IFLR 1000
The Guide to the World's Leading Financial Law Firms

The meltdown of the subprime mortgage crisis, and subsequent regulatory reforms, have dramatically changed the landscape of securitisation. High-volume, cookie-cutter work in mortgage-backed securities, which was previously the bread and butter of many leading firms, has been the biggest casualty – but other sectors have suffered as well. "Before the economic crisis, there were very large slews of auto deals, credit cards deals etc." says one partner. "Those have all got hammered."

Demand for Collateral Loan Obligations (CLOs) has been seriously hampered by impending regulation, world events, and perceptions of their role in the collapse of the economy. Some financial institutions had hoped that Japanese banks would become big buyers of CLO papers, but following the earthquake, tsunami and nuclear crisis on their shores, many are reportedly putting their money elsewhere. Meanwhile, European buyers are constricted by legislation, which limits investors from buying into securitisations which do not offer 5% risk retention. At present, it is uncertain how US retention guidelines will affect CLOs, and the rules will not go into effect for two years. Whilst some firms report a short-term upswing in demand, which they attribute to a rush to beat the deadline, the future of CLOs looks bleak.

Though most securitisation lawyers feel the hey-day of the mortgage-backed assets machine is behind them, some report that work on complex, one-of-a-kind transactions is starting to emerge. "I think that as people try to cope with new layers of regulation and risk retention and people try to deal with the regulatory regimes, each deal is going to be much more customised," says one partner.

New legislation has also created more work on the regulatory side. With clients concerned over Regulation AB, and SPVs in danger of being treated as swap participants, financial institutions have recruited lawyers to help them draft comment letters in response to the new rules.

Dodd-Frank also includes a mandatory requirement that all eligible derivatives be cleared through a clearinghouse. This is designed to reduce systematic risk, but some lawyers say it will increase the expenses associated with derivatives. "I think derivatives still have a valuable role to play so people will adjust," says one partner. "It may be that they are used for different purposes or used in a different way. I don't think people are going to go out of business - all the major players are restructuring to comply with the regulations."

Lawyers were also confident that securitisation would survive in one form or another. "You are talking about trillions of dollars," says one attorney. "So either there's going to be a lot less people owning mortgages, or there's going to be some kind of securitisation."

Described by one competitor as "a powerhouse" in derivatives, Allen & Overy is widely acknowledged as having an impressive practice in the field. The firm acts as US and Hong Kong counsel to the International Derivatives and Swaps Association (Isda).

Over the last few years, Allen & Overy has lost some prominent partners, including Daniel Cunningham, who left for Quinn Emanuel Urquhart & Sullivan in 2009, and Joshua Cohn, who went to Mayer Brown in February 2010. In July 2011, partner Edward De Sear resigned from the firm.

Nevertheless, the firm's derivatives practice continues to receive strong market feedback. "I think they are at the top of the game," remarks one rival, while another describes the firm as "a very institutional player".

The firm's teams in New York and Moscow recently advised Mechel on its $251 million public offering of preferred shares in the form of American Depositary Shares.

Other notable work includes advising the Depository Trust and Clearing Corporation (DTTC) in creating a new joint venture with the New York Stock Exchange. The scheme will be called the New York Portfolio Clearing (NYPC) and will clear US fixed-income derivatives.

Bingham McCutchen jumps to tier two in the structured finance and securitisation rankings this year, following positive market feedback. Peers felt that the firm is reaping the rewards of its 2009 merger with McKee Nelson, described by one partner as "a securitisation powerhouse". The firm's New York and Washington, DC offices gained 120 lawyers, with most having expertise in structured finance work. "They have quite a lot of people who I think have significant experience in the area and I think are very highly regarded," says one competitor. "I would feel very comfortable referring work to people I know at Bingham."

Although McKee was known for its work in mortgage-backed securities, one of the sectors worst-hit by the financial crisis, Bingham has adapted by increasing its practice in other areas. The firm represents major players such as Sallie Mae, Goldman Sachs, Wells Fargo, JPMorgan Chase and RBS Securities. One client says, "They think about what to do from a business perspective and how to accomplish that. Having been around the structured finance world for a while, I have worked with all the top law firms and the folks at Bingham are by far the top structured finance attorneys."

