Crowell & Moring, a law firm that represents SBC in its merger with AT&T, is racking up huge billable hours this summer. The firm has hundreds of contract lawyers working in temporary office space in Washington, D.C., reviewing more than 1 billion documents involved in the merger.

Crowell & Moring is not alone. Across Washington and New York, law firms that represent telecom carriers are experiencing a surge in business as an unprecedented number of major telecom mergers churn through the system.

---

Wider Net archive
Our collection of stories that go beyond the speeds and feeds of the network and IT industries.

---

Dozens of law firms are representing carriers involved in the SBC/AT&T, Sprint/Nextel and Verizon/MCI mergers. They are handling the enormous amount of corporate and regulatory legal work involved with getting these mergers approved by shareholders, as well as state, federal and foreign regulators.

"For regulatory lawyers that deal with telecom, this could be a good year because they'll have lots of work,'' says David Katz, a partner at Wachtell, Lipton, Rosen & Katz in New York and an adjunct professor at New York University of Law. "If anyone is going to have new AT&T Range Rovers, it's the regulatory lawyers or maybe the investment bankers.''

The Verizon/MCI deal alone is employing lawyers from more than a dozen firms over the next year to get the merger approved.

"Every time there is merger and acquisition activity, it is a busier time for lawyers,'' Katz says. "When you have mergers involving regulated industries - be it airlines or telecom - in addition to getting the approvals from shareholders, you have to get the approvals from regulators. Suddenly that makes it an even busier time for law firms that specialize in those types of approvals.''

Katz, whose firm represents AT&T, says the carriers involved in these mergers will need approval from state telecom commissions, as well as U.S. agencies such as the FCC, the Federal Trade Commission and the Department of Justice. Even the European Union will need to approve some of these deals.

"The more consolidated the industry is becoming, the more the FCC or the Department of Justice are likely to take a closer look at the mergers,'' Katz says. "That means more lawyers will be involved because each firm has its specialty.''

How much each of the carriers will spend on legal fees this year depends on how much resistance the deals face from government regulators, legislators, shareholders, competitors and consumer groups, and how long it takes to get the deals approved. Experts say each carrier will spend millions of dollars on outside counsel.

"It could be as much as $20 million,'' says one telecom lawyer involved in a big merger, who won't reveal the fees his clients are paying. "It's a function of how much regulatory work is involved and how contested the deals are and how long it takes to get government approval.''

Yet experts say these legal fees, along with other costs related to the mergers, are minor compared with the cost savings that the combined carriers hope to attain through operational efficiencies.