Mergers and acquisitions lawyers use lots of analogies to describe the work they do. They're like the conductor of a symphony, the field general leading troops into battle, the quarterback calling audibles, the point guard threading passes, running the floor. "I've just about heard them all, and everybody has their favorite. I like the point guard imagery myself," joked Mark Gerstein, a partner at Latham & Watkins' Chicago office who focuses on M&A work.
"When a major transaction is happening, you're the one leading the team. You have to keep your eye on everything. All the moving parts have to work in unison, from the tax lawyers to the securities lawyers to the ERISA, labor and environment lawyers. It's a very stressful job, but totally exhilarating."
Executives and general counsels at major corporations say a good M&A lawyer is essential to getting a tough deal done, whether it's a buyout or spin-off, a friendly merger or hostile takeover. The type of attorney they look for keeps a cool head under pressure, has working knowledge of many areas of law and possesses the vision to see a complex deal to fruition, anticipating a myriad of problems along the way.
"The best M&A lawyers are tenacious without being overbearing, realistic without being risk averse. They have to be consummate negotiators to know what their clients want and find consensus without sacrificing the client's objectives," said Jeffrey Carr, vice president and general counsel of FMC Technologies, a Chicago-based manufacturer of oil and gas exploration equipment.
"That takes a special lawyer. Deals can break down for any number of reasons. A good M&A lawyer keeps them together."
Chicago is the second biggest M&A legal market in the country, behind only New York in terms of number and value of deals, according to legal experts. As the economy emerges from recession and globalization continues to transform companies around the world, Chicago-based M&A practices attract a national client base that demands top legal talent.
The 10 M&A attorneys profiled here each bring unique leadership styles and skill sets to the negotiating table, but all have been recognized by their peers as being among the best in the city at ushering through some of the largest and most complex deals. Chicago Lawyer sat down with them to discuss some of their more memorable deals and some of the secrets to their success.
Charles W. Mulaney Jr.
Charles "Chip" Mulaney says the beauty of M&A work is that it's constantly changing.
"Each day you're confronted with new situations and new obstacles. It's impossible to get bored, and that's what I love," said Mulaney, a partner at Skadden, Arps, Slate, Meagher & Flom. "Laws change, industries evolve, business conditions are constantly in flux, and human nature is infinite in its variety. You never know what to expect when you come in to work in the morning."
Mulaney is known as a go-to guy when a company wants to pull off a particularly complex transaction. In recent years, he has represented Ameritech Corp. in its $ 60 billion merger with SBC Communications Inc., Waste Management Inc. in its $ 14 billion merger with USA Waste Services Inc., and other deals involving Sara Lee and Inland Steel.
In 2004, Mulaney represented Abbott Laboratories in its $ 1.2 billion acquisition of TheraSense Inc., a California-based maker of blood-analysis machines.
"Chip is the guy you want leading the charge. He can see the big picture of a transaction and knows where to concede and where to stay firm to get his client the best possible outcome," said Kelly Welsh, general counsel at The Northern Trust Co., who has worked with Mulaney on several deals. "He has the experience and technical knowhow, but it's his confidence and ability to think two steps ahead that set him apart."
Mulaney, 54, has worked in Skadden's corporate department for 20 years; before that he was at the firm now called Mayer, Brown, Rowe & Maw. He focuses mostly on public company deals and advises clients on takeover defense measures.
"Sometimes part of the fun is thinking of new ways to solve those seemingly impossible roadblocks, designing an innovative compromise or a way to share risk that neither side had considered before," Mulaney said. "At the end of the day, you're just dealing with people -- very bright, highly motivated people. You've got to be able to divine what they want and what's holding them back."
For each deal, the devil is in the details, Mulaney said, a recent example being the Ameritech-SBC merger, which entailed a lengthy federal and state approval process and required Ameritech to sell off its cell phone business to seal the merger.
"The process took over 18 months to complete. Meanwhile, both companies had to operate independently and continue growing," Mulaney said. "We had to anticipate the problems, make the deal flexible enough to provide operating room. We were able to figure out a way."
In contrast to the stereotype of M&A lawyers being hot-headed, Mulaney stressed the importance of keeping one's cool.
"Having your emotions under control is critical," Mulaney said. "Emotions cloud people's ability to compromise, to see that a lot of issues aren't personal but simply economic. You have to keep people focused on their common interests. To do that, you can never lose your head."