In July 2010, prominent structured finance and securitisation partner Edward De Sear left the firm, subsequently joining Allen & Overy, while partner Vincent Sum joined Bingham's ranks in September 2010.

The firm served as underwriters counsel for Ford Motor Credit in a $1.5 billion sale of Ford Upgrade Exchange Linked Notes via the FUEL Trust 2011-1. The five-year asset-backed bond will convert to senior unsecured debt if two or three credit firms raise the auto maker's rating to investment grade. The first-of-its-kind deal closed in April 2011 and received national media attention.

Bingham also represented Sallie Mae in the acquisition of $27 billion of securitised federally-guaranteed student loans and related assets from The Student Loan Corporation. The transaction was the largest acquisition of securitised FFELP loans and added 1.3 million customers to Sallie Mae's database.

Cadwalader Wickersham & Taft is widely acknowledged as an international player in both derivatives and securitisation. The firm jumps to tier one in the structured finance category this year following strong market feedback and the acquisition of a team from McDermott Will & Emery, which includes nine partners. According to peers, the firm was a "mortgage machine" before the crisis, and has reacted to the decline in this sector by ramping up its practice in other areas, particularly energy. The team from McDermott arrived in January and February 2011 and is headed by Paul Pantano, who now leads Cadwalader's energy and commodities group. Eight of the new partners will be based in the US, and most have experience in derivatives and/or securitisation work relating to energy. One competitor says: "Cadwalader definitely increased its commitment to the energy trading area."

One client describes the firm's derivatives practice as "unparalleled", while another says, "We have presented them with very innovative structures and they have been able to deal with them effectively and improve on the structures." Partner Ray Shirazi is commended by one patron as someone who "gives fantastic advice and provides balanced risk-reward strategies", while associate Brian Foster is identified as "really responsive" and "up-and-coming." Structured finance partner Michael Gambro was also singled out for praise by one client, who says, "He's experienced, has unbelievably detailed knowledge in the securities business and is a very creative thinker."

Partner Karen Gelernt left the firm in January 2011 to join the New York office of Alston & Bird. Partner Drew Chapman joined from DLA Piper in May 2010, and Jeffrey Robins was promoted from special counsel to partner in December that year.

Cadwalader represents industry leaders including JPMorgan Chase, Goldman Sachs, Morgan Stanley, Barclays Capital, Deutsche Bank Securities, Bank of America Merrill Lynch, Credit Suisse and Wells Fargo Securities. The firm constructed a bespoke transaction totalling $1.3 billion for Bank of America Merrill Lynch and JPMorgan Chase, which closed in July 2010. The deal involved a $650 million senior loan backing a CMBS offering, and a $650 million junior loan backing an offering of tax-exempt Liberty Bonds. The deal closed in July 2010.

Other highlights of the firm's recent work include advising various major banks on issuances of over 2,200 structured products worth over $3.2 billion throughout 2010 and the first quarter of 2011.

With a leading derivatives practice and a strong presence in structured finance and securitisation, Cleary Gottlieb Steen & Hamilton continues to be regarded as being at the forefront of innovation. The firm represents both issuers and underwriters and has counselled sovereign debtors, particularly in emerging markets. During the first three quarters of 2010, it was involved in over $168 billion in agency mortgage-backed securities offerings. Prominent clients include Credit Suisse, HSBC, JPMorgan Chase, Morgan Stanley, Wells Fargo, UBS, NYSE Euronext, and Bank of America/Merrill Lynch.

The firm is also heavily involved in advising industry organisations on regulatory matters, such as the potential implications of Dodd-Frank. Partner Edward Rosen is outside counsel to The Securities Industry & Financial Markets Association on matters including recent legislation relating to CFTC reauthorisation and the regulation of derivatives. The firm also advises the International Swaps and Derivatives Association and The Securities Industry & Financial Markets Association, amongst others.

The firm's ability to construct complicated, one-of-a-kind deals attracted admiration from rivals. "To understand derivatives, a lot of the knowledge comes from knowing the commercial market," says one competitor. "They have a very strong institutional practice in the commercial market, in both debt and equity."

