Large Law Firms Lead Mega Deals in AI
Large law firms hold a clear advantage when it comes to securing work on major deals involving artificial intelligence. According to Alex Kelly, co-chair of Latham & Watkins’ global M&A and private equity practice, these transactions largely focus on AI data centers and their supporting infrastructure. Such deals require expertise across multiple industries and practice areas—something smaller firms often lack.
“The intersection of technology, infrastructure, real estate, and regulation make a perfect deal for us because you need a firm that can speak all of those languages fluently,” Kelly explained. “Our clients are gravitating towards firms that can deploy deal teams across jurisdictions overnight.”
Data Supports Big Law’s M&A Dominance
Bloomberg Law data from the first half of the year confirms Kelly’s view. Four of the five firms with the highest M&A deal values ranked among the top 20 law firms by revenue. Latham & Watkins led with approximately $269 billion in deals, including guiding CyberArk Software Ltd. in its $25 billion sale to Palo Alto Networks Inc. Kirkland & Ellis followed with about $251 billion, then Davis Polk & Wardwell ($149 billion), and Paul Weiss Rifkind Wharton & Garrison ($142 billion).
Wachtell Lipton Rosen & Katz was the only top-five M&A firm not in the top 20 by revenue. Known for its lean structure, it ranked 50th in overall revenue in fiscal 2024. This data underscores how bigger firms leverage their broad capabilities and resources to win large, complex AI-related deals.
Latham’s Role in AI Mega Deals
Latham’s M&A team has been involved in several high-profile AI and data center transactions in 2024. These include:
- The $25 billion CyberArk sale announced in July.
- Advising Amphenol Corp. on its $10.5 billion purchase of CommScope Holding Co.’s connectivity and cable solutions business in August.
- Guiding Meta Platforms’ $14 billion investment in AI startup Scale AI in June.
Kelly, who became co-chair of the M&A and private equity practice in May, has been with Latham for over 15 years. Her leadership experience extends across firm management and client advisory roles, including working with asset managers like Sixth Street Partners, Ares Management, and PIMCO, and private equity firms such as Warburg Pincus and Hg Capital.
Regulatory Focus on AI and Deal Risks
The rapid growth of AI markets brings regulatory scrutiny, especially around antitrust and national security concerns. Kelly highlighted the global antitrust risks as AI capabilities become concentrated, saying, “We’re going to see people thinking about antitrust risks globally where AI seems to be getting aggregated all in the hands of one user.”
Tariffs and market conditions remain a key consideration. Lawyers expect deal activity to increase once tariff policies stabilize. However, some clients may accept less favorable tariff rates for certainty rather than waiting for policy changes.
“With the yo-yo, tariff policy folks don’t have any certainty to what’s going to happen,” Kelly noted.
Market Trends in M&A and Private Equity
The broader market is still adjusting after recent economic uncertainty, which has made going public less attractive for many private companies. Instead, clients are often selling portions of their businesses to multiple sponsors in stages to access liquidity.
Private equity-owned companies are also increasingly using single-asset continuation vehicles, effectively extending the investment horizon. Kelly pointed out a rise in minority equity deals and hybrid preferred instruments designed to provide liquidity solutions for sponsors.
“We’ve seen a significant increase in the amount of minority deals,” she said. “In some cases, we’ve seen hybrid, preferred structured instruments to help sponsors get liquidity.”
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