Cravath Swaine & Moore has taken the lead role on Time Warner's split from AOL, signalling the end of a $124bn (£77bn) tie-up that in 2000 was the biggest deal ever.

Time Warner returned to Cravath for advice on the spinoff, after the elite US firm acted on on the original merger in 2000.

The merger, struck at the peak of the internet boom, handed roles to Cravath, Simpson Thacher & Bartlett (lead counsel to AOL), and Mintz Levin Cohn Ferris Glovsky and Popeo (AOL's longtime general counsel). Lawyers involved in the deal included Cravath's Robert Joffe, Simpson's Richard Beattie, and Mintz Levin's Anne Bruno.

The deal was notable for the landmark fee arrangement Cravath struck with Time Warner, whose general counsel at the time was a former Cravath associate.

Cravath's partners agreed to an all-inclusive $35m (£22m) fee that was almost entirely contingent on whether the deal went through. If it failed, the lead partners would go home with nothing.

The $35m fee was considered to be among the largest ever for a law firm on an M&A deal.

Since the merger, the value of AOL has plummeted from as much as $20bn (£12.5bn) as recently as 2005 to about $6.5bn (£4bn), while revenues from subscriptions and ads dropped by more than 20% in the first quarter of 2009 compared to last year.

This article first appeared on The Am Law Daily blog on americanlawyer.com.