In May 2011, the firm provided advice to underwriters on over $23 billion of Freddie Mac, Fannie Mae and Ginnie Mae mortgage-backed securities, bringing its total agency mortgage-backed work in 2011 to more than $106 billion worth of transactions.

The firm also represented Bank of America/Merrill Lynch as initial purchaser in one of the first CLOs to close since the financial crisis. The transaction, which took place in November 2010, involved a $300 million Reg S/Rule 144A collateralised loan obligation transaction by LCM VIII.

With a derivatives practice that is the envy of law firms around the world, Davis Polk & Wardwell continues its tier one reign this year. The firm is described by competitors as having a "market-leading position in equity derivatives" and being "very big on regulatory reform". It has established itself as an innovator on legislative changes over the past few years, and its regulatory expertise has boosted its capacities in other practice areas.

One client describes the firm's advice as "timely" and "very high quality", adding, "I think they treat us as an important client, so we get very good service from them." The firm's clients read like a who's who of international financial institutions, with companies including Barclays Capital, Credit Suisse, Deutsche Bank, Goldman Sachs, Wells Fargo Securities, Citigroup Global Markets and Banc of America Merrill Lynch.

Davis Polk has recently been involved in a number of groundbreaking transactions. These included advising underwriters on the $23.1 billion IPO of General Motors, which closed in December 2010 and was the largest equity-linked offering by a US issuer. The U.S. Department of the Treasury, Canada GEN Investment Corporation and UAW Retiree Medical Benefits Trust, as shareholders, sold the majority of the shares in the company, and General Motors sold shares of its Series B mandatory convertible junior preferred stock. Both included full exercise of the over-allotment option.

In June that year, the firm also advised the joint lead book-running managers in the largest-ever registered equity offering by a US utility company. The firm represented Credit Suisse Securities US, Merrill Lynch, and Pierce Fenner & Smith in the offering of $2.48 billion of common stock and $1.15 billion of equity units of utility company PPL. In April 2011, the firm advised the joint lead book-running managers on PPL's concurrent SEC-registered offerings of $2.33 billion of common stock and $978 million of equity units. The proceeds of the April 2011 transaction were used to repay some of the £3.6 billion bridge loan PPL used to fund its acquisition of UK electricity business Central Networks.

Dechert's derivatives practice benefits from its position as one of the leading firms in investment funds. The firm has particular expertise in issues arising under the US Commodity Exchange Act and related regulations.

Dechert's derivatives practice is led by M Holland West, who joined in August 2010 from Shearman & Sterling, where he was head of the global hedge fund, private equity, derivatives, and structured finance practices.

The firm's structured finance and securitisation practice has also seen some movement. In December 2010, partner Laura Swihart joined the group, and partner Steven Molitor left it in August 2010 to become the chief operating officer of Galton Capital Group, a residential mortgage credit fund manager.

Dechert represents Freddie Mac in connection with its commercial mortgage loan scheme, known as the K program, which involves five to 12 deals per year. The most recent, K11, was a commercial mortgage-backed securitisation of 76 multifamily mortgage loans, which closed in March 2011 and was worth $1.19 billion.

The firm also advised H/2 Capital Partners on its acquisition of the B Piece of the JP Morgan Chase Bank 2010 C-2 CMBS securitisation, worth $1.1 billion. The transaction involved 30 mortgage loans, secured by 47 properties. The firm's work included reviewing and commenting on the securitisation issuance documentation and reviewing certain mortgage loans to ensure conformance with emerging market standards.

Linklaters continues to build on the success of its structured finance and derivatives practice, which has particular expertise in OTC derivatives. The firm advised Barclays Capital, Citigroup Global Markets and Deutsche Bank Securities, as international joint dealer managers, on the Republic of Argentina's $18.3 billion exchange offer in May 2010.

In a transaction announced in February 2010, the firm is advising the Royal Bank of Scotland on a $1.7 billion transaction involving the sale of the metals, oil and European energy commodities trading businesses of RBS Sempra Commodities. The international deal included a total return swap structure, which was governed by New York law and required the negotiation of a complex exposure calculation and valuation methodology accounting for multiple collateral streams. Completion is subject to permission from various authorities, including anti-trust and other regulatory approvals.

