Good afternoon,
The Justice Department subpoenaed 13 large US law firms and is pressing their leaders to respond, escalating the fight over the White House's moves against Big Law. K&L Gates cut about 180 staff, roughly 10% of its professional staff, and a fresh run of laterals landed at Katten, BakerHostetler, Simpson Thacher, and Ashurst Perkins Coie.
On the client side, US and European buyers kept circling overseas assets. ABB agreed to buy the UK's Rotork for about £4.14 billion, Apollo, Kirkland, Latham, and Paul Weiss are riding a wave of US private equity into German targets, and Eli Lilly locked up psychedelics biotech AtaiBeckley for $3.8 billion. Morgan Stanley signaled it is seeking acquisition targets in wealth management.
Now, on to what matters for your practice today.
Today’s Talking Points
-DOJ subpoenas 13 Big Law firms as the ABA's fight with the White House widens
-K&L Gates cuts ~180 staff (~10%) as layoffs spread across large firms
-Laterals land at Katten, BakerHostetler, Simpson Thacher, and Ashurst Perkins Coie
-ABB buys UK's Rotork for ~£4.14B as foreign buyers keep taking London-listed targets
-US PE targets German assets, with Kirkland, Latham, and Paul Weiss advising
-Eli Lilly agrees to buy AtaiBeckley for $3.8B; KKR sweetens DCC bid above $7.7B
-Chevron backs two Iraqi oil fields and a Hormuz-bypass pipeline as Iran strikes continue
-Chip stocks sell off on AI-spending fears as US import inflation hits 7.1%
Talent Strategy
Latest Moves
Charles Wakiwaka joined Katten Muchin Rosenman as a partner in its structured products and derivatives practice in London.
Christopher Raidy joined BakerHostetler as a partner in its business practice group and debt finance team in Los Angeles.
Emma Rachmaninov joined Simpson Thacher as a partner in its European funds practice in London.
Ryan Gaglio joined Ashurst Perkins Coie as a partner in its tax practice in Los Angeles.
What today's moves tell us: firms are committed to adding in structured products, funds, debt finance, and tax, with London and Los Angeles the busiest markets.
Operations and Strategy
Government pressure and cost discipline are hitting large firms at the same time as Big Law leaders seek to surpass last year’s results.
The Justice Department subpoenaed 13 large US law firms and is demanding their leaders respond, part of the widening fight over the administration's actions against Big Law. The subpoenas follow the ABA's lawsuit against the White House and its subpoena to Boris Epshteyn, President Trump's personal lawyer, over the deals the administration struck with nine firms last year and executive orders against four others. Separately, the SEC was sued for refusing to hand over its communications with Gibson Dunn, WilmerHale, and Davis Polk.
K&L Gates laid off about 180 allied professional staff, roughly 10% of its professional staff, calling it a restructuring to align support with future growth. The cuts come about a year into the tenure of global managing partner Stacy Ackermann and management committee co-chair Rick Giovannelli, and follow associate cuts at McDermott Will & Emery and hundreds of business-role eliminations at Baker McKenzie earlier this year.
Practices
Private Equity and M&A
Dealmakers are pointing capital at Europe, where US sponsors and strategics see softer local conditions and cheaper listed targets. Executives and fund managers are moving on control stakes, take-privates, and carve-outs, giving corporate, finance, and regulatory teams parallel mandates on diligence, structuring, and foreign-investment approvals. This is a buyer-led market, and the firms that did the analytical work through the slowdown are the ones moving fast.
Selected Press:
ABB agreed to buy UK-listed engineering firm Rotork in an all-cash deal worth about £4.14 billion, its largest-ever acquisition, days after Arlington's £350 million take-private of Gooch & Housego.
Kirkland & Ellis, Latham & Watkins, and Paul Weiss are advising on a wave of US private equity into German and DACH assets, with Apollo's €3 billion purchase of a Bayer division a recent example.
Eli Lilly agreed to acquire $2 billion-listed psychedelics biotech AtaiBeckley for $3.8 billion in cash at a 25% premium.
KKR and Energy Capital Partners sweetened their bid for European energy distribution firm DCC to over $7.7 billion.
Carnelian Energy Capital and EnCap Investments are in late-stage talks to buy shale producer VTX Energy Partners from Vitol at a $2.3 billion valuation.
