Debt finance/LevFi/Banking Outlook Forum

[existentialcrisis]

Don’t know why it’s hilarious that some ppl want and expect to prioritize their career. The way I see it, if you’re angling for an exit sooner than a failure to attain partnership then big law was the wrong choice. But, I guess macro point taken, that practice is a diff beast

Look, I’ ll try to be less condescending because I truly want you to think about this.

Do you have any idea what the average attrition is like at big law firms? I’d say the overwhelming majority is voluntary.

Maybe you think almost all big law associates made the wrong choice… I might even agree with you.

But knowing what law firm life is like, it seems incredibly foolhardy not to think about what your practice group choice will set you up for after should you decide that the grind ends up being too much, like nearly everyone else does.

I mean I feel like it a combination. I’m amazed at the number of associates who went into big law blind to what it is or rather unaware of how groups fit into exits. Hard to tell how much of attrition is truly those who wanted to grind it out.

The second thing is though, even if you decide law firm life is too much but are unwilling to give up that level of comp, doesnt a banking/finance group lend to those exits. Like you’re not getting the cushy gc role but are getting a little more intense role at a bank/fund (hopefully) that also pays more. I knows it’s less than big law but on the higher end of exits

I can’t tell if you’re OP?

If you are: Attrition I believe is roughly 15-20 percent each year. I’m not sure why you’d assume that most of them didn’t know what they were signing up for? If you want an in house job, putting in your time/learning skills at a firm first is pretty much the only way to get one.

On your second question, I don’t think credit is one of the better options for high paying exits. You’d be better off doing M&A or securities (or even tech transactions).

A lot of in house bank roles aren’t particularly high paying but seem ok lifestyle wise. Going in house at a fund is not a super common exit from a finance practice.

Is this accurate? My impression of finance was exits were narrow, but somewhat more lucrative in return for worse hours.

Also how is finance wrt deal flow, notwithstanding everyone being high hours wise rn? Have heard it’s pretty steady and not as many fire drills as compared to M&A.

Mid-level finance associate at V5 here, but have also done M&A. Kind of hard to compare workloads honestly.

M&A has significantly more fire-drills/unpredictability. You're more likely to get unexpected/surprise weekend work, but the work is "easier", especially at the junior levels. Doing diligence for 10 hours straight or sitting on a diligence call for 3 hours straight isn't fun, but it's not taxing.

Spending 6 hours drafting term sheets, commitment papers, financing docs, etc. is draining. Doing that on Saturday mornings and getting on with clients to go over issues lists is very tiring. Finance gets easier the more senior you get tho because you become very well aware of all the issues and what's going on quickly. Corp work gets harder the more senior you get and you still get to have all those suprise, firedrills. Although, you get a huge team as M&A is better staffed than finance which is always thinly staffed.

Finance is a volume business - it's about liquidity (turning deals quickly, getting in/out and paid quickly so you can keep the lights on for other groups). Speeds the name of the game. M&A is a big-ticket business - it's about getting as many billables on a matter as humanly possible for big payout at the end. Accuracy and perfection is the name of the game. Think about what that means for lifestyle, timelines and your pref working environment.

For exit opps, ideal exit range for finance is years 5-7. For M&A years 3-5. Comp is too variable to compare, but I disagree that general roles pay better than big banks. They can have equity components which may end up netting you more money. You won't get equity from bank unless it's in form of bonus paid in bank stock (which would suck).

Depending on your firm though, it seems like a lot of the “improved” predicability vs corporate is the near certainty that you’re getting papers in on Friday afternoon.

I guess I’ll walk back the comp point a bit other than to say, based on anecdotal data to be fair, that I don’t think the roles the average credit associate is exiting to at a bank are particularly high or low paying as far as in house roles go. I certainly wouldn’t describe a finance practice as the best way to land a high paying in house gig.

[Anonymous User]

Is it a consensus view that finance is generally one of the easier/better areas to make partner in?

[Anonymous User]

Is it a consensus view that finance is generally one of the easier/better areas to make partner in?

Uhhh...if you can survive, at my firm at least, you're going to make partner. If you can survive...

[Anonymous User]

Repeated.

[Anonymous User]

Repeated.

[Anonymous User]

Mid-level finance associate at V5 here, but have also done M&A. Kind of hard to compare workloads honestly.

M&A has significantly more fire-drills/unpredictability. You're more likely to get unexpected/surprise weekend work, but the work is "easier", especially at the junior levels. Doing diligence for 10 hours straight or sitting on a diligence call for 3 hours straight isn't fun, but it's not taxing.