With a practice that is the envy of law firms all over the world, Mayer Brown maintains its tier one position in the structured finance and securitisation rankings this year. Its attorneys, based in the Americas, Asia and Europe, have what one competitor describes as a "practical orientation and a very broad range of experience". The firm has been at the cutting-edge of recent legal developments affecting troubled financial products, and has particular expertise in structuring bespoke transactions. Mayer Brown represents industry heavyweights including Societe Generale, HSBC, Citigroup, General Electric, Barclays and Bank of America.

In 2010, the firm boosted its already accomplished team with the acquisition of derivatives specialist Joshua Cohn to lead its US derivatives and structured products practice. Cohn is heavily involved with the International Swaps and Derivatives Association. "That was a pretty good jump for them," remarks one competitor. Senior statesman Jason Kravitt was also singled out for praise by peers, with one commenting, "He really was there at the beginning. He wrote a two-volume treatise which is kind of the structured finance reference in the industry. He has built a really enormous practice in Mayer Brown."

Rivals feel that the firm's CLO practice took a hit when that market declined following the financial crisis, but with what peers acknowledge as one of "the broadest practices, spanning a bunch of different asset classes", it has been well-positioned to survive the mortgage meltdown. A client says, "Many law firms don't understand the practical implications of the advice they give. Mayer Brown always gives good advice and they don't bend the rules, but they understand that sometimes solutions that make legal sense don't necessarily make business sense." The client is particularly impressed by partner Paul Jorissen, whom he describes as "totally attuned to the market".

In a deal which closed in November 2010, Jorissen and partner Chris Gavin led a team advising Barclays Bank and Barclays Capital on a $20 billion transaction. The deal established the first collateralised commercial paper program used to finance a financial institution's prime brokerage business.

Other notable work includes representing JPMorgan Securities in the first ever US offering of asset-backed securities backed by Australian auto lease-backed securities. This deal was the first US offering of any Australian asset-backed securities since the financial crisis.

Morrison & Foerster continues to enjoy a thriving derivatives and structured finance and securitisation practice. The firm's lack of focus on commoditised MBS/ABS transactions has helped it successfully navigate the markets following the financial crisis, when demand for these types of products collapsed.

In July 2010, the firm represented Toronto-Dominion Bank in a $2 billion Rule 144A and Reg S covered bond offering. The underwriters were RBS Securities, TD Securities (USA), Barclays Capital and Deutsche Bank Securities.

In April 2010, the firm advised the Royal Bank of Canada on a Rule 144A/Reg S offering of $1.5 billion, 3.125% covered AAA-rated bonds, due 2015. The bonds were offered simultaneously in the US, Europe and Canada. This was the second covered bond offering of 2010 in the US.

With a history as one of the leading firms in mortgage-backed securities, Orrick Herrington & Sutcliffe has suffered some disruption following the meltdown of the subprime mortgage market. The firm recently experienced the loss of several of its leading lawyers; David Katz and Michael Petronio went to Willkie Farr & Gallagher in July 2010, while James Croke left for Chapman and Cutler in January 2011. However, rivals remain confident that it will recover from the difficult conditions. One peer speculates that the issues "may be just a blip in time," adding, "They have done a lot of stuff - they could probably adapt."

The firm continues to attract praise from clients and competitors, particularly in regard to its regulatory work. One client commends the firm for being "very well-connected in terms of communicating on proposed changes and discussing them with regulators." Partner Michael Mitchell was involved in drafting the American Securitisation Forum's industry comment letter on the SEC's 2004 proposals concerning Regulation AB.

One peer credits Mitchell, a former special counsel with the Securities and Exchange Commission, with making a "phenomenal" contribution to discussions on new legislation. "He has a way of taking really stupid things that other people say and making them sound intelligent," says the competitor. "He's just dynamite at that. I am really impressed by him."

In a deal which closed in March 2011, the firm advised the Redwood Trust as sponsor on a $290 million RMBS offering – the first public offering of private-label mortgage-backed securities that year. The firm also hosts regular breakfast briefings on various topics including a recent series on Dodd-Frank, which was attended by more than 150 companies.