Frederick C. Lowinger
Fred Lowinger likes the excitement of M&A, even though it sometimes means a panicked call on a leisurely Sunday afternoon.
"I remember getting home one Sunday, playing the answering machine, and it was my client's CEO. A rival company was staging a hostile tender offer in the next day's Wall Street Journal. It was like a surprise attack," said Lowinger, head of Sidley Austin Brown & Wood's Chicago corporate group. He was recalling Canada-based Moore Corp.'s unsuccessful attempt in the 1990s to take over his client, Lisle-based Wallace Computer Services, sparking a two-year boardroom battle.
"In two hours I was out at their headquarters with Goldman Sachs pulling together a team," he said. "I ran into almost everything: proxy fights, antitrust litigation, poison pills, arbitrageurs. We eventually prevailed against everyone."
Lowinger said he enjoys the tactical nuances of the job, fending off hostile takeovers, handling tricky joint ventures. He likes the fact that M&A is adversarial but not too adversarial, that yesterday's enemy can be today's best friend.
"The Wallace case is the perfect example. After we finally fought off Moore, about five years later I helped them merge," he said. "This time it was friendly, thank God."
Clients say Lowinger has a sharp mind, a skill for negotiating and knows how to handle the unexpected.
In 2004, he represented financial services firm First Data Corp. in its $ 6.9 billion acquisition of Concord EFS Inc. and R.R. Donnelley & Sons Co. in its $2.8 billion acquisition of his former client, Moore Wallace Inc.
"We keep going back to Fred. He's exceedingly bright and can quickly get down to the core of an issue to find a solution," said Ted Theophilos, chief administrative officer at R.R. Donnelley. "He has a very good style, excellent leadership skills. He marshals the lawyers behind him into a finely honed team."
A graduate of University of Chicago Law School, Lowinger worked as a law clerk for Justice William J. Brennan Jr. of the U.S. Supreme Court.
"I joined Sidley first doing general corporate but slowly realized I really liked M&A. One thing led to another, and the deals kept coming," Lowinger said.
"M&A is great because it puts you in contact with so many different types of transactions. You spend a lot of time negotiating with real people instead of filing papers," he said. "You have to handle the stress of keeping many balls in the air at once and making sure none of the balls drop, and making sure people perform when the timing is right."
R. Scott Falk
Scott Falk says attention to detail is the most important trait in a good M&A attorney.
"You need to be remarkably obsessive compulsive about your transaction," said Falk, an M&A partner at Kirkland & Ellis. "These are typically transformational business deals for clients. There's a lot at stake, and letting the smallest of details slip through the cracks could cause a larger fissure down the road. You can't afford not to button everything down."
Falk, 41, is young by M&A standards, still building his reputation and gathering a client base.
Falk represented Concord EFS in 2004 in the $ 6.9 billion First Data deal and is currently representing Adolph Coors Co. in its proposed $ 4 billion merger with Canadian brewer Molson Inc. Falk is also the principle corporate lawyer for United Airlines as it emerges from bankruptcy and seeks to divest non-core businesses.
People who work with Falk say he puts 110 percent into his deals.
"Scott has an ability I've never seen in an M&A lawyer before. He makes the lawyers on the other side feel like they're part of our team," said Robert Reese, Coors' general counsel. "Scott has the rare combination of smarts, experience, raw capability and the personality of a real gentleman."
Reese said he also likes the fact that Falk is accessible and so client-oriented. He said he called Falk on his cell phone the previous weekend and caught him at a holiday party.
"I could tell it wasn't the right time, but he put the client first, and I like that," Reese said. "Normally in the M&A field you get lots of folks with big egos. One thing that can be very damaging -- if not fatal -- to a deal is arrogance. It happens a lot, but not with Scott. Scott's very down to earth."
Falk specializes in public M&A deals, which requires balancing the interests of shareholders, the SEC, and boards of directors while getting the deal done as quickly as possible.
"The intensity of the time commitment can be profound, so you have to sacrifice your personal schedule," Falk said. "Public deals often happen incredibly quickly, with major transactions sometimes happening over a weekend. That's the nature of the beast. Clients want to get it negotiated before word gets out to the market it's in play.
"Advising the board is one of the most important aspects of what we do. The M&A lawyer is the face of the outside firm with the board, and they need timely and thorough advice in a confident manner," Falk said. "The board is key. There are going to be risks and complexities, a fork in the road where you either go forward or terminate discussions. The M&A lawyer has to get them through the impasse."
