Good afternoon,

Big Law firms are thinning their equity partner ranks; non-equity partners grew 5% last year, while equity shareholders stayed flat. A London pay war is picking up speed after Katten raised NQ salaries, joining a cycle Milbank started. On the footprint strategy, HSF Kramer is setting its sights on Texas as part of a plan to double US revenue to $1 billion.

On the client side, Apollo is pursuing the acquisition of a licensed Japanese life insurer, Morgan Stanley CEO Ted Pick said the bank is “wide awake” to acquisition opportunities, Ares raised $8.5B for a complex asset-backed credit fund, and Blackstone is expanding into significant risk transfer deals with banks across Europe and Asia. US inflation hit 4.2% in May (a three-year high) as oil pushed above $92 after US and Iranian forces exchanged strikes near the Strait of Hormuz.

Now, on to what matters for your practice today.

Today’s Talking Points

-Seyfarth Opens Miami for LatAm Work / Cahill Reclaims Debt Finance Partner from Paul Weiss / Laterals at Skadden, Covington, K&S, Akerman, Jones Day

-Equity Ranks Shrink to Protect $40M Payouts / Katten Raises London Pay / HSF Kramer Targets Texas / US Firms Hit Record 9,400 Lawyers in London

-Apollo Hunts Japanese Life Insurer / Morgan Stanley Open to Acquisitions / Ares Raises $8.5B / Blackstone Expands SRT Deals

-European Broadband Debt Hits Distressed Levels / Shutterfly Sweetens $1.15B Junk Bond at 12% Yield

-Taiwan Weighs AI Chip Export Curbs / Visa-Mastercard $38B Settlement Approved / Lawyers Sanctioned Over AI Filings

-US Inflation at Three-Year High / US-Iran Exchange Strikes / BOJ Rate Hike Expected Next Week

Talent Strategy

Latest Moves

What today's moves tell us: Firms are adding regulatory, government investigations, and leveraged finance talent from the government and rival firms, with several hires signaling demand for financial institutions advisory, antitrust defense, and debt-side deal work. Seyfarth’s Miami launch reflects cross-border positioning for Latin American client growth.

Operations and Strategy

Firms are managing the tension between talent retention and equity dilution, with comp pressure building on both sides of the Atlantic.

Big Law firms are shrinking their equity partner ranks to push more profit to top earners, per Bloomberg Law. Equity shareholders stayed flat last year while non-equity partners grew 5%. The trend reflects a narrowing road to equity status as firms use the non-equity tier to retain talent without diluting the profit pool. Lisa Smith at Fairfax Associates noted that a fixed compensation portion “helps push more money at the top.”

Katten Muchin Rosenman handed out GBP 10,000 pay rises to newly qualified solicitors in London, joining a pay war triggered by Milbank’s market-setting raises earlier this month. In the US, Susman Godfrey surpassed Milbank’s new associate compensation levels and Ahmad Zavitsanos matched the scale for its first four classes.

Herbert Smith Freehills Kramer is targeting Texas as part of a plan to increase US revenue and reach $1 billion over five years. And across the pond, US firms in London hit a record 9,400 lawyers at the 50 largest foreign-headquartered firms, per Legal Business, as investment in the City continues to climb.

Practices

M&A, Capital Markets, and Private Equity

Sponsors and dealmakers are positioning for cross-border expansion and alternative deal structures. Apollo’s pursuit of a Japanese life insurer signals that large asset managers are looking to buy regulated platforms in aging markets where insurance assets can fund private credit. Following JPMorgan’s comments on M&A, Morgan Stanley’s CEO signaled acquisition appetite, and Robinhood winning IPO underwriting approval, point to a broader opening of capital markets activity. For corporate clients and fund managers, the SpaceX IPO — now 4x oversubscribed and expected to price Friday — is a test of how mega-cap private companies can access public markets at scale. Executives and general counsel are watching whether these signals translate into smaller business scales that can make for a busier second half for M&A and capital markets mandates.

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Restructuring and Credit

Banks are offloading European broadband debt to distressed funds, creating restructuring and workout mandates across the continent. FitzWalter Capital bought roughly half the bank debt of Germany’s DNS:Net, while 3i Infrastructure wrote down its stake to zero. About 65% of European fiber companies need to refinance in the next two years, per AlixPartners — a pipeline that will generate sustained work for restructuring, leveraged finance, and regulatory lawyers. At the same time, Apollo-backed Shutterfly had to sweeten terms on a $1.15B junk bond refinancing at a steep 12% yield after investors flagged AI disruption risk to its photo printing business, a sign that covenant negotiations and investor protection work are becoming more complex in sponsor-backed deals.

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Regulatory, Trade, and Technology

Executives and general counsel are tracking a widening set of export controls and data-sovereignty restrictions. Taiwan is weighing stricter export controls on AI chips to China, aligning with US rules and extending restrictions beyond blacklisted firms to virtually all Chinese customers. The Netherlands blocked Kyndryl’s $115M acquisition of Dutch IT firm Solvinity on national security grounds. On the litigation side, a federal judge granted preliminary approval to a revised Visa-Mastercard $38B settlement with merchants over processing fees — one of the largest class action settlements on record.

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Where the Work Sits

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Cross-border M&A and insurance regulatory work are picking up as Apollo’s Japanese life insurer pursuit and Morgan Stanley’s acquisition appetite signal that financial institutions are looking to deploy capital into regulated platforms. These deals pull in M&A, regulatory, insurance, and tax practices, with the Japan FSA’s stance on offshore reinsurance adding a layer of complexity that benefits firms with deep cross-border capabilities.

European restructuring and leveraged finance practices face a growing pipeline. The broadband debt distress across the continent, combined with the Shutterfly refinancing difficulties, shows that covenant-heavy workouts and investor protection negotiations are generating billable hours for restructuring, debt finance, and capital markets teams. The two-year refinancing wall facing 65% of European fiber companies makes this a multi-quarter demand story.

Export controls and technology regulation are creating a new wave of compliance and trade advisory mandates. Taiwan’s AI chip export curbs, the Dutch national security block on the Kyndryl-Solvinity deal, and the broader US-aligned tech restrictions mean that companies with cross-border supply chains need ongoing regulatory counsel. The Visa-Mastercard settlement and AI-related sanctions on lawyers also keep litigation and ethics practices busy.

Global Markets

Clients are recalibrating risk models after US inflation hit 4.2% in May — a three-year high driven by energy costs linked to the Middle East conflict. Oil pushed above $92 per barrel after US forces struck Iranian air defenses near the Strait of Hormuz and Iran responded with attacks on US bases in Bahrain, Kuwait, and Jordan. Executives and board directors are weighing how sustained inflation above 4% and elevated energy costs affect capital allocation, with the BOJ expected to hike rates next week and Indonesia delivering a surprise rate increase. For dealmakers, the question is whether financing windows narrow further or whether the market adapts to a higher-for-longer rate environment.

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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.