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The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.

James M. McDonald is a litigation partner and a member of Sullivan & Cromwell’s Securities & Commodities Investigations practice and its Commodities, Futures and Derivatives group. His practice focuses on advising clients on regulatory enforcement matters, white collar criminal matters, and internal investigations, as well as on regulatory and corporate governance matters related to the securities and commodities laws.

Mr. McDonald previously served as Director of Enforcement at the U.S. Commodity Futures Trading Commission. Prior to joining the CFTC, he served as an Assistant United States Attorney in the Southern District of New York. Mr. McDonald served as a law clerk to John G. Roberts, Jr., Chief Justice of the United States, and Jeffrey S. Sutton, Jr., Judge on the United States Court of Appeals for the Sixth Circuit, and as a Deputy Associate Counsel in the Office of the White House Counsel under President George W. Bush. Mr. McDonald received his J.D. from the University of Virginia School of Law and graduated from Harvard University with a A.B.

Describe your practice area and what it entails.

Broadly speaking, I have a white collar practice, which means I advise clients on government enforcement matters and internal investigations, especially those involving securities and commodities.

What types of clients do you represent?

My clients range from market innovators offering new financial products to established financial institutions. Most of my client engagements are confidential, but my public representations include helping BlockFi, Allianz, and Polymarket reach resolutions with government authorities. I am currently advising FTX in its dealings with various government authorities.

What types of cases/deals do you work on?

Part of my practice focuses on compliance, as I help clients understand the financial regulatory system and set up protocols for staying within the rules. When issues or questions from regulators arise, I often communicate with the government and help the client find a resolution. This year, for example, I was part of a team that helped BlockFi reach a resolution with the SEC and state regulators that enabled it to announce plans to register an interest-bearing crypto account as a security, which would have been the first of its kind. (Unfortunately, the company filed for Chapter 11 during a downturn in the crypto market before that happened.) I was also part of the team that helped Allianz and its subsidiary, Allianz Global Investors U.S., resolve parallel DOJ and SEC investigations arising from the collapse of certain hedge funds at the start of the pandemic.

How did you choose this practice area?

One of the things that has been really important in my career is the group of mentors that I’ve had. These mentors have been people I knew from my law school alumni network, professors at law school, and judges that I clerked for. As I started to get into private practice, I really started to develop the kinds of relationships that helped me narrow my interests and match them to those that would work within the firm. These mentors helped me understand what a white collar practice looked like, and I realized it’s something I really enjoy. It offers a chance to help clients through their most difficult and significant problems, and I think rewards creative thinking about ways to achieve strategic solutions that might not be apparent on first glance. A big part of my experience here at Sullivan & Cromwell has been working with other lawyers who have helped me develop my practice, and we recognize how important this is in both directions. We want to make sure that summer and junior associates have real, meaningful opportunities to grow not only as lawyers, but also as people.

What is a typical day like and/or what are some common tasks you perform?

There really is no typical day, which is why S&C and this practice are great. I spend a lot of time interfacing with clients and dealing with the government in enforcement matters. One of the things I like most about my practice is working with others within the firm to come up with creative strategies and approaches to find solutions. Everyone on the team recognizes that there’s no monopoly on good ideas. They don’t only come from the senior level, they come from everywhere. I like to brainstorm all the possible ways that we might be able to secure a victory for the client, whether this be through litigating the matter, through trying to preserve some other aspect of its business impacted by government investigations, or through achieving regulatory solutions. I spend a lot of time really trying to understand the client’s business and come up with creative strategies to achieve a successful result, which I think is one of the parts of the job that I enjoy the most.

What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?

It depends on whether we’re talking about law students, junior associates, or folks at the more senior associate level who are thinking about focusing on different aspects of their own practice. No matter where you are in your career, there is a great benefit to being proactive, which starts with trying to get exposure to a number of different types of experiences. In law school, I suggest taking a wide variety of classes with different types of professors and getting involved with different types of groups. For white collar in particular, prosecutorial clinics and defense clinics could be helpful. Try a mix between black-letter law classes and clinic-type classes. I tried to get as much exposure as I could, which then helped me identify areas where my interests aligned with the different opportunities that were available to me. I don’t think that there is a single path that works for everybody, but I do think that getting exposed to as many experiences as one can is a pretty good start.

What do you like best about your practice area?

What I like most about my practice is the interdisciplinary nature of it. The expectation is that across the firm, we’ll be working with different disciplines and with different lawyers who have different areas of expertise, but we’ll also be building our own generalist foundation from which we can draw upon for the particular matters that we’re handling. Criminal defense investigation is a practice that is really trans-substantive. The expectation is that you’ll be able to handle whatever kind of matter comes up.

But you’re never doing it all yourself. You’re supported by a team of other experts at the firm who will contribute to tackling whatever problem is raised by a particular case, whether they are securities lawyers or IP lawyers. I think one of S&C’s strengths is our ability to draw from different disciplines and across practice groups. Whichever direction the case goes, we have a team that will find the avenue to maximize the prospects of a positive resolution.

What kinds of experience can summer associates gain at this practice area at your firm?

There is a lot of really good experience that summer associates can get, particularly in the area of criminal defense. For example, a case representing an individual in a criminal investigation will tend to be a smaller, more leanly staffed matter. In a case like that, summer associates can come in and do real, substantive work right away, having direct interaction with clients and handling particular areas of the case. At S&C, we’re expecting summer associates to do associate-level work. We think about the work that needs to get done and see who has the time and interest, so work is just as likely to go to a summer associate as a full-time associate. S&C is really focused on building the next generation of leaders at the firm and we know that doesn’t just happen, it’s something that requires really careful cultivation.

What are some typical career paths for lawyers in this practice area?

I think that there can be a sense that the only viable path is to go into government first, followed by entering private practice. That has been my path—I have a background both as an AUSA in the Southern District of New York and then running enforcement at the CFTC before joining S&C—but it’s definitely not the only one. At S&C, there is a mix of folks who were in government and joined the firm, people who had a range of experiences within the firm and ultimately focused on criminal defense and regulatory enforcement, people who have experience on the defense and prosecutorial side, etc. I think this is one of S&C’s strengths. The firm recognizes that there are a number of different paths that anyone can take, which helps us to ensure a balanced, thoughtful approach to the issues we face.

How important is prior criminal law experience (e.g., working for the Prosecutor’s office or DA) in paving a successful career in white collar defense?

I think it’s important, but it isn’t the only path necessary for a successful career in white collar defense. There’s not a single path for success at the firm; there is a real emphasis on flexibility. I think the expectation for whichever path you go down is that you form a broad enough foundation so that you can draw from that background and work within the generalist structure of the firm, even if your area is presenting itself in what may first appear to be a specialized field, like criminal defense or regulatory enforcement.