Good afternoon,

Mayer Brown keeps raiding McGuireWoods for Texas energy talent, Latham pulled a complex commercial litigation partner from Kirkland in Texas, and appointed Cate Behles as counsel in the firm’s Cfius and US national security practice in Washington. Taft added three partners in Denver after its Sherman & Howard merger. The associate pay war continues even as AI threatens the junior lawyer model.

On the markets side, PIMCO warns the credit loss cycle has begun, Starbucks weighs Japan sale, in Italy, Intesa Sanpaolo bid $35 billion for Monte Paschi in a landmark European bank deal, and OpenAI told staff it expects to go public within the next year. The ECB is set to hike rates for the first time since 2023, while Trump issued a fresh ultimatum to Iran after another exchange of strikes.

Now, on to what matters for your practice today.

Today’s Talking Points

-Mayer Brown Raids McGuireWoods in Houston / Latham Brings in a Litigator from Kirkland in Texas and a CFIUS specialist from the Treasury / Taft Adds Three in Denver

-AI vs. Associate Pay War is On

-Pimco Warns Credit Loss Cycle Has Begun / Oracle Capex Tops $55B / Starbucks Weighs Japan Sale

-Intesa Sanpaolo’s $35B Monte Paschi Bid / OpenAI IPO Plans / Broadcom-Apollo-Blackstone $35B AI Fund

-Google Liable for AI Overviews in German Court / FISA Section 702 Expires Tomorrow / China’s $295B AI Plan

-ECB Rate Hike Today / Trump-Iran Escalation / S&P Down 4.5% Since June 2 / Real Earnings Drop 0.7%

Talent Strategy

Latest Moves

What today's moves tell us: Firms are building energy, litigation, and transactional teams in Texas and the Mountain West, with several hires reflecting demand for complex commercial disputes and cross-border deal capability.

Operations and Strategy

Firms are raising associate salaries while investing in AI tools that threaten the very roles those salaries support, a tension that will define Big Law's operating model over the next several years.

The pay war triggered by Milbank's $240K-$450K associate scale is still spreading, but Bloomberg Law reports that firms are simultaneously pouring money into AI that could handle work typically done by associates. No firm has signaled plans to shrink associate classes yet, but the economics are under pressure from both directions. Apollo co-president Scott Kleinman said professional services, including law firms, are likely the next sector to face AI disruption.

Practices

Corporate M&A and Capital Markets

Dealmakers are watching a cluster of large-cap transactions (in the US and abroad) that signal renewed corporate and sponsor appetite for strategic bets. Intesa Sanpaolo's $35B bid for Monte Paschi show that boardrooms in banking are confident enough to pursue large-scale deals even in a volatile rate environment. OpenAI's IPO timeline and Broadcom's $35B AI infrastructure fund with Apollo and Blackstone add a pipeline of tech-linked capital markets work. For corporate clients and sponsors, these signals point to a back half with more M&A, equity, and structured finance mandates.

Selected Press:

Credit and Restructuring

PIMCO's warning that the credit loss cycle has begun, combined with Oracle's $55B annual capex bill and plan to borrow another $20B in 2027, suggests that parts of the AI infrastructure buildout are approaching stress points. Investors are growing more selective about data center debt. For funds, restructuring and leveraged finance practices, the gap between AI infrastructure spending and cash generation is creating the kind of credit complexity where elite counsel earn their fees.

Selected Press:

Regulatory and Technology

General counsel and compliance teams face a widening set of technology-related regulatory questions. A German court ruled that Google is directly responsible for the accuracy of its AI Overview search answers, calling them 'independent statements' rather than aggregated links, a ruling that could set precedent for AI liability across jurisdictions. FISA Section 702 expires tomorrow, and China's $295B AI infrastructure plan is adding another layer to the tech supply chain regulatory landscape.

Selected Press:

Where the Work Sits

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European bank consolidation are pulling in M&A, capital markets, regulatory, and tax practices. GSK's $10.6B Nuvalent deal, Intesa Sanpaolo's Monte Paschi bid, and Starbucks' Japan review all involve multi-jurisdictional structuring, regulatory approvals, and complex governance work. The volume of four-firm adviser lineups on a single deal shows the depth of work these transactions generate.

AI infrastructure financing is creating sustained work for leveraged finance, capital markets, and restructuring teams. Broadcom's $35B fund, Oracle's borrowing plans, and the widening gap between AI capex and cash generation are producing complex credit structures that need careful documentation and covenant negotiation. Pimco's credit loss cycle warning adds urgency for firms with distressed and workout capabilities.

Technology regulation is building a pipeline of IP, data privacy, regulatory, and trade advisory mandates. The German AI Overviews ruling, FISA expiration, China's $295B AI plan, and CFTC prediction market rules each represent distinct compliance and litigation streams. Companies with AI products or cross-border tech supply chains will need ongoing counsel as these frameworks take shape.

Global Markets

Clients are recalibrating after the S&P 500 dropped 4.5%, with bond traders now positioning for multiple Fed rate hikes. The ECB is set to raise rates today for the first time since 2023, and real average hourly earnings fell 0.7% year-over-year, the sharpest decline in more than three years. Executives are weighing whether the combination of sticky inflation, geopolitical risk, and tightening financial conditions will compress deal timelines or freeze them. Following a tirade of threats, dealmakers are watching how quickly the Middle East conflict resolves, since energy-driven inflation is the key variable separating a higher-for-longer rate path from a return to the easing cycle markets priced in earlier this year.

Selected Press:

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.