The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
Kathleen (Kate) M. Mylod is a partner in Dechert’s global finance practice, advising on a range of commercial real estate finance matters. Kate’s practice focuses on mortgage and mezzanine debt origination; intercreditor, co-lender, and participation arrangements; equity investment and joint venture formation; preferred equity financing; real property acquisition, disposition, and asset management; secondary market acquisition and sales (including mortgage and mezzanine loans); and loan modifications, restructurings, workouts, and enforcement actions. She advises clients investing in a variety of commercial real estate asset classes, whether stabilized or transitional, including hospitality, retail, multifamily, office, and condominium.
Kelly Mathews, counsel in Dechert’s global finance practice, focuses his practice on a broad range of structured and leveraged finance transactions, with particular emphasis on representing asset managers, underwriters, sponsors, and issuers in collateralized loan obligation transactions, collateralized bond transactions, and asset back securitizations, as well as managers, lenders, and borrowers in connection with revolving and term leveraged loan warehouse facilities, repurchase facilities, loan to special purpose vehicle facilities, and other structured lending transactions. Kelly received his J.D. from the UNC School of Law. Prior to joining Dechert, Kelly interned for the Honorable Justice Paul Newby of the North Carolina Supreme Court.
Describe your practice area and what it entails.
Kate: My practice area is commercial real estate finance. I help investors deploy their capital in real estate assets globally, but mostly concentrated in the United States. In doing so, I originate mortgage loans, handle property acquisitions and dispositions, and facilitate joint ventures and other co-invest platforms. Also, if a commercial real estate asset becomes distressed, I will help my clients resolve the matter or seek an enforcement action.
Kelly: As part of Dechert’s structured credit and collaterized loan obligation (CLO) team, I advise asset managers and borrowers, in addition to underwriters/arrangers (typically large investment banks), lenders, and investors in connection with CLO, collateralized bond obligation (CBO), and hybrid transactions, leveraged loan warehouse facilities and other asset-backed credit facilities, and funds that are set up to manage and acquire CLO securities. I also advise managers and borrowers in a variety of fund financing structures, including rated feeders and collateralized fund obligations (CFOs). Increasingly, I advise, structure, negotiate, and draft bespoke and hybrid transactions that involve components similar to the ones described above. We are involved in every stage of a deal (and ancillary issues that arise out of a deal), beginning with the initial structuring and, in most cases, warehouse financing used to acquire assets before marketing and engaging rating agencies to rate the deal; then at the marketing and closing stages where terms are negotiated with prospective investors, rating agencies, and other participants (such as the trustee); and then closing the deal and every-thing in between. We see most of the market, so clients rely on us to help negotiate terms (both business and legal) with counterparties, with an emphasis on winning flexibility for our clients. We are also engaged after a deal closes, for example, when a loan acquired by a CLO that has become distressed enters a workout or restructuring.
What types of clients do you represent?
Kate: Dechert represents a spectrum of clients, which makes the legal work interesting! My clients include commercial banks, private equity funds, insurance companies, and sovereign investors. Most are U.S.-based, but some are foreign.
Kelly: We serve a diverse global client base, including some of the largest asset managers (generally private equity firms and hedge funds), borrowers and equity investors, and some of the most prolific CLO underwriters (major investment and commercial banks). We also represent large bank lenders in various asset-backed lending facilities.
What types of cases/deals do you work on?
Kate: My practice is transaction-based, so I regularly put deals together (and take them apart). For example, on my plate today is a mortgage loan origination on a hotel in Missouri, a consensual NYC office property handover in connection with a distressed lease, and a joint venture between a property developer and an equity partner to hold a portfolio of apartment buildings located throughout the United States. Over the years, I have worked on several investments related to some well-known properties; it is always fun to visit a city and say, “Oh, I worked on that!”
Kelly: I work on CLOs, leveraged loan and other asset-backed lending facilities, CLO funds set up to acquire CLO securities and—in many cases—manage CLOs, fund financing trans-actions such as rated feeders and CFOs, and bespoke and hybrid-type transactions that are structured to address the needs/desires of a particular client (or to cater to one of its own clients or investors) or to capitalize on unique opportunities in the space. These types of deals can range from ~$300 million to over $1 billion.
How did you choose this practice area?
