Good morning,

Private equity investors are taking aim at the fee structures that have fueled Big Law’s biggest revenue runs. The ILPA, which advocates for pension and sovereign wealth funds, is pushing to end a longstanding protocol where fund investors pay law firm costs on both sides of negotiations – an arrangement it calls unsustainable. Separately, the ABA weakened its DEI accreditation standard for law schools, and a lawyer at Binnall Law Group apologized to a federal judge after using Anthropic’s Claude to draft a motion that included fabricated quotes.

On the client side, NextEra Energy agreed to buy Dominion Energy for roughly $67 billion, SpaceX is targeting a June 12 Nasdaq debut at a $2 trillion-plus valuation, and federal prosecutors in the SDNY are investigating valuation practices at a BlackRock private credit fund. A global bond selloff sent the US 10-year to 4.59% as Iran tensions and inflation fears weigh on markets ahead of the G7 in Paris.

Now, on to what matters for your practice today.

Today’s Talking Points

-PE Investors Challenge Law Firm Fee Structures / ILPA Pushes to End Dual-Cost Protocol

-ABA Weakens DEI Standard / Lawyers Apologize for AI-Fabricated Court Filings

-NextEra-Dominion $67B Utility Mega-Deal / SpaceX Targets June 12 IPO at $2T+ Valuation

-SDNY Probes BlackRock Private Credit Fund / BDC Redemptions Exceed Fundraising for First Time

-Bain Capital Closes $10.5B Asia Fund / KKR Eyes $7B Kuwait Energy Deal

-Global Bond Selloff Deepens / G7 Meets in Paris / Iran Strikes Possible This Week

-AI Public Backlash Grows / Record Data Center Project Cancellations in Q1

Talent Strategy

Latest Moves

-Alvarez & Marsal hired two partners from Bain & Co. to launch a US commercial due diligence practice targeting private equity firms. The move puts A&M in more direct competition with Big Law on the deal advisory side of PE transactions.

What today's moves tell us: A quiet day for lateral hiring, but the advisory market is shifting as consultancies build legal-adjacent practices aimed at private equity clients.

Operational Strategy

PE fund investors are challenging the fee structures that have powered Big Law’s growth, and the pressure could reshape how firms price fund formation work.

The ILPA is pushing to end the industry norm where limited partners pay the legal costs of both sides in fund negotiations. Jennifer Choi, ILPA’s CEO, called the arrangement unique across industries and said it has led to “runaway legal costs” because managers have no incentive to keep fees down. The growth of private equity has directly fueled rising revenues and partner payouts at firms like Kirkland & Ellis, which broke $10bn in annual revenue last year.

Separately, the ABA council watered down its DEI standard for law school accreditation, replacing specific demographic categories with references to anti-discrimination laws. The change comes as the Trump administration and Republican-led states challenge the ABA’s accreditation role. And a partner at Binnall Law Group apologized to a California federal judge after using Anthropic’s Claude to draft a motion containing fabricated quotations, adding to a growing list of AI-related missteps in court filings.

In Asia, Mayer Brown’s 2024 decision to split from its Hong Kong partner fits a wider retreat: about 20 US firms have exited, closed offices, or restructured alliances in Greater China since 2020..

Practices

M&A and Capital Markets

The week opens with one of the year’s biggest deals and the most anticipated IPO in recent memory.

NextEra Energy agreed to acquire Dominion Energy for roughly $67 billion, creating a utility giant in what stands as one of the largest transactions of the year. The deal will draw heavy regulatory review across multiple state utility commissions and federal agencies.

SpaceX is targeting a June 12 Nasdaq listing at a valuation above $2 trillion, aiming to raise as much as $80 billion in what would be the largest IPO ever. The company posted a net loss of nearly $5 billion on $18.5 billion in revenue last year, including its absorbed xAI division. IPO paperwork could go public as soon as Wednesday. In other listings, Chinese data center operator DayOne is planning a dual IPO in Singapore and the US, targeting $5 billion in proceeds. Bain Capital closed its largest Asia fund at $10.5 billion, raising $2.1 billion more than targeted.

Private Equity and Credit

Federal prosecutors are stepping into private credit, as investor outflows are hitting levels not seen before.

The US Attorney’s Office for the Southern District of New York is examining valuation practices at BlackRock TCP Capital Corp, a publicly traded credit fund. Jay Clayton, head of the office, said he would investigate potential wrongdoing in private credit while acknowledging the industry has been broadly positive for the US economy.