Spending 6 hours drafting term sheets, commitment papers, financing docs, etc. is draining. Doing that on Saturday mornings and getting on with clients to go over issues lists is very tiring. Finance gets easier the more senior you get tho because you become very well aware of all the issues and what's going on quickly. Corp work gets harder the more senior you get and you still get to have all those suprise, firedrills. Although, you get a huge team as M&A is better staffed than finance which is always thinly staffed.

Finance is a volume business - it's about liquidity (turning deals quickly, getting in/out and paid quickly so you can keep the lights on for other groups). Speeds the name of the game. M&A is a big-ticket business - it's about getting as many billables on a matter as humanly possible for big payout at the end. Accuracy and perfection is the name of the game. Think about what that means for lifestyle, timelines and your pref working environment.

For exit opps, ideal exit range for finance is years 5-7. For M&A years 3-5. Comp is too variable to compare, but I disagree that general roles pay better than big banks. They can have equity components which may end up netting you more money. You won't get equity from bank unless it's in form of bonus paid in bank stock (which would suck).

Depending on your firm though, it seems like a lot of the “improved” predicability vs corporate is the near certainty that you’re getting papers in on Friday afternoon.

I guess I’ll walk back the comp point a bit other than to say, based on anecdotal data to be fair, that I don’t think the roles the average credit associate is exiting to at a bank are particularly high or low paying as far as in house roles go. I certainly wouldn’t describe a finance practice as the best way to land a high paying in house gig.
[/quote][/quote]

I've done screeners for in-house roles at bulge bracket NY banks out of curiosity, and I've always been told my all in comp with no equity would be minimum $250k (which was my target number). Not sure what m&a folks at my level are getting tbh, but I always thought that was pretty good for inhouse. Unless they were planning on pulling the rug under me later, I'd be extremely happy (and bored) with a 8am-7pm bank role that paid me $250k/year.

[Anonymous User]

Mid-level finance associate at V5 here, but have also done M&A. Kind of hard to compare workloads honestly.

M&A has significantly more fire-drills/unpredictability. You're more likely to get unexpected/surprise weekend work, but the work is "easier", especially at the junior levels. Doing diligence for 10 hours straight or sitting on a diligence call for 3 hours straight isn't fun, but it's not taxing.

Spending 6 hours drafting term sheets, commitment papers, financing docs, etc. is draining. Doing that on Saturday mornings and getting on with clients to go over issues lists is very tiring. Finance gets easier the more senior you get tho because you become very well aware of all the issues and what's going on quickly. Corp work gets harder the more senior you get and you still get to have all those suprise, firedrills. Although, you get a huge team as M&A is better staffed than finance which is always thinly staffed.

Finance is a volume business - it's about liquidity (turning deals quickly, getting in/out and paid quickly so you can keep the lights on for other groups). Speeds the name of the game. M&A is a big-ticket business - it's about getting as many billables on a matter as humanly possible for big payout at the end. Accuracy and perfection is the name of the game. Think about what that means for lifestyle, timelines and your pref working environment.

For exit opps, ideal exit range for finance is years 5-7. For M&A years 3-5. Comp is too variable to compare, but I disagree that general roles pay better than big banks. They can have equity components which may end up netting you more money. You won't get equity from bank unless it's in form of bonus paid in bank stock (which would suck).

Depending on your firm though, it seems like a lot of the “improved” predicability vs corporate is the near certainty that you’re getting papers in on Friday afternoon.

I guess I’ll walk back the comp point a bit other than to say, based on anecdotal data to be fair, that I don’t think the roles the average credit associate is exiting to at a bank are particularly high or low paying as far as in house roles go. I certainly wouldn’t describe a finance practice as the best way to land a high paying in house gig.

I've done screeners for in-house roles at bulge bracket NY banks out of curiosity, and I've always been told my all in comp with no equity would be minimum $250k (which was my target number). Not sure what m&a folks at my level are getting tbh, but I always thought that was pretty good for inhouse. Unless they were planning on pulling the rug under me later, I'd be extremely happy (and bored) with a 8am-7pm bank role that paid me $250k/year.

[Anonymous User]

Mid-level finance associate at V5 here, but have also done M&A. Kind of hard to compare workloads honestly.

M&A has significantly more fire-drills/unpredictability. You're more likely to get unexpected/surprise weekend work, but the work is "easier", especially at the junior levels. Doing diligence for 10 hours straight or sitting on a diligence call for 3 hours straight isn't fun, but it's not taxing.