Kate: It was serendipitous! I never expected to go into finance. As a junior attorney, I was staffed on a mortgage loan origination with a partner who everyone was afraid of, but for some reason, she took a shine to me. She taught me the fundamentals of commercial real estate finance, as well as the nuances of negotiation. I fell in love with the art of bringing together people in a deal and found real estate made sense to me—you can see it and touch it.
Kelly: First, the work never gets boring—each new matter presents unique challenges. Likewise, it is intellectually stimulating given the complex nature of the transactions and the constantly changing landscape (industry, market, regulations, etc.). I also recognized that working in the group offered tremendous opportunity, given our group is one of the most highly esteemed and award-winning in the industry (including for best CLO law firm). I had the privilege of working and learning from incredibly talented attorneys and was impressed by the expertise and innovative approach of our practice leaders, some of the most highly respected in the business. When I started, I was excited by the opportunities offered—junior associates who excel in our practice group have a unique opportunity to take on additional responsibility early.
What is a “typical” day like and/or what are some common tasks you perform?
Kate: There is no typical day! Each night, I make a to-do list to tackle the next day. Without fail, the next day, before I can even cross off the first few items, I get interrupted with a new matter, an unexpected issue, or a colleague who needs assistance. My work is never boring. In a typically unpredictable day, I find myself revising contracts, holding team meetings, talking with clients, and negotiating with opposing counsel. On other days, I may run a teaching session for a client, make a pitch for new business, take a mentee out to lunch, or research an issue for an upcoming publication. The to-do list is always changing, and I do manage to get it all done.
Kelly: Although there is no “typical” day, at a high level, my days generally comprise phone calls, emails, and drafting, reviewing, and negotiating transaction documents. My practice is very dynamic, which is one of the things I like most about it because it always presents new issues and challenges. The way my day ends up often does not resemble how I had mapped it out—our deals are often fast-paced, timing changes, and unexpected issues always arise. Our clients operate in a large, competitive, and growing industry and are subject to multiple regulatory regimes across their businesses, which constantly change, presenting unique problems we get to help solve.
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
Kate: For someone interested in a transactional practice, I recommend taking negotiation classes and/or participating in negotiation workshops and competitions. So much of what I do is about the push and pull between stakeholders, and you need to deftly identify their true goals and leverage points. In many instances, how a transaction goes will come down to relationships, so understanding what motivates people is key. Much of the substance in commercial real estate finance can be learned by doing, but for the academically inclined, I suggest classes on the Uniform Commercial Code, contracts, real property, and tax. Also, regularly following commercial real estate news will help one learn who the major players are in the industry.
Kelly: For me, there is no rival to hands-on experience and in-house training. I recommend courses focused on contract drafting and negotiation. Some classes I found helpful include Secured Transactions, Bankruptcy, and Securities Law. The good thing is that finance experience is not necessary. Skills-wise, our most successful associates are intellectually curious, take ownership of their assignments and careers, take initiative to add value and understand the bigger picture, are detail-oriented, organized, and engaged, and strive to cultivate relationships with folks within and outside the firm.
What do you like best about your practice area?
Kate: Two things: (1) No two financing matters in commercial real estate are the same. While you can work with the same blueprint from deal to deal, the outcome will be informed by the uniqueness of the real estate asset and the relationships driving the matter. (2) While the commercial real estate industry is quite large, it feels like a small place among the businesspeople and the attorneys. You never know who you will run into on a new deal or where that person will go. Relationships matter.
What are some typical tasks that a junior lawyer would perform in this practice area?
Kelly: Initially, junior associates typically:
- Prepare and manage closing checklists, which organize and track the status of transactions; manage timing, deal flow, and outstanding items needed to close.
- Review transaction documents.
- Draft ancillary transaction documents.
- Due diligence on opinion letters.
How do you see this practice area evolving in the future?
Kate: Everyone is focused on AI and how it may streamline diligence on real estate assets and document production. Opportunities for innovation with AI will enable the provision of legal services to our clients to be even more meaningful.
What kinds of experience can summer associates gain in this practice area at your firm?
Kelly: Summer associates can immediately gain hands-on experience, working on the same types of assignments as a first-year associate would. Summer associates are often invited to sit in on calls with clients and research questions related to new regulations and new approaches to issues that arise in our space.