The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
Alexandra Kaplan is a member of Simpson Thacher’s New Partners Committee, served as Co-Chair of the firm’s Finance Committee and is a partner in the Banking and Credit practice, where she focuses on syndicated financings, with an emphasis on leveraged financing. Alexandra has significant experience representing investment banks and financial institutions in leveraged and investment-grade senior credit facilities, subordinated bridge loans and asset-based credit facilities; she has also represented financial institutions in the restructuring of existing credit facilities and other related financings. A contributing dditor of “Getting the Deal Through: Acquisition Finance,” Alexandra recently advised the lead arrangers in: $1.75 billion of senior secured credit facilities for DT Midstream in connection with its spin-off from DTE Energy; $17.5 billion of senior credit facilities for General Motors Company; and $2.226 billion of financing for Michaels Stores, Inc. She received her B.A. from the University of Pennsylvania and J.D. from Columbia Law School.
Dorothy Hector is an associate in the Banking and Credit practice, where she advises both lenders and borrowers. She recently represented private equity sponsors in several acquisition financings, including the $3.3 billion financing of EQT’s acquisition of First Student and First Transit. Dorothy graduated from Georgetown University and received her law degree from Harvard, cum laude, in 2017.
Describe your practice area and what it entails.
Alexandra: Simpson Thacher’s Banking and Credit Group advises banks, financial institutions, corporate borrowers, and private equity sponsors on a wide range of corporate financings. Unlike most law firms, we advise both lenders and borrowers, which is very helpful in terms of associate training and development. Our associates develop an excellent understanding of
the market, and of the concerns and issues on both sides of a transaction. As you become more senior, you tend to focus on one side or the other, and I primarily handle lender-side transactions.
Dorothy: I’m a fifth-year associate, and I continue to advise both lenders and borrowers. My deals also run the gamut and include commercial loans, acquisition financings, and restructurings. Simpson’s depth on both sides of credit deals has helped me obtain a 360-degree understanding of the transactions in this space.
What types of clients do you represent?
Alexandra: I frequently work with large financial institutions, including JPMorgan Chase, Bank of America, Barclays, Credit Suisse and Jeffries.
Dorothy: My lender-side work has been primarily for JPMorgan Chase, and on the borrower’s side, I’ve worked with Silver Lake, Goldman Sachs, Hellman & Friedman, Blackstone and Stonepeak, as well as with various portfolio companies of these clients.
What types of cases/deals do you work on?
Alexandra: My work is quite varied and includes acquisition financings, restructurings (transactions in connection with a bankruptcy or other distressed situation), exit financings (financings that take place when the borrower emerges from bankruptcy), as well as more “ordinary course” transactions that address a corporation’s everyday liquidity needs.
Dorothy: This past year, I advised on several acquisition financings from both the borrower and lender sides, and also advised on a bankruptcy-related restructuring; restructurings took place with greater frequency during the pandemic. I also regularly work with portfolio companies of PE sponsors, which I really enjoy. Portfolio companies sometimes have less experience with complex loan agreements, and it’s enormously rewarding to walk our client through a complicated loan document, explain how the agreement works, and help them grow with the facility.
How did you choose this practice area?
Dorothy: My path to credit was somewhat serendipitous. When I started as an associate, I was fairly certain I’d do M&A, as I’d done a large M&A deal as a summer associate that I really enjoyed. Knowing that I’d eventually end up in M&A, I picked capital markets as my first corporate rotation—but then I loved that group so much I almost didn’t want to rotate. I chose credit as my second rotation because I thought it would be most helpful for my eventual capital markets work; there is a fair amount of overlap in terms of covenants in the documents, and the two practice groups often work closely together. But when I got to credit, I discovered that it was the best fit of all! The focus in Banking and Credit is on technical drafting, and that’s my favorite aspect of practicing.
Alexandra: I was a summer associate and an associate at the firm. As Dorothy mentioned, we have a rotational system for associates, and I worked in M&A, Capital Markets and Banking and Credit as a junior associate. I especially liked my work in Banking and Credit because I found that I got more substantive work earlier on, and I enjoyed a high level of client contact. Our deals tend to be staffed relatively leanly and will often consist of a partner and an associate or two. I also found it to be the most collaborative group in terms of the relationship among the parties to the transaction. Our agreements last for several years and banking clients therefore have ongoing, long-term relationships with the borrowers, which creates a less adversarial dynamic and makes the day-to-day work experience very appealing to me. The timeline of credit transactions is typically pretty short, which I also like. On any given facility, we typically have short, intense bursts of deal activity followed by longer periods of intermittent related work that is less time-consuming; this makes for a varied workload and also keeps things interesting on the personnel front because our teams change with each new deal. At the same time, our deals often live on for several years, allowing us to build relationships with the transaction teams both internally and externally as issues arise and as the transaction is amended or refinanced over time.
