The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
Michelle Chen is a partner in Sullivan & Cromwell’s Financial Services group, with a broad regulatory and transactional practice. She advises financial institutions on a range of U.S. bank regulatory matters, as well as climate and other ESG matters. She also regularly advises on mergers and acquisitions and capital markets transactions involving financial institutions. In addition, she is active in the firm’s investment management practice, with a primary focus on advising business development companies in connection with Investment Company Act matters, as well as capital raising and strategic transactions.
Ms. Chen has been recognized by prominent legal business media such as Law360 and The National Law Journal for her work. She received her J.D. from Columbia Law School and graduated from Duke University with a B.A. and a B.S.
Describe your practice area and what it entails.
As a partner in the firm’s Financial Services group, I advise U.S. and non-U.S. financial institutions on a variety of matters. These include U.S. bank regulatory matters relating to permissible activities, investments, applications, and the regulation of non-U.S. banking organizations in the United States. I also regularly advise on public and private company mergers and acquisitions transactions involving financial institutions. In addition, I advise U.S. and non-U.S. financial institutions on climate-related and other ESG matters.
What types of clients do you represent?
S&C’s Financial Services group works with clients around the world on a wide spectrum of matters involving U.S. bank regulations and transactions involving banking organizations that operate in the United States. Over the course of my career, I have represented financial services firms of all sizes, including both U.S. and non-U.S. banking organizations, investment banks, insurance companies, asset managers, fintech companies, and a number of financial services industry trade groups.
What types of cases/deals do you work on?
The majority of my recent work focuses on complex, interdisciplinary M&A transactions with a bank regulatory overlay. Some representative transactions include advising Japan-based Mitsubishi UFJ Financial Group in the sale of its U.S. core regional bank business to U.S. Bancorp, which was the second-largest announced bank M&A deal in 2021 and closed in December 2022. The sale allows MUFG to shift focus to its retail banking business in Japan and Asia, while continuing its wholesale corporate and investment banking franchise in the United States. I also advised M&T Bank in its $8.3 billion acquisition of People's United Financial, which closed in April 2022, creating a leading diversified, community-focused commercial bank with approximately $200 billion in assets and a network of branches spanning 12 states. Over the past few years, I also advised Capital One in the reorganization of its U.S. banking business, including the merger of its two national bank subsidiaries, which closed in October 2022. In addition, I advised Fiserv in its $22 billion acquisition of payment processor First Data in 2019, which was, at the time of its announcement, the largest U.S. financial services deal since the 2007-2008 financial crisis.
How did you choose this practice area?
While in college, I interned as an investment banking analyst on Wall Street and was fortunate to have the opportunity to participate in a number of significant transactions that were complex and involved financial institutions. Although I was working as an investment bank analyst, I was most interested in the structuring and regulatory aspects of the transactions. In light of that experience, I decided to enroll in law school. I started law school in 2009, shortly after the financial crisis and right as Congress was developing the legislation that became the Dodd-Frank Act, the law that overhauled financial regulation in the aftermath of the 2007-2008 financial crisis. At the time, financial services regulatory reform was, like today in some ways, a front-page topic. I then started practicing at the height of activity relating to Dodd-Frank Act implementation and had the opportunity from the start of my career to work on new and developing areas of financial regulation. I was drawn to S&C due to its generalist approach and leading financial services practice. Focusing on transactions and regulatory matters involving financial services firms was a natural fit.
What is a typical day like and/or what are some common tasks you perform?
A typical day involves five things. First, discussions and emails with clients. The correspondence typically focuses on active matters, but I also try to stay connected with clients about the issues they are focused on more generally. Second, working with other S&C team members for any particular matter. I think one of the most important responsibilities of any lawyer is to mentor and guide the more-junior members of the team. Guidance and leadership, particularly at the partner level, is essential to both delivering the best service to our clients and supporting the development of other lawyers. Third, consultation with others at S&C. A culture of consultation is a defining aspect of S&C. It has been ingrained from my first day here. I regularly consult with others at the firm, and I always treat consultations with my colleagues as a priority. Fourth, analyzing legal issues and drafting or reviewing contracts, formal memos, or other written analyses of legal issues. Fifth, keeping up with recent developments, including reading newspapers or S&C’s client memos and other publications to keep track of regulatory developments. A typical day also involves assessing, prioritizing, and re-prioritizing the tasks at hand so that I can be as responsive as I can, depending on the situation and our clients’ need.
