Finance attorneys represent borrowers or lenders in transactions involving lines of credit, loans, or restructurings. Law firm practices tend to lean toward either the lender or borrower side, though some practices work on both sides. Financing can come from traditional banks as lenders or from private credit funds. In the U.S., the practice is heavily concentrated in New York where the majority of the banks and private lenders are located, but the practice can be international, and finance attorneys are in demand in international capital markets as well (London and Hong Kong, for example). The practice often involves acquisition finance supporting a larger M&A transaction, which means deadlines can fluctuate, and the hours can be erratic, especially on the borrower side, where the transaction timeline can be at the mercy of the lender’s side. Financing deals tend to be relatively short, so lawyers are frequently moving from one transaction to the next.
In our guide, Practice Perspectives: Vault’s Guide to Legal Practice Areas, attorneys from law firms with top-ranked Banking & Financial Services practices share insights about their practice, including what types of cases & deals they work on and what kind of training they recommend to excel at their field of law. Keep reading for their insights!
What types of cases/deals do you work on?
Penelope Yan, Associate—Allen & Overy: I work on finance deals involving debt (e.g., syndicated or bilateral credit facilities, asset-based loans, revolving loans, and term loan Bs) and equity (e.g., preferred share issuances). Most are secured by collateral, meaning the borrower has to grant a security interest (e.g., a lien or mortgage) over the borrower’s assets. One of the deals I’ve been working on for the past six months is a demand loan secured by cryptocurrency.
Christopher Ross, Partner—Paul Hastings: My practice focuses on complex finance transactions and credit arrangements, including those featuring a junior capital component or multiple tranches of debt.
Examples include the representation of:
- The agent and principal lender of a $330 million financing package, the proceeds of which were used by a private equity investor to finance the acquisition of a specialty manufacturer. Working with colleagues from the firm’s intellectual property and bankruptcy groups to analyze the collateral and enforcement implications of a critical patent license granted by a German company and governed by Swiss law, we conceptualized and implemented a bankruptcy remote special purpose vehicle to hold the patent license and ensure the client’s interests would be protected in the event of the borrower’s insolvency;
- The lenders, agent, and lead arranger of a $280 million initial term loan facility and a $45 million delayed draw term loan facility to a provider of fiber optic network services, the proceeds of which were used to refinance certain existing indebtedness of the company and for capital expenditures. This transaction required a federal and state-by-state analysis of complex collateral and approval issues due to the regulated nature of the company’s business;
- The agent and a lender in connection with the refinancing of a syndicated $775 million asset-based lending facility for a refined oil products distributor; and,
- The agent and lender of a $575 million first lien term loan facility and a $200 million delayed draw term loan facility to finance the acquisition of a leading provider of machine vision and artificial intelligence-powered video telematics solutions for commercial, public sector, and field services fleets by a private equity investor.
Heather Waters Borthwick, Partner—Shearman & Sterling: I typically work on acquisition financing transactions and advise lenders providing debt to finance the acquisition of a target. For example, when a private equity sponsor seeks to acquire a target or an existing private equity portfolio company seeks to make a strategic acquisition, they often compete against other bidders in an auction process, and typically prefer to finance the acquisition with a combination of equity investment and the proceeds of a debt facility, often a combination of a leveraged term loan and a revolving term loan. I will represent one of the potential lenders that are competing, in turn, to be the lead arranger of the credit facility. There is a competitive dynamic throughout the process and potential acquisition targets operate in a range of industries, including tech, healthcare, manufacturing, etc. No two deal processes are ever the same.
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
Penelope Yan: The negotiation workshop (mine was at the law school, but if yours doesn’t have one, see if they have it at the business school) and cyberlaw clinic (any kind of clinical work really) were very helpful for developing teamwork, effective interpersonal communication, and time/deal management skills. Strong reading comprehension, attention to detail, thinking independently, being organized, and being Word/PDF savvy are also important.
Christopher Ross: All corporate-related classes will be helpful, especially those that focus on contract drafting and interpretation. Secured transactions and bankruptcy are also key elements of my practice, so any substantive knowledge a student can gain from those classes will give them a great head start. Corporate Finance, which is often a business school class, is also useful because it provides attorneys with the background and vocabulary to allow them to speak to clients in their own language. Ultimately, on the job learning is more important than classroom knowledge, and an attorney that takes ownership of their career and skillset, and understands that the market is always evolving and that dynamics vary greatly from deal to deal, will find that ongoing self-study pays off in the long run.
Heather Waters Borthwick: Law students often get their first taste of a transactional practice as a summer associate. During our recruiting process, we don’t look for a particular list of classes or types of training; rather, we look for candidates with strong analytical skills and critical thinking ability, who can absorb new concepts quickly and manage time effectively. This is an apprenticeship, and part of our business model is to spend significant time training our associates. The faster our associates come up the learning curve, the better that it is for our overall practice. We devote a lot of time and effort to formal training, such as seminars and programs that are geared toward associates of particular levels of experience, and informal training, such as spending time with an associate before or after a conference call to ensure the associate understands the bigger picture and to answer specific substantive questions.
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