Why Private Equity?

[Jaysen]

A recent Legal Week article asks a variety of senior associates and newly-made partners "Why private equity" and "What advice do you have for those hoping to make partner?". Thought I'd share what they said -- if you're applying to law firms with a big private equity client base, you'll often be asked this question at interview. It may also help you to explain why you are interested in other practice areas.

Carlos Gil Rivas: "I’ve always enjoyed the approach taken by financial sponsors to M&A, as well as the management team dynamic in transactions. In this pretty intensive environment you can build great rapport with small deal teams who can make decisions quickly, know their way around M&A better than you and rely on leveraging their advisers’ resources and expertise. In addition, it’s rewarding being part of transactions that represent significant life events for some of the individuals involved."

Daniel Borg: "It’s a great backstage pass. We see investments all the way from inception and structuring through to exit, and become trusted advisers to both our private equity sponsor clients and the management teams of their portfolio companies. It is also exciting to play a proactive role in the progression of sponsor-friendly terms that clear in the European debt markets."

Anela Musat: "Private equity clients are a smart, sophisticated, demanding and sometimes fickle bunch. Reaction times are fast, stakes are high and relationships are pretty easy to make or break on a whim, without the constraints of a legal panel. My advice is to build empathy, make sure you understand your clients’ business and the drivers behind an investment decision, and learn how to navigate boardroom politics and cultural differences. But there is one thing I found works universally well – when wining and dining clients, wait for coffee to talk business."

Peter Lewis: "A little bit of luck – as a first-seat trainee at Linklaters my principal was Richard Youle, a great private equity lawyer and a great mentor – and a little bit of judgement. I came into law to work on deals, and early on I recognised the opportunities for young lawyers to develop quickly doing lots of deals with seasoned PE dealmakers. It’s fast-paced and varied, and gives you the chance to build long-term collaborations with clients and their portfolio companies – it’s a fantastic environment to work in."

Will Aitken-Davis: "I enjoy the pace of the transactions and working with highly sophisticated clients. This means that you can focus on the points that matter and get deals done efficiently. Because sponsors are repeat transactors, you can also work closely with them on a consistent basis, which gives you the opportunity to build deep relationships."

Alastair Brown: "It’s the nature of the clients and the deals. Private equity is a dynamic market, filled with very intelligent, driven professionals, both from the client and legal side. It is both interesting and challenging to be able to work across lots of different sectors. It was really that excitement, competitive aspect and the challenge that drew me to private equity."

John Newton: "My involvement on a high-profile PE transaction from diligence to completion in my first seat as a trainee defined the course of my career. The high-stakes, public profile, fast pace, pressure and feeling of achievement – I was hooked."

Richard Jones: "As an M&A lawyer, private equity clients provide the most incredible opportunities – their entire business is doing M&A, they’re young and dynamic organisations, they thrive on complexity, they allow you to build relationships with the most senior decision-makers and, if you are doing it right, they place huge amounts of trust in you to deliver transactions for them."

Max Oppenheimer: "The variety that private equity offers is unparalleled and the execution speed that transactions often demand is both challenging and exciting in equal measures. One week you are advising a client on a minority investment in a fintech business and the next week (or the same day) you can be launching a takeover offer for a regulated business. We act for a large number of sponsors who look at assets across a broad range of sectors so you need to be able to quickly understand how a business operates, where the key risks may arise and how you are going to protect your client’s interests and achieve their commercial aims. There is never a dull day."

Owen Lysak: "As an advisory lawyer, I find the real challenge and enjoyment comes from the intellectual pressure of dealing with complex structuring and regulatory questions within a transaction timetable and setting. Private equity presents that opportunity to combine intellectual challenge with the demands of a deal, as well as contributing to the broader development of a business."

Ian Keefe: "Private equity is a small world and personal relationships can be important. It’s not about being super confident or extrovert, but you’re never too junior to start building your own network. If you work with someone on a deal, keep in touch – you never know when you’ll come across them in the future."

 

[Naomi]

I thought this was such an interesting article when I read it yesterday! And came at a great time, as I'm applying to firms with a strong PE focus. Thanks for summarising and sharing

Are firms likely to ask very technical questions on private equity? Being a lawyer in this area appeals because PE firms are so entrepreneurial and dynamic, but are firms expecting aspiring trainees in this area to be highly mathematically minded too?

 

[George Rowe]

Thanks for sharing Jaysen! Apart from Kirkland, Weil and Simpson Thacher, are there any other law firms that heavily focus on PE work?

 

[Daniel Boden]

Thanks for sharing Jaysen! Apart from Kirkland, Weil and Simpson Thacher, are there any other law firms that heavily focus on PE work?

I would say Freshfields, Latham & Watkins and Clifford Chance all have very good private equity practices (all are ranked band 1 by chambers and partners for high end private equity)

 

[Salma]

I would say Freshfields, Latham & Watkins and Clifford Chance all have very good private equity practices (all are ranked band 1 by chambers and partners for high end private equity)

And White & Case!

 

[Daniel Boden]

And White & Case!

Indeed, knew there was one I'd forgotten haha

 

[Jaysen]

I thought this was such an interesting article when I read it yesterday! And came at a great time, as I'm applying to firms with a strong PE focus. Thanks for summarising and sharing

Are firms likely to ask very technical questions on private equity? Being a lawyer in this area appeals because PE firms are so entrepreneurial and dynamic, but are firms expecting aspiring trainees in this area to be highly mathematically minded too?

No they won't be too technical or mathematical. If you're applying to PE-focused firms, you should be able to explain what private equity is and the basics of what private equity firms do. They may push you more if you demonstrate a good basic understanding of private equity but that's about it.

 

[Naomi]

No they won't be too technical or mathematical. If you're applying to PE-focused firms, you should be able to explain what private equity is and the basics of what private equity firms do. They may push you more if you demonstrate a good basic understanding of private equity but that's about it.

Ok great, very doable. Thank you

 

[J Wu]

Went to a presentation evening at Kirkland yesterday and the corporate partner who delivered a session on private equity (PE) made a few very interesting points that I thought I'd share.

- PE plays a notable role in shaping many of the businesses involved in our daily lives, both at home and in the wider world. Many well-known brands and businesses (e.g. Canada Goose, Pret a Manger, Slug & Lettuce, Odeon, Tommy Hilfiger) are all PE-backed. PE's influence also extends into many unseen areas, such as within the development of new technologies that form parts of innovative technologies and products we will see in the future.

- PE transactions are incredibly complex and PE firms often have a very lean staffing model, which foregrounds the importance of law firms as their advisers throughout the PE life cycle from cradle to grave.

- Regarding sponsor-side clients, PE transactions are their bread and butter; it is what they do everyday. This allows for repeat business from these clients and creates a consistent revenue stream for law firms who will have a good level of deal flow and, given the complexity of PE which requires many practice areas (corporate, debt finance, restructuring, real estate, tax - the list goes on), this deal flow provides opportunities across many practice areas.

- Drawing on his own experience, something he found fulfilling about private equity was helping businesses and their owners through a developmental and transformational journey, where he was involved in the day-to-day transformation process and not just the headline parts. (He also mentions many of qualities discussed in the Legal Week article).

These are just some points I found particularly interesting, but I'd be keen to hear about what other people think!