Spending 6 hours drafting term sheets, commitment papers, financing docs, etc. is draining. Doing that on Saturday mornings and getting on with clients to go over issues lists is very tiring. Finance gets easier the more senior you get tho because you become very well aware of all the issues and what's going on quickly. Corp work gets harder the more senior you get and you still get to have all those suprise, firedrills. Although, you get a huge team as M&A is better staffed than finance which is always thinly staffed.

Finance is a volume business - it's about liquidity (turning deals quickly, getting in/out and paid quickly so you can keep the lights on for other groups). Speeds the name of the game. M&A is a big-ticket business - it's about getting as many billables on a matter as humanly possible for big payout at the end. Accuracy and perfection is the name of the game. Think about what that means for lifestyle, timelines and your pref working environment.

For exit opps, ideal exit range for finance is years 5-7. For M&A years 3-5. Comp is too variable to compare, but I disagree that general roles pay better than big banks. They can have equity components which may end up netting you more money. You won't get equity from bank unless it's in form of bonus paid in bank stock (which would suck).

Depending on your firm though, it seems like a lot of the “improved” predicability vs corporate is the near certainty that you’re getting papers in on Friday afternoon.

I guess I’ll walk back the comp point a bit other than to say, based on anecdotal data to be fair, that I don’t think the roles the average credit associate is exiting to at a bank are particularly high or low paying as far as in house roles go. I certainly wouldn’t describe a finance practice as the best way to land a high paying in house gig.

I've done screeners for in-house roles at bulge bracket NY banks out of curiosity, and I've always been told my all in comp with no equity would be minimum $250k (which was my target number). Not sure what m&a folks at my level are getting tbh, but I always thought that was pretty good for inhouse. Unless they were planning on pulling the rug under me later, I'd be extremely happy (and bored) with a 8am-7pm bank role that paid me $250k/year.

Is that in house role solely doing legal work or are you getting any business side opportunities with potential carry later on? Or at least a shot to work into that side of things. I've heard conflicting stories about finance group prospects re non-legal exits.

[Anonymous User]

Some finance work really does suck. I specialize in a type with no commitment papers though, and generally very predictable deal flow and documents. It’s boring but generally not very taxing, although COVID has upped the intensity somewhat.

[Anonymous User]

Some finance work really does suck. I specialize in a type with no commitment papers though, and generally very predictable deal flow and documents. It’s boring but generally not very taxing, although COVID has upped the intensity somewhat.

Which group?

[Anonymous User]

Is it a consensus view that finance is generally one of the easier/better areas to make partner in?

Uhhh...if you can survive, at my firm at least, you're going to make partner. If you can survive...

So iow it's the same as other groups?

[Anonymous User]

Mid-level finance associate at V5 here, but have also done M&A. Kind of hard to compare workloads honestly.

M&A has significantly more fire-drills/unpredictability. You're more likely to get unexpected/surprise weekend work, but the work is "easier", especially at the junior levels. Doing diligence for 10 hours straight or sitting on a diligence call for 3 hours straight isn't fun, but it's not taxing.

Spending 6 hours drafting term sheets, commitment papers, financing docs, etc. is draining. Doing that on Saturday mornings and getting on with clients to go over issues lists is very tiring. Finance gets easier the more senior you get tho because you become very well aware of all the issues and what's going on quickly. Corp work gets harder the more senior you get and you still get to have all those suprise, firedrills. Although, you get a huge team as M&A is better staffed than finance which is always thinly staffed.

Finance is a volume business - it's about liquidity (turning deals quickly, getting in/out and paid quickly so you can keep the lights on for other groups). Speeds the name of the game. M&A is a big-ticket business - it's about getting as many billables on a matter as humanly possible for big payout at the end. Accuracy and perfection is the name of the game. Think about what that means for lifestyle, timelines and your pref working environment.

For exit opps, ideal exit range for finance is years 5-7. For M&A years 3-5. Comp is too variable to compare, but I disagree that general roles pay better than big banks. They can have equity components which may end up netting you more money. You won't get equity from bank unless it's in form of bonus paid in bank stock (which would suck).

Depending on your firm though, it seems like a lot of the “improved” predicability vs corporate is the near certainty that you’re getting papers in on Friday afternoon.

I guess I’ll walk back the comp point a bit other than to say, based on anecdotal data to be fair, that I don’t think the roles the average credit associate is exiting to at a bank are particularly high or low paying as far as in house roles go. I certainly wouldn’t describe a finance practice as the best way to land a high paying in house gig.

I've done screeners for in-house roles at bulge bracket NY banks out of curiosity, and I've always been told my all in comp with no equity would be minimum $250k (which was my target number). Not sure what m&a folks at my level are getting tbh, but I always thought that was pretty good for inhouse. Unless they were planning on pulling the rug under me later, I'd be extremely happy (and bored) with a 8am-7pm bank role that paid me $250k/year.