Falk still does many small M&A deals in addition to his major corporate work. He says he prides himself on working all deals equally hard.
"If you do a top-notch job on every deal, word spreads. Maybe the CFO or general counsel you advised goes on to a larger company and brings you with them," Falk said. "If you do great work, you will be rewarded for it."
Robert F. Wall
Robert Wall, an M&A partner at Winston & Strawn, says he knows his clients don't hire him for his law school pedigree.
"People pay me to make money, and you can never forget that," Wall said. "They don't pay you to see how brilliant you are in negotiating an A+ paper. It's more important to get the transaction done rather than win every point for your side. Some points have to be negotiated away, and you focus on the stuff that's important.
"You don't need to be a genius," he said. "You just need to get the job done and give everybody an opportunity to profit."
Wall has worked in Winston's M&A group for 27 years, starting in the late 1970s, when hostile takeovers and leveraged buyouts were making their first dent in the corporate world.
"I was lucky to be learning at a time when a lot of takeover techniques were new and were going on everywhere. It really gave me a historical perspective on how things work," he said. "I do mostly friendly deals now, but I always enjoy the fight. One side wants to sell high, the other side wants to buy low, and everybody wants to be protected and have the other side assume all the risk. There's a lot of tension."
In 2004, Wall represented Orbitz Inc. in its $ 1.25 billion sale to Cendant Corp. In recent years he also represented Keebler Foods Co. in its $ 4.2 billion sale to cereal maker Kellogg Co. and large investors in Lombard-based U.S. Can Corp. when the company went private.
"M&A is half science and half art. You need to have a certain instinct, and Bob is a natural at it," said Michael Canmann, managing director and head of Chicago investment banking for Citigroup Global Markets. "Experience is what really pays off in the final negotiation. You need to know how people react, how deals unfold. In those situations, I have complete trust in Bob."
Wall said the key to understanding how to craft a good deal is to know the underlying economics and how the risk is spread. Private company deals, he said, are highly emotional and heavily negotiated because the owners are fewer and more invested.
"In a public company deal, the old stockholders can sell the firm, and if something goes wrong, the buyers have no recourse against old owners. The risk is extreme, and you have to reduce it," Wall said. "Then it's tough to lock a company up once you sign an agreement. Someone else can always swoop in, and you have to make sure your price is high enough. There are tons of variables to keep on top of."
But that's part of the fun, he said.
"It's an addicting job," he said. "You're the conductor of a symphony, I like to say."
Scott J. Davis
Scott J. Davis of Mayer, Brown, Rowe & Maw didn't originally think he'd be an M&A attorney. He started out as a litigator, but he found the work a bit too vicious.
"Litigation is always a fight. At least in M&A, parties have some common interest," Davis said. "I like the rules of the game in M&A."
After companies work with Davis, they tend to stick with him. In the last few years he has done a series of deals worth more than $ 10 billion for Devon Energy Corp. of Oklahoma, one of the largest oil and gas producers in North America.
"I used to be an M&A lawyer myself, so I know what I'm looking for in a good attorney, and Scott has every quality I look for," said Duke R. Ligon, senior vice president and general counsel at Devon. "He works well under pressure, comes up with timely responses in a professional way. He understands senior management and does high quality work. He's our guy."
Davis also represented Abbott Labs in its spin-off of medical products company Hospira in 2004 and Swisscom in the pending sale of Infonet Services to BT Group for $ 965 million.
"You have to be a combination of a quarterback and a poker player. Inevitably some bluffing is involved, and a good M&A lawyer knows when to hold and when to fold," Davis said.
"There are all types of personalities in M&A. There are some screamers, but that's by no means true of everyone. And there are some really affable people, but that's by no means true of everyone," he joked. "It's not a relaxed business. In order to do it, you have to be an intense person, you have to try very hard."
As far as the merger market in Chicago is concerned, Davis sees a sustained growth over the next few years and views the city's geographic centrality as its main asset.
"We're close to everywhere, and our local economy has been very stable and diverse. I represent companies in everything from telephones to seeds, natural gas, computer software and Entenmann's muffins," Davis said. "You're going to see a lot more cross-border deals, especially as the dollar remains low and foreign companies look to buy. The economy is growing, companies have lots of capital to play with and the Chicago market will go nowhere but up."
