The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
Krist Werling represents private equity and strategic investors in a wide variety of transactional matters in the healthcare and life sciences industry. In this capacity, he works with cross-disciplinary teams to conduct legal due diligence and execute acquisitions and divestitures, as well as provide ongoing legal services to portfolio companies. Clients look to Krist for his ability to lead teams of lawyers that develop creative transaction structures that enable deals to close. Krist is a co-head of the Firm’s Private Equity practice group and serves on the firm’s Management Committee. He was recently recognized by Crain’s Chicago Business as a Notable Gen X Leader in Law, 2021. He graduated magna cum laude from University of Illinois College of Law and holds an M.B.A. from Northwestern University’s J.L. Kellogg School of Management.
Nora Klein focuses her practice on representing private equity and strategic investors in a wide variety of transactional matters in the healthcare and industrial industries. While in law school, Nora was a research assistant for distinguished Professor Patricia O’Hara. Nora was a member of the University of Illinois women’s golf team, where she was a three-time Academic All-American and the 2011 Illinois State Amateur Champion. She graduated cum laude from University of Notre Dame Law School.
Describe your practice area and what it entails.
Krist: I represent private equity investors that are making investments in the healthcare and life sciences industry.
Nora: My practice area is mostly private equity work focused in the healthcare space, and I also get to handle strategic and family office work.
What types of clients do you represent?
Krist: Both Nora and I primarily work with private equity funds. When a private equity fund acquires a healthcare company, we also get to work directly with the healthcare company’s CEO and management team to help them grow. That involves handling add-on acquisitions and facilitating the purchase of other smaller companies, and we also function as outside general counsel, helping them solve any number of legal challenges. We form close relationships with these portfolio company management teams to support them in achieving their goals, and both of us enjoy those relationships and that aspect of the work.
What types of cases/deals do you work on?
Nora: As just one example of how we cover portfolio clients to help them after our private equity fund clients acquire them, when I was a first-year associate, Krist brought me in to work on matters for Pinnacle Dermatology, a female-founded dermatology practice with a majority female executive team. The company is owned by a private equity fund called Chicago Pacific Founders, which is also majority female.
Over the past four years, we’ve handled more than 35 acquisitions for them. Seeing the overall company profitability skyrocket has been incredible to watch, and it’s even more special to see it done by a majority female company in a male-dominated space.
When I began this work as a first-year associate, candidly, I had no idea what I was doing. Krist served as an unbelievable mentor in guiding me. Over time, and through his mentorship, I was regularly talking to the CEO and founder of a large and growing business one year out of law school, which is unusual.
Krist: At some firms, you work on one big deal after another, but you end up lacking the breadth of experience that we’re able to give our associates here. Nora and our associates who track these portfolio companies gain insights into a variety of legal areas—from employment to tax, benefits, general litigation, white collar investigations, and more. Because our private equity fund clients are interested in the outcomes for these portfolio companies, we stay involved. We rely on our associates to develop close relationships with our portfolio company management teams.
How did you choose this practice area?
Krist: When I started, my practice was general corporate law. I was attracted to the application of corporate law to the healthcare industry because I knew I could add value for clients. Being able to walk them through the industry structures and regulations they have to deal with on a day-to-day basis makes me a more valuable lawyer to them, so I’ve been able to build a robust practice in the space. I also enjoy the complexity of the industry structures, public policy and regulatory elements of healthcare law.
Nora: I always knew I wanted to do transactional work, and McDermott was a good fit for me. Healthcare is experiencing explosive growth as an industry, and to be able to understand a referral issue, Stark issue or Anti-Kickback issue and apply that knowledge in a transaction is critical and a value-add to the client. There’s a long-term opportunity for me to grow in that space. I also love the positive nature of transactions. At the end of the day, people are selling businesses they’ve worked hard on, and it’s a big moment in their lives. To be part of that is amazing.
What is a typical day like and/or what are some common tasks you perform?
Krist: Initially you start to get assignments and get on deals. Then the typical day becomes “man your phone.” You might know, for example, that you have to handle diligence on a transaction and develop a deal document, but in between, you’re answering calls, texts and emails from clients. It’s very exciting, because every day is different and you’re constantly learning. Our associates get more diverse experience that prepares them to serve in a variety of roles outside the law firm; we really see that our role as partners is to provide them the acceleration for their career that they are looking for. Aside from deal mechanics, Nora might have to draft an indemnification demand letter or an incentive plan termination letter, or translate complex tax language into layman’s terms for a CFO who has a tax question. She also sees what works and what doesn’t for a company from a business perspective. Our associates are more prepared to serve as in-house general counsel or in a private equity role in the future.
Nora: It’s not boring. I have friends at other large firms who essentially handle fund-to fund-deals, negotiating the same things over and over as one of 10 associates on the deal. We have smaller teams here, so you get to be more hands-on with practical legal considerations. I think I’ve become a better lawyer, in a shorter period of time, than I might have at another firm.
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
Krist: I always recommend taking tax classes and developing your tax skills, along with learning some basics of accounting. If you want to do anything transactional, healthcare or not, general tax knowledge is a huge benefit. I went back to school for an M.B.A., which is not something everyone needs to do, but a greater understanding of accounting, which is the language of business, is important.
Nora: As a law student, to the extent you can, take classes at your university’s business school. If you can speak the “language” of the business world, clients will have more confidence in you. They want to believe they have the best lawyer in the space, and that includes understanding what they’re talking about when they use terms like “EBITDA” and “delta.”
What do you like best about your practice area?
Krist: I love being someone’s go-to lawyer and trusted advisor. When clients call me with a problem, I understand what they’re dealing with and can help them navigate the issue based on my or one of my partners’ knowledge. That gets me out of bed in the morning. I know my clients’ industry backward and forward, I know the industry structures and what their peers are doing to succeed, and I like helping them achieve their goals.
Nora: People come to us because they’re trying to grow their businesses and wealth, and in our case in the healthcare space, they’re also working toward delivering high-quality healthcare to people across the U.S. That’s very rewarding.
What is unique about your practice area at your firm?
Nora: The healthcare knowledge and skill at McDermott is second to none.
Krist: We have such strong healthcare and tax practices that when a client calls me with a challenging question, I can tap into a group of hundreds of experienced and top-ranked lawyers to deliver an answer to that question within an hour.
What are some typical tasks that a junior lawyer would perform in this practice area?
Nora: At McDermott, you actually get to do substantive work as a junior lawyer and even as a summer associate. Add-on deals tend to be smaller in terms of purchase price, so you can get younger people involved. Typical tasks involve communicating with the client, understanding what their needs are, drafting various transactions documents, understanding what you’re drafting, and then negotiating those points with opposing counsel.
How do you see this practice area evolving in the future?
Krist: Technology will have a greater impact on the healthcare industry over the next decade. I think we’ll see more technology deals in healthcare as the digital health market expands. Companies will also begin to experience privacy issues with greater frequency; there are an increasing number of data breaches, and you can’t get insurance as easily. From my perspective, I think these issues will present an interesting challenge, and technology-related deals will give us more opportunities to collaborate with our IP and cybersecurity colleagues.