practices. Clifford Chance countered by hiring Michal Netanyahu, private equity partner, from Freshfields.
O'Melveny hired Matt O’Loughlin, a corporate dealmaker from Proskauer Rose, Law.com said. Seyfarth Shaw brought aboard M&A lawyer Robert from Holland & Knight, and Morrison & Foerster hired Paul Lin, an M&A partner from Akin Gump Strauss Hauer & Feld.
Unexpected Sources
Even firms that have been largely immune from departures are feeling the pressure. In recent months, Wachtell has seen three partners depart for other law firms. As Bloomberg recently reported, the firm’s industry-leading profits per equity partner of more than $9 million has “largely protected it from poaching.”
In February 2025, John Sobolewski jumped to Latham to head its global liability management practice and to serve as vice chair of its capital markets team. He was followed in June by Zach Podolsky, a star dealmaker described by The Financial Times as “the mergers and acquisitions attorney who advised on the highest dollar value of deals nationwide between 2020 and 2024.”
And in January, Simpson Thacher & Bartlett lured corporate partner Alison Priess from Wachtell. Priess has worked on transactions for companies like Home Depot, Pfizer, and Expedia, and led the lead advisers on November’s $1.3 billion purchase of OmniMax International Inc. by Gibraltar Industries.
Simpson has been an active player in the lateral market, making 30 partner additions in the last year, according to Bloomberg. These have included dealmakers from Weil Gotshal & Manges, Kirkland, Cravath, Swaine & Moore, and Barclays Plc.
Targeting Houston
The moves have continued into February. On Feb. 3, Paul, Weiss, Rifkind, Wharton & Garrison announced that it would open a new office in Houston focused on energy M&A and infrastructure work.
The office is being led by Sean Wheeler, who will also chair the firm’s global M&A practice. Wheeler joined from Kirkland & Ellis where he advised Marathon Oil Corporation in its $22.5 billion all-stock sale to ConocoPhillips and ONEOK, Inc. in its $18.8 billion acquisition of Magellan Midstream Partners, L.P. among other deals. He is being joined by Debbie Yee, a fellow Kirkland dealmaker who has led a series of multibillion-dollar transactions for major energy companies and private equity sponsors.
Law.com noted that Paul Weiss has advised on many of the largest energy M&A deals in recent years but has been one of the few mega firms without an office in Houston. With the new outpost, it joins “steadily growing list of firms to enter the market in recent months,” Law.com said. For instance, Sullivan & Cromwell and Dechert announced in January they would open Houston offices.
Change in Leadership
Paul Weiss’ decision to expand its M&A presence also comes in the wake of corporate M&A partner Scott Barshay’s ascent to the chairmanship at the firm. Longtime chairman Brad Karp stepped down in early February after the Department of Justice released email exchanges with Jeffrey Epstein, the late financier and convicted sex offender.
Barshay, named dealmaker of the year in 2024 by The American Lawyer, has a “deal sheet that reads like a greatest hits album of corporate America’s blockbuster transactions,” LawFuel recently reported. While Karp’s departure was clearly unplanned and Barshay must help clean up the reputational fallout, his move to chairman could provide a “long-term opportunity” to cement “Paul Weiss’s transformation from a litigation-first firm into a true corporate powerhouse,” LawFuel said.
Quoting former Paul Weiss partner Rick Rule, the website noted that M&A lawyers like Barshay are increasingly driving business at the firm. “Litigation and investigations,” Rule said, “aren’t going to drive growth the way they did 15 or 20 years ago.”
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David L. Brown is a legal affairs writer and consultant, who has served as head of editorial at ALM Media, editor-in-chief of The National Law Journal and Legal Times, and executive editor of The American Lawyer. He consults on thought leadership strategy and creates in-depth content for legal industry clients and works closely with Best Law Firms as senior content consultant.