Peers continue to regard Paul Weiss Rifkind Wharton & Garrison as a strong contender in structured finance and derivatives. The firm is known for its ability to handle complex matters, and has experience in cross-border derivatives and intellectual property securitisations. "In esoteric assets we see Paul Weiss," says one competitor. "They tend to do a lot of those return auto credit card traditional finances." Another rival notes, "They have a good bankruptcy group that has been exposed to this area."

In a deal which closed in July 2010, the firm represented Baseball Finance in the closing of a $100 million loan, which will be used by Major League Baseball to make loans to clubs in the league. Bank of America acted as administrative agent for the senior secured revolving credit facility, and a syndicate of lenders also participated in the deal.

The firm also represented Barclays Capital as structuring advisor and lead bookrunning manager, in connection with a $355 million offering of secured billboard revenue notes for Adams Outdoor Advertising. The notes were secured by the revenues generated by its billboard assets. The deal closed in December 2010.

Shearman & Sterling continues to impress peers and clients with a standout derivatives group and a respectable structured finance and securitisation practice. The firm is widely recognised both for its regulatory expertise and its experience with structured products and exchange-traded and OTC derivatives.

Several competitors express admiration for partner Donna Parisi. "She's very articulate, very smart and she's been doing a significant amount of work with the Dodd-Frank reform," says one competitor. A client who has worked with the firm in securitisation says he has been "very satisfied with the personal dedication to deliver a quality legal product on time and within a prescribed budget."

The firm represented Bank of America Merrill Lynch in managing its exposure to Lehman Brothers entities following Lehman's bankruptcy. This included an analysis of derivatives and other exposures and advice regarding termination, liquidation, netting and set off rights pertaining to positions and collateral. The practice also provided strategic advice on managing counterparty risk.

Shearman & Sterling is also advising the Depository Trust & Clearing Corporation in establishing and operating infrastructure services for the derivatives industry. These include the establishment of DTCC Derivatives Repository. The new entity will serve as a repository for transaction data for equity and credit derivatives, in accordance with new regulatory requirements to be imposed under Dodd-Frank and expected European regulation.

Sidley Austin has a top-notch structured finance and securitisation practice and a noteworthy derivatives team. The firm's work spans over-the-counter and exchange-traded derivative products around the globe. Clients include Citigroup, Deutsche Bank, Wells Fargo, JPMorgan and Goldman Sachs.

Rob Robinson was singled out for praise by one peer, who says, "We deal with him all the time on derivatives and structured finance. We do quite a lot of complex transactions with him." Another peer identifies Renwick D Martin, who has worked in the mortgage-backed area since 1977, as "a very senior statesman" and "a star".

One client of the firm's derivatives practice says, "We think they are at the top of the game with regards to complicated derivatives workout transactions." The client adds that partner Ellen Pesch "has particularly stood out, due to her detailed knowledge regarding all aspects of derivative law."

Over the last year, the firm has been at the forefront of regulatory reforms. It advised clients in the OTC derivatives and related securities markets on regulatory reforms under Title VII of Dodd-Frank, and other provisions. The firm was also engaged by the International Swaps and Derivatives Association to assist with netting opinions on US insurance companies and advise on Dodd-Frank-related regulations proposed by the Commodity Futures Trading Commission.

In transactions, Sidley represented Deutsche Bank in Frankfurt, London and New York on a CDS transaction concerning a €775 million ($1.1 billion) portfolio of European small and medium-sized corporate credits. The firm also advised Deutsche Bank on a "pay as you go" CDS, which repackaged a €30.25 million subordinated credit linked note from a prior synthetic CLO transaction on a leveraged basis.

The derivatives practice of Simpson Thacher & Bartlett has flourished under the leadership of partner Joyce Xu, and its structured finance department has earned the respect of rivals for its work on complex transactions. Peers identify structured finance partner Laura Palma as an authority on esoteric assets. "Laura Palma is good," says one rival. "I really like working with her."

In December 2010, Simpson Thacher represented C R Bard in its entry into an accelerated share repurchase transaction with Goldman Sachs of $750 million of the company's common stock.