Is that in house role solely doing legal work or are you getting any business side opportunities with potential carry later on? Or at least a shot to work into that side of things. I've heard conflicting stories about finance group prospects re non-legal exits.

These were solely legal roles at bulge bracket banks (no carry).

I've only heard of 1 person getting an offer with carry for a PE fund, but maybe it's possible if you get your foot in the door and prove you're worth it. I wouldn't expect it though. You don't start getting carry until VP+ level at most PE shops, and I don't know how you as a lawyer could possibly have more value-add than someone who's fairly high up on the business side.

I don't do VC finance work, maybe it's different there. I think if you're trying to hit it big through equity, you probably wanna do EC/VC work and go to a startup as their GC. It'll cost you upfront in base pay for several years though.

[Anonymous User]

Is it a consensus view that finance is generally one of the easier/better areas to make partner in?

Uhhh...if you can survive, at my firm at least, you're going to make partner. If you can survive...

So iow it's the same as other groups?

I thought that it’s actually really competitive in groups like M&A and less about surviving. Can anyone speak more to long term partnership prospects in v10 finance groups?

[Anonymous User]

As a first year currently doing mostly debt work, this thread worries me...I find the work interesting and I'm learning a lot, but the lack of exit opportunities scares me. I feel as though I may need to pivot

[Anonymous User]

As a first year currently doing mostly debt work, this thread worries me...I find the work interesting and I'm learning a lot, but the lack of exit opportunities scares me. I feel as though I may need to pivot

Similarly, I'm an incoming first-year considering committing to a debt group. But don't know if that's wise... However, the shot at partnership by merely sticking around + it being countercyclical makes me think it's as good a choice as any?

Basically is choosing debt finance dumb if I have other options?

[Anonymous User]

Some finance work really does suck. I specialize in a type with no commitment papers though, and generally very predictable deal flow and documents. It’s boring but generally not very taxing, although COVID has upped the intensity somewhat.

Which group?

I do fund finance work. It’s a bit of a stretch to say there are “no” commitment papers but generally there will just be a term sheet and borrower’s counsel only comes in after that has been signed, or at most the client will ask us to mark up one term sheet once. Likewise you don’t deal with asshole M&A bros (the funds group at least at my firm is much more chill and easy to work with) and the deals are less complicated because there’s only one type of collateral and you don’t have to fuck around with IP, mortgages, stock certificates/powers, local counsel in random US states that don’t understand what’s going on, there’s very rarely two types of debt so virtually no intercreditor stuff, etc. it’s 1000% times better than doing acquisition finance which is what I was doing before.

[Anonymous User]

I do fund finance too and think it is the nearest finance comes to a "lifestyle group". Would recommend.

[Anonymous User]

Can anyone speak to debt finance specifically?

[Anonymous User]

Can anyone speak to debt finance specifically?

Also interested, but more curious how much more unpredictable leveraged finance is compared to M&A. Is it a consensus that the group is a nightmare?

[Anonymous User]

I do fund finance work. It’s a bit of a stretch to say there are “no” commitment papers but generally there will just be a term sheet and borrower’s counsel only comes in after that has been signed, or at most the client will ask us to mark up one term sheet once. Likewise you don’t deal with asshole M&A bros (the funds group at least at my firm is much more chill and easy to work with) and the deals are less complicated because there’s only one type of collateral and you don’t have to fuck around with IP, mortgages, stock certificates/powers, local counsel in random US states that don’t understand what’s going on, there’s very rarely two types of debt so virtually no intercreditor stuff, etc. it’s 1000% times better than doing acquisition finance which is what I was doing before.

I do a mix of fund finance and direct lending/acquisition financing - I would say some of the more complicated fund structures/tax and ERISA requests in fund finance can cause you to pull your hair out but but otherwise the work is pretty consistent in substance and you often only deal with Cayman foreign counsel.

I actually don't think most of acquisition finance is materially more difficult than fund finance (sans intercreditors which I haven't really touched as a mid/senior) and the timelines seem only a tad more extreme -- in my experience the acquisition is almost always going to be the gating item so clients aren't really pushing you but that means that 100% of the time, closing cannot be delayed because of your firm. Non-acquisition direct lending is a bit worse since the finance lawyers are often the only gating item to closing.

Leveraged finance seems the worst lifestyle wise prior to papers being signed but not so bad afterwards since banks typically aren't ready to close for a few weeks.

