Competition is tight for legal fees in this highly litigious society. Last year, very little business separated the top securitization legal shops from the rest of the pack across the ABS, MBS and CDO markets.
Law firms Sidley Austin Brown & Wood and Thacher Proffitt & Wood were the top legal advisers for asset-backed underwriters and issuers, respectively, in 2002, according to numbers released last week by Thomson Financial. Meanwhile, McKee Nelson LP was the top legal shop among MBS underwriters and Cadwalader, Wickersham & Taft led in representing MBS issuers. In CDOs, Cleary, Gottlieb, Steen & Hamilton represented the most underwriting business and Orrick, Herrington & Sutcliffe LLP handled the most business for issuers.
Sidley Austin handled over $69 billion of domestic ABS supply for underwriters in 2002, for a 15.8% market share. That total was down slightly from the $71 billion of business it booked in 2001, a year in which it also was the top legal counsel for ABS underwriters.
Thacher Proffit, on the other hand, worked on $40.2 billion of ABS supply on behalf of issuers, more than double its volume from the year before. Thacher Proffitt led issuer legal counsel with just 9.6% of the market. Thacher Proffitt jumped to the top spot in 2002, up from the third spot in 2001.
The one anomaly was the MBS manager market, for which the top MBS legal advisor, McKee Nelson, dominated its competition and booked $81 billion in new-issue business, capturing 30.8% of the market. The next-closest competitor for MBS underwriters was Sidley Austin, with 17.7%.
The MBS issuer crown went to Cadwalader, Wickersham & Taft, which handled over $56.7 billion of business, or 21.4% of the market. Cadwalader was the top MBS issuer counsel in 2001 as well, with a comparable amount of issuance.
In a down year for the CDO market, Cleary, Gottlieb, Steen & Hamilton was the leading choice for underwriters of CDO product with $6.6 billion for the year, or 12% of the market. This level was up, however, from its 2001 numbers, which were also good enough to lead among CDO underwriters.
CDO issuers turned to Orrick, Herrington & Sutcliffe for legal oversight. The firm handled $5.6 billion of total CDO supply, good for 10% of the market. This represents a decline in business from 2001, when it led with $6 billion.