Mark D. Gerstein
"I like to refer to myself as a tinker-toy lawyer," said Gerstein, global co-chair of Latham & Watkins' M&A group. Each new deal is like a new puzzle, he said, where the previous solution won't work anymore, and you have to fit all the new pieces together.
"Take the acquisition of Orbitz Inc. by Cendant Corp. I represented Orbitz, which is owned by five rival airline companies, one in bankruptcy, one nearing bankruptcy, and all with different interests," Gerstein said. "We had data rooms in three different cities, approvals in more than one bankruptcy court. Any one of the airlines could have vetoed, and the risk of terrorist attack hovered over the deal. But we made a pretty creative structure and executed the transaction flawlessly."
Gerstein has been working in M&A for more than 20 years, the last eight at Latham and before then at Katten Muchin Zavis Rosenman. In addition to the $1.25 billion Orbitz deal, Gerstein also represented Kansas-based Koch Industries in 2004 in its $ 4.2 billion acquisition of textile maker INVISTA from DuPont.
"It's entirely possible that our transaction wouldn't have been successfully completed if we hadn't had Mark. He was often the only guy in the room who knew how to solve a problem," said Gary Doernhoefer, vice president and general counsel of Orbitz. "He's talented, smart, efficient. He knew our company inside and out. Even in issues on which we weren't involved, the other lawyers would call because they needed Mark. He was that good."
Gerstein said M&A lawyers get much of the attention when a deal goes well. But he said he is nothing without a good team behind him.
"An M&A lawyer is wholly dependent on his team. You're the point guard, but everybody has to shoot," Gerstein said. "At Latham, we try to spread the name recognition around. The tax lawyers, the finance, ERISA, and IP lawyers have to be top notch, and you have to have people you trust, from the associates on up."
Gerstein said the main perk of M&A is the talented people he gets to work with.
"They're the brightest executives and lawyers around," he said. "It makes working on these deals rewarding."
Kevin R. Evanich
Kevin Evanich has always gotten flak that private equity work is somehow inferior to public M&A.
"Six or seven years out of law school, I began asking myself the same question. Was I in the wrong field? Was my skill set too narrow?" Evanich said. "Then I realized private equity is even more complex than straight-up M&A. It's M&A with a twist."
Evanich is one of the founding members of the venture capital group at Kirkland & Ellis, which now has more private equity clients than any other firm in the world, he said. Private equity firms are also taking an even larger share of total corporate acquisitions in the marketplace, Evanich said.
"They're making major purchases. It's no different than a public company purchase, except that you have to do some pretty complex financing to come up with the money," Evanich said. "A company like IBM has all the cash in the world. Your client pushes a button, wires the money, and the deal is done. With private equity, you have to create a new company, you need to negotiate with senior and subordinated lenders, get equity financing, place 144A debt to the public. It's like managing a three-ring circus."
Clients say Evanich is particularly skilled as the ringmaster.
"He's a pretty seasoned attorney and can draw on an awful lot of experience to craft solutions to our problems," said Brian Simmons, a partner in Chicago-based private equity group Code, Hennessy & Simmons, which hired Evanich recently in its $ 700 million purchase of AMF Bowling Centers and its acquisition of Gundel Inc., a landfill equipment maker. "He's a senior guy, but that doesn't stop him from going into the trenches and giving us real hands-on advice. I can't say enough about him."
Evanich said private equity work involves substantial knowledge of public M&A because the target company is often a publicly traded one. The Gundel deal entailed tough environmental and SEC issues, and others thoroughly test your
"On a recent deal, I got a call at 8 p.m. Friday evening. The target company said our side had 48 hours to sign a deal," Evanich said. "We jumped in with a team of talented lawyers, didn't sleep for days, negotiated around the clock and had it signed by Tuesday. Piece of cake."
William R. Kunkel
William Kunkel of Skadden, Arps likes working under pressure, engineering a transaction despite the obstacles.
"It's like a battlefield, and you'd never get through it if you didn't have all these talented lawyers by your side, with you directing them to do their best under high stakes," Kunkel said. "You always have a sense of fulfillment at the end of a deal. You made it work."
Kunkel is known for making successful outcomes out of tough circumstances. His most recent M&A work was representing The Wrigley Co. in its $ 1.48 billion acquisition of the Life Savers and Altoids businesses of Kraft Foods Inc. He also represented Ivex Packaging Corp. in its $ 790 million merger with Alcoa Inc.