What is a typical day like and/or what are some common tasks you perform?
Dorothy: One of the things I like most is that I never really know how my day will unfold. I generally cross two items off my “to-do” list and add three. As Alexandra mentioned, our transaction timelines are quite short, and as a result our work tends to be fast paced. I spend a lot of time on emails with clients; I regularly prepare “issues lists” for clients concerning our drafts or revisions, and this helps guide our discussion. I also spend a lot of time drafting, and I now regularly work with junior associates, supervising their various workstreams and making sure the deal is moving forward smoothly and efficiently.
Alexandra: What your day looks like also depends on your level of experience. As a partner, I always have lots of phone calls and emails with clients, advising on questions that arise and brainstorming solutions. But I continue to spend time with the documents, reviewing and revising agreements and spotting issues for discussion and negotiation. I work very closely with associates, reviewing their work product and analyzing issues together.
What training, classes, experience or skills development would you recommend to someone who wishes to enter your practice area?
Alexandra: Contracts, Secured Transactions and Bankruptcy are helpful but not required. I didn’t take Secured Transactions or Bankruptcy, so it’s not a bar that can’t be overcome! Understanding accounting and financial statements is also helpful, but again isn’t necessary. You will learn what you need to know on the job. In terms of skills, I’d say issue-spotting and attention to detail are quite important. The documents we work with are complicated and the contractual provisions interact with one another, so it’s essential to be thoughtful about the ramifications of changing any single provision or clause. Working with credit agreements is like working on a complex puzzle, so someone who likes that type of intellectual challenge would enjoy this part of the job. Creative thinking is also helpful and a fun part of the job. And people skills are important; we work with clients all the time and collaborate with the other side.
Dorothy: The skills and knowledge I use in my job I learned at Simpson. Our firm offers in-depth training and will teach you everything you need to know, so nothing that you learn or don’t learn in law school will prevent you from practicing in our group. Senior associates and partners also take mentoring and training very seriously, and always take the time to offer explanations and background information to junior associates. This is a huge benefit not only to the junior lawyer but also to the team as whole, as the more the junior lawyer understands about a deal, the more engaged she’ll be, the better she’ll see how her task fits within the larger picture, and the more valuable work she’ll do. People here recognize that training and teaching aren’t just a nice thing to do, they make people better lawyers and make the team more productive.
What do you like best about your practice area?
Alexandra: I enjoy the collaborative nature of our job. I also really enjoy tackling the complicated issues that often arise—for example, trying to find ways to make new transactions work within the confines of existing restrictive agreements. I find that the most fulfilling part of the job. In addition, we have great clients and there is real collegiality both internally and externally, which makes every day an enjoyable experience.
Dorothy: I also love that our deals are never routine. Each transaction is unique, with different client goals and challenges. The financings we guide help companies grow and it’s exciting to assist in that process.
What is unique about your practice area at your firm?
Alexandra: The fact that we have such a strong practice on both the lender and borrower sides makes Simpson unique. For associates, this is extraordinarily beneficial in terms of skill development, and helps you become a much better lawyer in the long run.
What are some typical tasks that a junior lawyer would perform in this practice area?
Dorothy: In Banking and Credit, juniors are very helpful on a deal. Because our deals are staffed relatively leanly, junior associates take on substantive tasks and develop a close relationship with the more senior associate and partner quickly. Juniors typically draft the documents for closing, and are often the “point person” in terms of client coordination. Junior associates also often take charge of obtaining or requesting information in the schedules concerning the borrower’s business; it’s a great learning experience and provides an opportunity for the junior associate to take ownership of a process and learn how to negotiate with the other side in a way that is effective and professional.
What are some typical career paths for lawyers in this practice area?
Dorothy: I’ve been told that some of the best drafters are credit lawyers; our primary focus is on getting the document exactly right. People might say a typical career path is to work for a bank or a private equity shop, but I have friends who’ve left credit work and now have general in-house jobs.
Alexandra: I agree; the experience you gain in our department qualifies associates for a broad range of career opportunities. Over the years, I’ve seen some pursue careers in finance and others pivot to any number of legal and business-side roles.