Good afternoon,

Antitrust hiring is picking up in Washington as Sullivan & Cromwell and Ballard Spahr both added antitrust partners in DC this week. Sidley pulled a finance partner from Wachtell, Orrick added four structured finance partners across four cities, and Bracewell hired two energy partners from Winston & Strawn in Houston. On the operations side, Simpson Thacher earned $70M in fund formation fees from Carlyle over five years, and top partner pay is hitting $40M while many others face cuts.

On the markets side, Goldman Sachs has already advised on more than $1 trillion of M&A this year, the fastest any bank has reached that mark. On the private-credit front, defaults have climbed back to their 2023 peak and continuation funds face growing LP resistance. The Fed announces its rate decision today with new Chair Kevin Warsh's first press conference.

Now, on to what matters for your practice today.

Today’s Talking Points

-Antitrust Hires at S&C and Ballard Spahr / Sidley Pulls Finance Partner from Wachtell / Orrick Adds 4 Structured Finance Partners / Bracewell Grabs Winston Energy Duo

-Simpson Thacher Earns $70M from Carlyle Fundraisings / Top Partner Pay Hits $40M While Others Face Cuts / US Firms Hit Record Scale in London

-Goldman Tops $1T M&A / SpaceX Acquires Cursor for $60B / Germany Blocks UniCredit-Commerzbank / Advent Nears $26B Fund Close

-Private-Credit Defaults Hit 2023 Peak / Continuation Funds Meet LP Resistance / Blackstone Eyes H&R REIT

-Appeals Court Upholds 10% Global Tariffs / EU Approves US Trade Pact / Publishers Sue Pirate Site WeLib Over AI Training

-Fed Decision Under New Chair Warsh / UK Inflation Holds at 2.8% / US-Iran Deal Sends Oil Below $80 / Housing Starts Plunge 15%

Talent Strategy

Latest Moves

What today's moves tell us: Antitrust is drawing investment in Washington from both elite and mid-market firms, structured finance is spreading across multiple US cities and into London, and Houston energy practices continue to attract talent as deal activity stays strong.

Operations and Strategy

Private capital is proving to be a fee engine for the firms closest to it, but the economics of partner compensation are getting harder to balance as talent competition intensifies.

Simpson Thacher earned more than $70 million in fund formation fees from Carlyle Group over the past five years, according to filings released by the alternative asset manager. The figure demonstrates how concentrated and lucrative the private capital sector has become for the small group of firms that dominate sponsor-side fund work.

Top partner pay at Big Law firms can now reach $40 million or more, but midyear is bringing hard conversations for many others facing potential pay cuts. The pressure to allocate profits more efficiently has grown as firms compete to retain and recruit partners who drive the largest books of business. The widening gap between top earners and the rest of the partnership is reshaping compensation structures across the industry.

In London, US firms hit a record 9,400 lawyers at the 50 largest international-headquartered firms, according to Legal Business. City partner promotions are outpacing firmwide rounds, with Paul Weiss, Gibson Dunn, and Weil among the US firms increasing their share of City promotions the fastest. Baker McKenzie is doubling down on transactions in the City, while Travers Smith posted its smallest promotions round since 2014 with three new partners in leveraged finance and funds.

Practices

M&A and Capital Markets

Dealmakers are moving at a pace not seen in years. Goldman Sachs has advised on more than $1 trillion of M&A in 2026, reaching that level faster than any bank before, helped by transactions like Dominion Energy's $118 billion sale to NextEra Energy. Supportive financing conditions, receptive shareholders, and AI-related pressure are pushing companies toward larger strategic moves. For sponsors and corporate boards, the message is clear: the window for sizable transactions remains open, and the firms positioned to advise on complex cross-border deals are hitting the gas pedal.

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Private Equity and Credit

Currently, on the exit side, continuation vehicles are meeting growing LP scrutiny, with only about half of single-asset transactions making it to close. However, the largest asset managers continue raising funds and are confident that dealmaking conditions will become favorable to deploy capital and drive returns. On the private credit side of the house, stress is building. Defaults in the KBRA DLD Direct Lending Index have climbed back to 2.3% of issuers, matching the index's 2023 peak, and KBRA projects defaults will rise to 3.5% of issuers in 2026, or roughly $7.6 billion. Fund managers counsel are watching these signals closely, because rising defaults and slower exits mean more restructuring work, more covenant renegotiations, and more advisory mandates for firms with deep bench in credit and sponsor-side work.

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IP, Regulatory, and Enforcement

Trade counsel and IP litigators are both busy this week. In IP, Hachette, Penguin Random House, and three other publishers filed suit against pirate book website WeLib, alleging it hosts tens of millions of pirated books and provides access to tech companies for AI training, a case that sits at the intersection of copyright enforcement and AI liability. On the regulatory side, a federal appeals court upheld the administration's 10% global tariffs while litigation continues, giving the White House a win on trade policy and extending the period of uncertainty for importers and manufacturers. On the international side, the EU approved key parts of a trade agreement with the US, including zero tariffs on many industrial goods, though final member-state ratification is still pending. Meanwhile, across enforcement, the DOJ asks court to dismiss Clean Air Act case against xAI.

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Where the Work Sits

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The record M&A pace is the headline, but the fee opportunity runs deeper. Goldman's $1T milestone and Advent's $26B fundraise both point to sustained demand for high-end M&A advisory, fund formation, and sponsor-side transactional work. The firms with deep bench in cross-border deals and private capital formation are running at capacity, and the competition for lateral talent in these areas reflects the fee pools available.

Private credit stress is generating a different kind of mandate. Rising defaults, capped redemptions, and LP scrutiny of continuation vehicles create work across restructuring, fund-level disputes, covenant negotiations, and credit advisory. Firms that can combine credit expertise with restructuring capability are positioned for a sustained period of engagement as the $1.8 trillion market works through its stress cycle.

Trade and regulatory practices are busy on multiple fronts. The tariff court victory keeps importers in a prolonged period of compliance uncertainty, the EU-US trade pact creates new cross-border advisory work, and the WeLib copyright suit is testing the legal boundaries of AI training data. Antitrust is quietly building in Washington, with both S&C and Ballard Spahr adding partners in DC, a signal that firms see sustained demand for competition advisory work under the current regulatory posture.

Global Markets

Clients are watching the Fed closely today. New Chair Kevin Warsh is expected to hold rates steady, but his debut press conference will be closely parsed for signals about the future of the dot plot and forward guidance. Warsh has argued that Fed officials hold onto forecasts longer than they should and can become prisoners of their own words, a shift that could increase volatility in rate expectations if he follows through. Executives and board directors weighing large transactions are also tracking the progress of the US-Iran peace deal, which has sent oil below $80/bbl for the first time since early March and could reshape energy-sector client activity. Meanwhile, in the US housing starts fell 15.4% in May to the weakest pace since 2020, and in the UK, inflation held steady at 2.8%, below expectations.

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That’s the rundown. See you next where law meets the markets.

-The BigLaw Markets Team

*DISCLAIMER: BigLaw Markets analyzes publicly available information, filings, press releases, and news stories published by reputable media sources to deliver newsletters that highlight the drivers of demand for legal services.