[Anonymous User]

I do fund finance work. It’s a bit of a stretch to say there are “no” commitment papers but generally there will just be a term sheet and borrower’s counsel only comes in after that has been signed, or at most the client will ask us to mark up one term sheet once. Likewise you don’t deal with asshole M&A bros (the funds group at least at my firm is much more chill and easy to work with) and the deals are less complicated because there’s only one type of collateral and you don’t have to fuck around with IP, mortgages, stock certificates/powers, local counsel in random US states that don’t understand what’s going on, there’s very rarely two types of debt so virtually no intercreditor stuff, etc. it’s 1000% times better than doing acquisition finance which is what I was doing before.

I do a mix of fund finance and direct lending/acquisition financing - I would say some of the more complicated fund structures/tax and ERISA requests in fund finance can cause you to pull your hair out but but otherwise the work is pretty consistent in substance and you often only deal with Cayman foreign counsel.

I actually don't think most of acquisition finance is materially more difficult than fund finance (sans intercreditors which I haven't really touched as a mid/senior) and the timelines seem only a tad more extreme -- in my experience the acquisition is almost always going to be the gating item so clients aren't really pushing you but that means that 100% of the time, closing cannot be delayed because of your firm. Non-acquisition direct lending is a bit worse since the finance lawyers are often the only gating item to closing.

Leveraged finance seems the worst lifestyle wise prior to papers being signed but not so bad afterwards since banks typically aren't ready to close for a few weeks.

Does this take on levfi apply to both lender and sponsor side work?

[cheeseballs]

I am currently a mid-level in a finance group at a a V25*. My group focuses on direct lending and restructurings, so weekends are not regularly destroyed by papers. I do not think I would still be around in a lev-fin focused practice.

Most recent exits include a pivot to ECVC and a couple folks moving in-house at funds. The in-house moves happened at year 6+, so later than what I see in general corporate and capital markets.

*Send me a message if you’re interested; we’re hiring and the group is not a toxic place.

[Anonymous User]

I am currently a mid-level in a finance group at a a V25*. My group focuses on direct lending and restructurings, so weekends are not regularly destroyed by papers. I do not think I would still be around in a lev-fin focused practice.

Most recent exits include a pivot to ECVC and a couple folks moving in-house at funds. The in-house moves happened at year 6+, so later than what I see in general corporate and capital markets.

*Send me a message if you’re interested; we’re hiring and the group is not a toxic place.

Would you be able to elaborate more on why lev fin is so bad?

[Buglaw]

I am currently a mid-level in a finance group at a a V25*. My group focuses on direct lending and restructurings, so weekends are not regularly destroyed by papers. I do not think I would still be around in a lev-fin focused practice.

Most recent exits include a pivot to ECVC and a couple folks moving in-house at funds. The in-house moves happened at year 6+, so later than what I see in general corporate and capital markets.

*Send me a message if you’re interested; we’re hiring and the group is not a toxic place.

Would you be able to elaborate more on why lev fin is so bad?

Commitment papers. The best ones are awful to be on. The worst ones are worse than anything I've done in M&A. Sometimes you need to turn a 100 page plus set of commitment papers in 24-48 hours (issues list, call with client, checking precedent marking up the document, etc.). The commitment papers are just as dense as a credit agreement. So it's basically reviewing, marking up and turning an entire credit agreement in 1-2 days. It's crazy.

[Lesion of Doom]

I am currently a mid-level in a finance group at a a V25*. My group focuses on direct lending and restructurings, so weekends are not regularly destroyed by papers. I do not think I would still be around in a lev-fin focused practice.

Most recent exits include a pivot to ECVC and a couple folks moving in-house at funds. The in-house moves happened at year 6+, so later than what I see in general corporate and capital markets.

*Send me a message if you’re interested; we’re hiring and the group is not a toxic place.

Would you be able to elaborate more on why lev fin is so bad?

Commitment papers. The best ones are awful to be on. The worst ones are worse than anything I've done in M&A. Sometimes you need to turn a 100 page plus set of commitment papers in 24-48 hours (issues list, call with client, checking precedent marking up the document, etc.). The commitment papers are just as dense as a credit agreement. So it's basically reviewing, marking up and turning an entire credit agreement in 1-2 days. It's crazy.

Plus as a junior, the joys of weekend-destroying diligence in addition to coordinating signing with a lot of panicked people. As such, you have one frenetic period with signing followed by the actual documentation leading to only a marginally less stressful closing. Each deal potentially induces severe stress at two different points.

I will say you learn a fuck ton, and fast. My practice definitely is more sophisticated than my M&A colleagues at the same stage. We don't talk about it, but they know it's true. Still, though, I look forward to a debt-free day when I can plan weekends again. It's not worth it to me in the long run.