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Wachtell Lipton Rosen & Katz faces a battle with Simpson Thacher & Bartlett to hold on to eight-year-old client Bank One following the bank’s $58bn (£31.69bn) merger agreement with JPMorgan Chase.
JPMorgan Chase is Simpson Thacher’s single largest client in a relationship that has survived four major mergers in the last 15 years.
JPMorgan Chase is purchasing Bank One and will have 17 executives to Bank One’s 10 on the executive committee, but Simpson Thacher could be threatened by Bank One’s charismatic chief executive Jamie Dimon.
Dimon will be president and chief operating officer of the combined company, with a promise to succeed JPMor-gan Chase’s William Harrison as chief executive in 2006.
Simpson Thacher’s involvement with JPMorgan Chase stems from 30-year-old links to Manufacturers Hanover. The firm advised Manufacturers Hanover on its 1991 acquisition by Chemical Bank and usurped Chemical Bank’s advisers Cravath Swaine & Moore, partly due to its strength in syndicated lending.
When Chemical Bank merged with Chase Manh-attan in 1995, Simpson Thacher’s lawyers sat opposite Milbank Tweed Hadley & McCloy. Milbank had been Chase’s main outside adviser for decades, but despite the merged institution retaining the Chase Manhattan brand, Chemical Bank was the larger company, and its general counsel William McDavid was appointed chief legal officer after the merger. And so Milbank’s stranglehold was crushed.
Simpson Thacher emerged as key adviser and represented Chase Manhattan when it merged with JPMorgan, which was advised by Davis Polk & Wardwell. While Davis Polk and Cravath have continued to advise JPMorgan Chase, Simpson Thacher won the Bank One instructions.
The New York firm’s chairman Dick Beattie has close relationships with senior figures at the bank. He is leading the team along with banking M&A rainmaker Lee Meyerson.
Although the Simpson Thacher-JPMorgan Chase relationship will be a hard nut to crack, Wachtell has a strong bond with Bank One and has devoted a heavyweight team to the deal. Wachtell partners Edward Herlihy, Larry Makow and Craig Wasserman are assisting Bank One.
In 1996, Wachtell advised Liberty Bank on its acquisition by Bank One and Herlihy started to develop a relationship, which was strengthened further when Bank One was merged with another Wachtell client, First Chicago NBD, in 1998. Wachtell was chosen as the sole outside adviser on the merger of equals.
Since then, Wachtell has advised the bank on the creation of a joint venture with GE in 1998, on the purchase of Security Capital Research & Management from GE in 2003, and the sale of Bank One’s corporate trust business to JPMorgan in 2003.