The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
Jennifer Kent represents private equity sponsors and their portfolio companies, as well as private and public company borrowers, in secured lending and other financing transactions at all stages of the business lifecycle. In addition to her commercial practice, Ms. Kent served as a Global Chair of Latham’s Black Lawyers Group and is a former member of the firm’s Recruiting Committee. She has been widely recognized by organizations, including the National Law Journal, for both her commercial work and for her leadership in the area of diversity, equity, and inclusion.
Michèle Penzer has built a robust finance practice, navigating lender and borrower clients through a variety of market conditions for over three decades. Ms. Penzer is recognized as a leading attorney and is ranked for U.S. banking and finance in Chambers Global, Chambers USA, and The Legal 500 US. She currently serves as Global Chair of the firm’s Recruiting Committee and has held multiple other leadership roles, including as former New York Office Managing Partner, former Global Co-Chair of the Banking Practice, former member of the firm’s Executive Committee, former New York Chief Community Engagement Partner, and former Chair of the firm's Diversity Committee and Associates Committee.
Describe your practice area and what it entails.
Jen: I sit on the borrower side of our practice, where I help companies obtain loans for an array of purposes, whether that be for an acquisition or a rainy-day fund. We typically work on secured loans, which are transactions in which the company has pledged its assets as collateral for the loan—for these loans, not only do we complete the credit documentation outlining the terms of the loan, we also work on the steps required to grant a perfected valid security interest in the assets of the company.
Michèle: I sit mostly on the other side of the table, working primarily with lenders on credit facilities often amounting to hundreds of millions or billions of dollars. I represent banks or direct lenders in the most senior part of the capital structure and help them structure and negotiate deals, understand the risks they are assuming, and document the transaction.
What types of clients do you represent?
Michèle: On the lender side, we represent banks such as JPMorgan, Goldman Sachs, Barclays, Citibank, Bank of America, and UBS, and direct lenders such as Golub Capital, PSP, and others. We also represent a significant number of private equity shops and their portfolio companies, such as The Carlyle Group, Partners Group, GTCR, Onex, Leonard Green, and Platinum Equity, and work with many brand-name public companies, such as American Airlines, Peloton, IMAX, Vivid Seats, and Nestlé, among others. Our practice and client base are incredibly broad.
What types of cases/deals do you work on?
Jen: We work on a range of financings, including syndicated first- and second-lien credit facilities, asset-based loans, recurring revenue facilities, subordinated debt facilities, and direct lender/clubbed credit facilities. Many of the deals I work on are cross-border deals involving companies with presence all across the world—on these transactions, I work closely with our other Latham offices in Europe, Asia, and the Middle East (a huge benefit of working at a firm that has a global footprint). Our practice also advises clients across a broad range of industries, including life sciences, energy, communications, retail, technology, and industrials.
How did you choose this practice area?
Michèle: I started my career at Latham taking full advantage of our unassigned program. I gravitated toward transactional work, and worked in our project finance practice before moving to the banking practice after becoming a partner. I did both project finance work and leveraged finance work for several years, but when the leveraged finance market took off in the mid-2000s, I found I was spending most of my time in that area. I really love the fact that we work with a wide variety of companies in an array of industries, and have the chance to develop long-lasting relationships with our lender clients.
Jen: My journey to banking was a bit more direct than Michèle’s. I knew I wanted a transactional-based practice as soon as I discovered I did not care for my legal research and writing class in law school. My career began at another firm, where I dabbled in finance, M&A, investment funds, capital markets, and real estate, before ultimately settling on finance. I was drawn to finance because of the balance between the black letter law (i.e., the Uniform Commercial Code, which governs granting and perfecting security interests in collateral) and the more amorphous aspects of business negotiations.
What is a typical day like and/or what are some common tasks you perform?
Jen: While each day is different, what I can say is that I never spend a day just sitting down and drafting a contract for eight hours. We have a very interpersonal practice with many moving parts, so often, my days touch all of the different aspects of getting a deal across the finish line. For example, on a given day, I may conduct calls with clients to explain complex legal concepts, have a call with opposing counsel to negotiate provisions of the loan documents, sit down with junior associates to review their comments on a draft board resolution, and coordinate with other Latham specialist teams (such as tax) to address specialty aspects of a deal.