"Experience is foremost, but you also look for personal qualities in an M&A attorney. You work pretty closely and under pressure together, and you need to have a chemistry. I love working with Bill," said Howard Malovany, vice president and general counsel of Wrigley. "He's very responsive, he knows the area very well, he's a practical-minded person who gets us out when we're stuck. He doesn't stick just to law but makes sure he understands our business."
Kunkel said he knows the importance of getting a deal done right, not just on behalf of the directors and shareholders.
"These deals affect countless employees and their families. We have to make sure they get a good deal, too, with their pensions and benefits," Kunkel said. "M&A deals are challenging, demanding and put you in the same room with major decision makers. You have to balance a lot of interests, but hopefully you can fashion a deal that satisfies everyone to a certain extent. That's what makes our job tough."
Thomas A. Cole
Thomas Cole of Sidley Austin spends much of his time these days running the firm as chairman, but his bread and butter has always been M&A.
Cole has been practicing M&A in Chicago for almost 30 years, and firms around the country have come to rely on him for practical advice and leadership in critical transactions.
In 2004 he represented IMC Global Inc., the nation's largest phosphate producer, in its $ 3 billion purchase of Cargill Inc.'s fertilizer unit. The company used its stock to finance the transaction, so Cargill now has a controlling interest in IMC.
"It kind of makes you wonder who bought whom," Cole said.
Cole also represented R.R. Donnelley in its purchase of Moore Wallace; Exelon in its scuttled agreement to acquire Illinois Power; and Tellabs Inc. in its $1.9 billion purchase of Advanced Fiber Communications, a network equipment maker.
"Tom knows an awful lot about M&A. There isn't anything you could throw at him that he hasn't already done," said William Strong, vice chairman of investment banking at Morgan Stanley, who has worked with Cole for 20 years. "He's up to date. He's always prepared. He has developed from being just a good lawyer to being a trusted strategic adviser for his corporate clients."
Cole said the practice still manages to keep him on his toes because of the constant changes in economic factors, regulations and shifting corporate moods.
"They say 10 percent of M&A is financial analysis and 90 percent is psychoanalysis," Cole said. "The activity goes up and down as a measure of overall confidence. The stock market and interest rates affect it; corporate scandals affect it. Your job as the lawyer is to interpret their mood and give them realistic advice. Every deal has its complexities. Sometimes it's like untying the Gordian knot."
Cole said a good M&A lawyer needs excellent organizational skills and strong will power.
"You have to be willing to take a position and stick to it. You can't be wishy-washy," Cole said. "You have to be a good combination of litigator and corporate lawyer. With the increasing globalization of mergers, you also need more and more knowledge of international law. The biggest change I've seen over the last 30 years is how many time zones a transaction spans these days."
Robert S. Osborne
Bob Osborne said he thinks of himself equally as an M&A lawyer and a securities lawyer.
"The two go hand-in-hand," said Osborne, chair of the corporate department at Jenner & Block and an M&A lawyer for 25 years. "I do a lot on the securities side, and you need to have a strong securities background to be of any help to your public M&A clients."
Osborne moved to Jenner about two years ago after building a substantial M&A practice at Kirkland & Ellis. He has done frequent M&A work for General Motors, including its disposition of Hughes Electronics in 2003 and spin-offs of EDS, Hughes Defense and Delphi Automotive Systems. He also has done extensive work for General Dynamics and, shortly before its merger proposal, he represented Sears in acquiring 54 stores from Kmart Corp.
Osborne also served as general counsel for nine years to Lands End, now owned by Sears.
"He knows what his client wants, which is the most important thing in a deal. He understands the big picture of a deal and knows where to focus," said Warren Andersen, assistant general counsel at GM. "He's an excellent negotiator, he knows his way around the law, and he's creative."
Osborne said understanding the client is key to making a transaction work.
"First you have to master the nuts and bolts, but then you need to turn it into a broader vision and understand what the company really wants. You're constantly looking for ways to add value to that process," Osborne said. "You have to develop a kind of empathy. As M&A lawyers, we're trying to understand the company's business, how it operates, how it gets things done. That enables us to be more than just technicians. We're strategic problem solvers. Our work can be the difference between a merger's success or its failure."