Cravath and Time Warner's all-or-almost-nothing deal;$35 million fee could set record.(Brief Article)

Crain's New York Business, February, 2000 by gandel, stephen

Cravath Swaine & Moore is set to rake in the largest fee ever for advising on a merger, and it will forgo billing hourly to do so. Time Warner Inc. has agreed to pay Cravath a whopping $35 million for its work advising the media giant on its merger with America Online Inc., according to sources close to the deal.

The fee, though, is contingent on the merger being completed. If the companies call off their merger, Cravath would get just a small fraction of that amount. The contingency deal that Cravath has worked out with Time Warner is similar to other creative pricing arrangements being arranged by law firms in all practice areas. "Most big law firms do two or three merger and acquisition deals on contingency a year," says one legal consultant. But the...

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