The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
For more than a decade, Elizabeth Hermann Smith has counseled lenders in many areas of leveraged finance, representing a broad range of lending clients including private credit funds, finance companies, business development companies, asset managers and banks serving as administrative agents, collateral agents, lead arrangers, and lenders in a variety of debt finance transactions. Elizabeth focuses her work on senior secured cash flow transactions but has also worked in asset-based lending and mezzanine finance. Her experience spans a wide array of industries, with a particular emphasis on healthcare lending and franchise finance. She works with her clients to help strike the right balance between protecting their interests and remaining practical and efficient, and she prides herself on her ability to be flexible and to work with those across the aisle to find a solution.
Describe your practice area and what it entails.
My practice is focused in private credit, primarily representing lenders in senior secured cash flow transactions, mostly providing acquisition finance in leveraged buyouts in both sponsor and non-sponsor deals.
What types of clients do you represent?
Mostly asset managers and alternative investment management firms, as well as some banks. I also have the occasional borrower client.
What types of cases/deals do you work on?
I primarily work on senior secured cash flow middle-market transactions typically part of a leveraged buyout.
How did you choose this practice area?
I really didn’t choose it; I found my way to it. When I was a summer associate, I tried as many different practice areas as I could and was able to determine that litigation was not for me and that I was meant to be a transactional attorney. At the firm’s various social events, I also found that I ended up clicking with a number of the people who were in what was, at the time, called the commercial finance group (subsequently renamed private credit).
What is a “typical” day like and/or what are some common activities in your day-to-day work?
A typical day involves a lot of emails, a lot of calls, drafting credit agreements, reviewing and commenting on documents—including both new documents being negotiated and existing loan documents—to answer client questions about what the company can or can’t do. I also usually spend some time answering questions from associates about how to handle certain aspects of the transactions they’re working on.
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
The real training for it will all be on-the-job. So I would say people should take what interests them in law school and then buckle down and be students as their career gets started. Take every opportunity to learn when you start your job. Ask about sitting in on calls, even if you think they’re above your head. Take notes, ask questions, and look things up.
What is the most challenging aspect of practicing in this area?
I think the sheer unpredictability can be challenging. Some-times things come up without warning but are needed quite quickly, or a deadline might be set and then continually be pushed back. It can be difficult at times, but you learn how to triage your work and how to lean on your teammates so that you can still make it to important life events despite a busy workload.
What do you like best about your practice area?
While there are aspects of one transaction to the next that might be the same, I really enjoy the differences. I like the structural nuances and learning what dictates a different outcome than the norm. I really enjoy when the business people on a transaction come up with something unique and we have to boil it down to its essence, think through all of the potential outcomes and all of the areas it hits a document, and craft something to make it work.
What is unique about your practice area at your firm?
That one deal to the next is cookie cutter and that drafting a credit agreement from a form or a precedent is a simple fill-in-the-blanks exercise.
What are some typical tasks that a junior lawyer would perform in this practice area?
Maintaining the closing checklist, reviewing and commenting on (or drafting if on the borrower side) certificates, resolutions, and schedules; preparing signature pages; and inventorying documents. Focusing on these aspects of the transaction and getting comfortable with the overall structure and process help to provide a backbone of support against which associates can learn and develop substantively over time.