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
I don’t think there are any classes that someone “must” take to work in this area because so much depends on learning on the job. That said, foundational classes on matters such as financial services regulation, corporations, and securities regulation can provide a valuable introduction to core principles important to the financial services practice area. I would also recommend taking workshops taught by practitioners, which can provide a sense of what it’s really like to practice. More important than taking any particular class, however, I would focus on developing two critical skills. First, the ability to describe and analyze complex matters clearly and concisely orally and in writing, which is invaluable in advising clients, in advocating for clients, and in negotiating with counterparties. Second, the ability to self-educate. Market dynamics are constantly evolving, as are regulatory frameworks. A lawyer with a financial services regulatory and transactional practice must be able to keep up with an ever-changing landscape.
What do you like best about your practice area?
There is one thing that stands out: the boundaries are very broad and constantly evolving. The Financial Services group at S&C is unique as it’s a group that focuses holistically on the issues relevant to a particular industry. The group collectively and lawyers in the group individually have the ability to advise on regulatory matters and transactional matters, public company and corporate governance matters, and, of course, multidisciplinary matters that span all these areas. I personally have the opportunity to work on many transactional matters with a regulatory overlay, such as bank M&A transactions, as well as entirely regulatory matters, ranging from advising U.S. and non-U.S. banks on compliance with the U.S. bank regulatory framework to assisting trade associations in their advocacy in connection with newly proposed rules. Being a member of the Financial Services group requires a broad set of skills and the ability to adapt as new issues emerge, which really exemplifies S&C’s generalist model.
How do you see this practice area evolving in the future?
I expect my practice area to continue to evolve significantly. For example, in recent years, I’ve become more active in our practice advising financial institutions on climate and other ESG issues, a practice area that has grown exponentially in the last few years. In March 2022, the SEC issued an expansive climate-related disclosure proposal that, if adopted as proposed, would have significant implications for public companies, including financial institutions. In addition, U.S. federal and state banking and insurance regulators have proposed guidance on the management of climate-related financial risks for their regulated institutions. Foreign legislation and rules issued or proposed by foreign regulators may also affect U.S. financial institutions with international operations. These recent developments, among others, combined with an increasing focus by investors, political leaders, and regulators on ESG matters, mean that this practice area will undoubtedly continue to evolve in the coming years.
What kinds of experience can summer associates gain at this practice area at your firm?
We encourage our summer associates to dive into the work right away, and we have designed our program to mirror the associate experience as closely as possible. The experience our summer associates gain in the Financial Services group can vary quite a bit because of the breadth of our practice. For bank regulatory matters, a typical assignment includes legal research, which may require looking into the legislative or regulatory history of a statute or regulation going back many decades. For an M&A matter, the tasks typically involve conducting legal due diligence of the counterparty (such as reviewing public disclosure documents, corporate records, and material contracts) and preparing deal documents and issues lists. On the advocacy side, tasks may involve reviewing regulatory proposals and assisting with drafting comment letters. All summer associates have dedicated partner and associate advisors who are responsible for incorporating them into their matters so that the summer associates are also able to shadow senior lawyers and observe their work throughout the summer program.
How do you prepare for a negotiation?
I do three main things. First, I try to think holistically about the most critical business and legal issues for all parties involved. This allows me to focus on the highest priority items of my client during the negotiation. Next, I try to identify where our arguments and negotiating positions are the weakest and develop the best strategies in response. Finally, I consider the culture of each party. Clients want a lawyer who can speak for them, in line with their culture, and do so effectively across any counterparty. It’s essential to understand what will resonate with the client and be effective with any particular counterparty.