Non-traded private credit BDCs handed back about $7 billion in Q1 while raising only $5 billion – the first quarter where outflows exceeded inflows, according to Robert A. Stanger & Co. Total redemption requests topped $15 billion, with many funds enforcing 5% withdrawal caps. HSBC is also struggling to make progress on its $4 billion private credit push, per Bloomberg.

On the deployment side, General Atlantic and KKR continue to see Middle East deal and fundraising opportunities despite the Iran conflict. KKR is eyeing a $7 billion energy deal in Kuwait and expects the war to accelerate investment in resilience and infrastructure projects.

Regulatory and Technology

AI faces growing public resistance and regulatory attention, while the FTC opens a new front in chip-market antitrust.

The FTC is investigating Arm Holdings for antitrust violations, per Bloomberg. Separately, public backlash against AI is intensifying: over 70% of Americans say the technology is advancing too quickly in a new Economist/YouGov poll. A record number of data center projects were canceled in Q1 2026 amid community opposition, per Heatmap Pro. Morgan Stanley analysts flagged public pushback as a binding constraint on data center buildout.

Meta is expected to lay off around 8,000 employees this week. Anthropic and OpenAI now capture 89% of all AI startup revenue, per The Information. Anthropic picked investors for a $30 billion round valuing it at $900 billion.

Litigation

The Supreme Court continues to check the 5th Circuit, while major trials are in motion.

The Supreme Court paused a 5th Circuit ruling restricting telehealth and mail access to the abortion pill mifepristone, with dissents from Justices Thomas and Alito. The move extends a pattern of the conservative high court reining in the more aggressively right-leaning appeals court. Also today, Elon Musk’s lawsuit claiming OpenAI’s Sam Altman and Greg Brockman broke their nonprofit agreement is expected to go to a jury. The 9th Circuit is hearing ExxonMobil’s appeal in California’s plastics recyclability lawsuit, and the 11th Circuit hears Amazon’s First Amendment challenge to an NLRB ban on captive audience meetings.

Where the Work Sits

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The NextEra-Dominion deal will generate high-end M&A, regulatory, and energy advisory work across multiple jurisdictions. State utility commission reviews, FERC approvals, and antitrust clearance will keep large teams busy for months. The SpaceX IPO and DayOne’s dual listing add to a capital markets pipeline that calls for sophisticated securities, corporate governance, and cross-border structuring work.

Private credit is becoming an enforcement story. The SDNY investigation into BlackRock TCP and record BDC outflows will drive white-collar defense, fund regulatory advisory, and potentially restructuring mandates as funds manage liquidity pressure. The ILPA’s push to change fee protocols could reshape how firms price fund formation and subscription line work, a direct revenue question for practices built on PE.

The FTC investigation into Arm Holdings opens antitrust work in the semiconductor sector, while growing AI backlash and record data center cancellations create a mix of land use, permitting, regulatory, and public affairs mandates. The SCOTUS-5th Circuit dynamic on reproductive rights continues to produce appellate litigation, and the Musk v. OpenAI trial going to jury adds to a string of high-profile tech disputes testing nonprofit governance and contract law.

Global Markets

A global bond selloff is testing G7 finance ministers in Paris, while Iran tensions push oil higher and central banks signal tighter policy.

The US 10-year Treasury yield jumped 11 basis points to 4.59%, its highest level in 15 months. Japan’s 30-year JGB yield hit 4% for the first time, and UK 30-year gilts reached a 28-year high. The selloff is driven by war-related inflation fears, with JPMorgan’s Kim Crawford noting that the longer the Strait of Hormuz remains impaired, the more inflationary pressures build. WTI crude rose 4.2% to $105.42, and the IEA warned the global oil market will remain materially undersupplied through October.

US equities posted their worst session since March: the S&P 500 fell 1.24%, the Nasdaq dropped 1.54%, and the Russell 2000 lost 2.44%. Traders now fully price one Fed rate hike by March 2027, with more than 50% probability of a hike before year-end. The ECB’s Stournaras warned the central bank may need to raise rates if oil prices stay elevated, and the BOE’s chief economist backed prompt rate hikes. On the positive side, US retail sales rose 0.5% in April and industrial production gained 0.7% – the largest increase in over a year.

The Trump-Xi Beijing summit produced a 200-plane Boeing deal and 450 GE engines, but no extension of the trade truce expiring in five months and no tariff rollback.

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.