Morgan Stanley CEO Ted Pick signaled the bank is hunting acquisitions to expand its $8 trillion wealth arm and retirement business, with smaller regional-bank and wealth-manager deals now driving financial-services M&A.
Energy and Infrastructure
Middle East supply risk is redrawing energy investment, and dealmakers are financing routes around the Strait of Hormuz. Sponsors, oil majors, and their counsel are weighing cross-border joint-venture, project-finance, and sanctions questions as Gulf states build alternatives to the strait.
Selected Press:
Chevron will sign preliminary deals to invest in two Iraqi oil fields and join a consortium studying a pipeline linking Iraq's oil patch to the Syrian coast, a route around Hormuz.
BP and ConocoPhillips are also backing Iraqi oil development as Gulf governments pour billions into pipelines, rail, and storage to bypass the strait.
Elon Musk acquired Florida-based gas turbine maker APR Energy for $1 billion.
Technology and Regulatory
A Chinese frontier model and a chip selloff are sharpening the policy fight over AI and export controls that boards and general counsel must navigate. Fund allocators and hyperscalers building AI infrastructure face fresh capital-light competition and trade-security questions that feed private capital, debt markets, regulatory, IP, and CFIUS-adjacent work.
Selected Press:
China's Moonshot AI launched Kimi K3, which it says rivals leading US models, in what Bloomberg called another "DeepSeek moment."
Semiconductor stocks sold off, dragging Nasdaq-100 futures down 1.9% on concerns about AI spending.
Databricks is raising a $3 billion Series M at a $188 billion valuation led by Coatue.
Where the Work Sits
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The clearest demand signal is cross-border M&A pointed at Europe. ABB's purchase of Rotork, the US private equity push into German assets, and Eli Lilly's AtaiBeckley deal feed corporate, financing, foreign-investment, and antitrust mandates. When US buyers move on cheaper London- and Frankfurt-listed targets, the high-end matters flow to a small set of transatlantic corporate and finance teams that can price complexity and move quickly.
Government pressure on Big Law is its own book of work. The DOJ subpoenas to 13 firms and the SEC records suit point to white-collar defense, privilege and compliance reviews, and appellate litigation across the upper echelons of Big Law, on top of the professional-liability exposure firms already carry.
Energy is where geopolitics turns into mandates. Chevron's Iraqi investments and the Hormuz-bypass pipeline generate project finance, joint-venture, and sanctions work, while the APR Energy, VTX, and DCC deals keep energy-focused corporate and credit teams busy.
The AI and chip story keeps widening the regulatory and IP front. A Chinese frontier model and a semiconductor selloff sharpen export-control and national-security questions, feeding CFIUS-adjacent, trade, and IP mandates for the companies building and financing AI infrastructure.
Global Markets
Trade-price pressure, a tech selloff, and Middle East escalation define the latest macro backdrop.
Clients are watching import inflation climb and a chip-led selloff test the AI trade, while executives weigh a sixth night of US strikes on Iran and the strain on the Strait of Hormuz. Dealmakers are tracking Fed Chair Kevin Warsh's renewed focus on money supply for signs of how hard the Fed will lean on prices, and capital allocators in the UK are pricing in a change of government as Andy Burnham prepares to take over as prime minister.
Selected Press:
Import inflation: US import prices rose 0.3% in June, lifting annual import inflation to 7.1%, the highest since 2022, while export prices fell 0.6%.
Tech selloff: a global semiconductor selloff deepened on AI-spending concerns, pulling major indexes lower.
Iran and Hormuz: US forces launched a sixth night of strikes on Iran, which said it targeted US forces in Syria and Bahrain, keeping the Strait of Hormuz under strain.
Fed signal: Chair Kevin Warsh reintroduced money supply as a gauge to watch, hinting at a firmer line on inflation.
UK politics: Andy Burnham became Labour leader and is set to become Britain's prime minister on Monday.
Stories to Watch
Big Law's response to the DOJ subpoenas — how the 13 firms and the ABA litigation play out will shape firm-government relations.
Alphabet and Tesla earnings (next week) — key reads on AI spending and demand after the chip selloff.
Andy Burnham to become UK prime minister (Monday) — a change of government with implications for UK corporate and fiscal policy.
Iran and the Strait of Hormuz — a sixth night of strikes keeps oil and supply-chain risk elevated.
US import inflation at 7.1% — watch for pass-through to consumer prices and the Fed's posture under Warsh.
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.
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