Michèle: And as you become more senior within the practice, your role transforms. Not only do we negotiate, draft documents, and provide legal advice, but we have to know the market and provide insight into trends that affect our clients. They make the business decisions, but it’s our responsibility to provide guidance as to risks and make sure we are properly reflecting the business deal. Serving as an expert becomes a significant part of the job as you progress through your career.
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
Jen: Because our deals involve dozens of different workstreams and constant coordination with other practice groups (such as M&A, tax, and capital markets), sharpening your attention to detail and organizational skills is paramount. Additionally, time management plays a critical role in defining a lawyer’s success in this practice area—the ability to prioritize and triage pays dividends. In terms of classes, I took a secured transactions course in law school that has been extremely helpful in my practice, but it is certainly not required and in general, I wouldn’t stress too much about classes you “should” take—you will learn everything you need to know on the job.
Michèle: I would recommend taking a bankruptcy class if it’s offered at your school, as having some understanding of what happens when deals fall apart will be useful to structuring them in the first place. But I wholeheartedly agree with Jen that you really don’t need any specific background or coursework under your belt to become a finance lawyer—between your day-to-day work, and the enormous amount of formal and informal trainings that Latham provides throughout your career, the firm will teach you everything you need to know to become a successful debt finance lawyer.
What do you like best about your practice area?
Michèle: Our work isn’t at all cookie cutter; we really do see new things every day. As finance lawyers, we sit in the middle of every deal and get to learn about so many different practice areas as we incorporate the advice of our colleagues in areas such as tax, benefits, environmental, real estate, regulatory, and so on. Our work is truly collaborative. If we have done our job well, both the lenders and the borrower are happy when the deal closes and want to transact together again.
Jen: My favorite thing about the practice is that being a lawyer is really only part of the job. We draft contracts and analyze the Uniform Commercial Code to grant security interests in the collateral, but we do much, much more than that. We are translators—helping to explain complex financial and legal concepts to our clients in a clear way, so that they understand the real-world implications thereof. We are project managers—coordinating with specialist teams, local counsel in non-U.S. jurisdictions, and others to ensure that the dozens of workstreams that need to be completed in order to close a deal are all finished on time. And in some sense, we are therapists—we work on fast-paced matters with high stakes, and it is our job to reassure our clients that they are in good hands and that we take control of the matter to ensure it closes on their expected timeline.
What misconceptions exist about your practice area?
Jen: Probably the biggest misconception is that you need specific training or a background in finance to get started in our practice. Most of the attorneys in our practice have no prior experience with finance or business at all; their backgrounds range from political science to psychology to education to public relations, and these diverse experiences ultimately contribute to an overall better, smarter, and more well-rounded finance team. So long as you have the desire to learn negotiating skills and commit to constantly improving your reading, writing, and drafting skills, you can find success here at Latham.
What are some typical tasks that a junior lawyer would perform in this practice area?
Jen: We take pride in providing associates with very substantive opportunities early in their careers. A junior lawyer could expect an array of responsibilities, ranging from drafting board resolutions approving financing transactions, to conducting a call with a CFO to walk through disclosure schedules, to participating in negotiations on the loan documents themselves, to managing and overseeing non-U.S. counsel and specialist teams.
Michèle: We are not a hierarchal practice—we don’t believe that only senior associates, counsel, or partners should do the more interesting work. I always suggest to our junior lawyers that they learn the fundamentals, and that they also consistently ask to do more. Show enthusiasm for due diligence and disclosure schedules, and soon you’ll be asked to take the pen on ancillary documents. The responsibility builds on itself, so there’s no limit to what junior lawyers can do in our practice. We work hard to involve our attorneys on all aspects of a transaction, so that all members of the team understand the big picture.
How do you see this practice area evolving in the future?
Michèle: Over the course of 30 years, I’ve learned time and time again that the debt markets are resilient. There will be ups and downs, but companies always need financing.
Moving forward, we are likely to see more competition between the syndicated and direct lending markets. And, as competition yields innovation, we are likely to see new products and tricks of the trade develop over time.