In another highlight, the firm advised Credit Suisse Capital in a share forward deal with UBS. The deal referenced shares of Stillwater Mining Company together with an issuance by UBS of $219.4 million of 9.375% mandatorily exchangeable notes, due 2012, linked to the company's shares.

Skadden Arps Slate Meagher & Flom is regarded by peers and clients as having a world-class practice in structured finance and securitisation, and a strong derivatives team. The firm's broad expertise has helped it navigate successfully through the difficult economic conditions of recent years. "I think Skadden has a very diverse practice," says one rival. "They don't have a ridiculously large group. They did not have a huge mortgage-backed machine. They have much more depth and breadth in other areas." Clients include JPMorgan Chase, Macquarie Leasing, BlackRock, Goldman Sachs and Mitsubishi Motors Credit of America.

The firm's reputation received a boost in August 2010, when partner Mark Young joined its Washington, DC office. One peer says, "He's really the lawyer who's leading the charge on derivatives, on Dodd-Frank, and he's a very competent guy." Clients were also enthusiastic about the firm. "Their commitment to getting us through the first transaction we did with them was just phenomenal," says one patron, who works with Skadden in structured finance. Partner Susan Curtis and her team were described by the client as "exceptionally diligent".

In a Rule 144A deal which closed in March 2011, the firm represented Macquarie Leasing and subsidiaries of Macquarie Bank, an Australian financial services company, in one of the few foreign consumer ABS transactions to be sold into the US market with a currency swap to US dollars. The cross-border offering, worth $750 million, was backed by a portfolio of finance leases, commercial hire purchase contracts and chattel mortgages on motor vehicles located in Australia. These were denominated in Australian dollars.

Other notable work includes representing a syndicate of underwriters in the second-largest owner of regional malls in the United States, in a $2 billion equity offering. The November 2010 transaction, for New GGP, the successor to General Growth Properties, partially funded General Growth's emergence from the largest US real estate bankruptcy ever.

The derivatives practice of Stroock & Stroock & Lavan has expertise in the physical commodities market, and competitors note that it "does a fair amount of fund work".

In late 2010, partner Lois Weinroth retired from the firm's structured finance and securitisation group.

Sullivan & Cromwell leaps up two tiers in the derivatives rankings this year. Peers recognise that the firm, which has a powerhouse practice in financial service regulatory, is a major influence in lobbying and regulatory work relating to structured finance and derivatives. In the current legislative environment, this expertise is becoming increasingly sought-after by clients. "They are held in high esteem," says one competitor.

Kenneth Raisler who leads the firm's commodities, futures and derivatives group, is described by one rival as "a smart guy and an outstanding lawyer in this space." Structured finance partner Rebecca Simmons attracts notice from peers as "an up-and-comer".

Simmons led the team that represented the group of commuting counterparties in CIFG's restructuring, which was named Restructuring Deal of the Year at the IFLR Americas Awards 2009. She also developed the first synthetic triple-A rated derivatives products program for an insured US bank, and the first synthetic securitisation of swaps receivables.

Recent highlights of the firms work include advising UBS on its SFr15.6 billion ($14.9 billion) rights offering. The transaction was the second-largest rights offering conducted by a financial institution since the dislocation of the credit market.

The aftermath of the financial crisis has presented opportunities for Weil Gotshal & Manges, with clients seeking to draw on the experience of its top-notch bankruptcy practice in relation to structured finance and securitisation matters. The firm has continued to build on its success in recent years. It received the IFLR magazine's Securitisation Team of the Year award in 2010, and its Securitisation Deal of the Year prize in 2011.

In a case which utilises both aspects of the firm's expertise, Weil Gotshal is representing Lehman Brothers in ongoing matters in the bankruptcy court. The firm is presenting issues of first impression to the court, concerning the complexity and size of Lehman Brothers' multi-trillion dollar securitisations and structured products portfolio.

In another notable representation, an interdisciplinary team from the firm is assisting AIG and its subsidiary AIG Financial Products in analysing all aspects of the latter's trillion dollar portfolio of credit default swaps referencing multi-sector CDOs, interest rate swaps, regulatory capital credit default swaps, and corporate arbitrage credit default swaps. The firm is also providing AIG with general advice relating to securitisations and structured products.