Australia's large national firms shared the spoils in the M&A market last year, but global and boutique firms are catching up.
Bloomberg and Thomson Reuters have released their respective global M&A league tables for 2011.
According to the Bloomberg analysis, Allens Arthur Robinson ($US45.3 billion), Freehills ($US36.3 billion), Mallesons Stephen Jaques ($US33.8 billion), Clayton Utz ($US33.5 billion) and Simpson, Thatcher & Bartlett LLP ($US33.3 billion) were the top five firms acting on announced deals in Australia and New Zealand by value.
By deal count, Minter Ellison, with 93 deals, led an all top-tier top five that included Freehills (62), Mallesons (57), Allens (55) and Clayton Utz (55).
The Thomson Reuters table also painted a picture of top-tier domination.
Its survey, which includes announced and completed deals, found that Freehills emerged as the leading firm by value for completed deals ($US63.5 billion), ahead of Clayton Utz ($US57.3 billion), Allens ($US50.9 billion), Blake Dawson ($US49.3 billion) and Mallesons ($US46.6 billion).
While Mallesons remained in the top five, it fell from 2010's ranking of number two for completed deals to number five this year.
Speaking to Lawyers Weekly, David Friedlander, a senior M&A and capital markets partner at Mallesons, said his firm's merger with King & Wood would increase its competitiveness in the Australian M&A market in 2012.
"There is no question that the way Asian clients operate is very different. We have all been learning that in recent years with cross-border deals, and now the firm will need to learn that faster, because we will see more of that inflow of work," he said. "The offering is an Asian solution, so that is the key difference; to be able to offer an Asian solution to clients from Australia and, particularly, offshore."
The leading firms in the Thomson tables in 2011 also featured prominently in the tables for 2010 - a year in which Allens pipped Mallesons and Freehills for completed deals.
Despite the top tier remaining at the top of the M&A tree, the status quo is being challenged.
After its first full year in Australia, Allen & Overy, which acted on the largest Australian M&A deal in 2011 (the $US12.3 billion sale of Foster's to SAB Miller), moved from 36th in 2011 to ninth in the Thomson Reuters table on completed deals. Other significant movers included Johnson Winter & Slattery (38th to 11th) and Clifford Chance (42nd to 22nd).
"Our deliberate and long-established business model, involving senior lawyer expertise and availability, is now widely recognised as a genuine alternative to the high-leverage firms for larger or more complex public markets deals," said John Keeves, the JWS head of transaction and advisory practice.
Chapman Tripp was the leading New Zealand firm, ranked 19th.
The bear is out of the woods
The M&A tables painted a gloomy outlook for the domestic market in 2012.
According to Bloomberg, deal volume in Q4 plunged by more than 42 per cent when compared to Q4 2010.
In the Bloomberg analysis, the Asia-Pacific region accounted for 22 per cent of the total deal volume of $US2.27 trillion, which was a slight increase on $US2.19 trillion from 2010.
The similarities between 2010 and 2011 were largely due to a buoyant first half of last year, with Q4 2011 being the weakest quarter, with a 29 per cent global decrease on Q4 2010.
Thomson Reuters showed a calendar year increase of M&A activity of 7 per cent in 2011, with a 24 per cent decrease across the second half of last year.
Despite the poor end to 2011, Friedlander remains hopeful that the M&A market will turn around.
"I was pretty pessimistic in early December, and I wouldn't say that I am optimistic about 2012, but there are definitely more optimistic signs," he said.
Friedlander said he had received around half a dozen approaches from private equity houses about investing in the Australian market this year, and that had given some buoyancy to the market.
Private equity firms were the strongest acquisitive group in the Bloomberg analysis.
While there are some tentative signs that the Australian M&A market might not slip as deeply into the funk that has caught much of the western world's economies, the current climate that sees both a bearish capital market and a depressed M&A market means law firms have to re-think strategy.
"There is pressure on fees, and it is definitely pressure that hasn't been there for a period of time," said Friedlander. "What has been fascinating is the extent to which the global law firms have been discounting to get the volume [of work]."
"With some exceptions, they don't have the expertise or depth for some of these transactions, so that has had no impact, but for the more vanilla work, it has had an impact."