Making Partner as a Debt Finance Lawyer Forum

[Anonymous User]

I'm a midlevel debt finance associate at a V50 firm in NYC. I know most would say it's too early to decide, but I'm fairly certain I want to make a run at making partner in a few years. I'm wondering if I would have a better shot at making partner if I were to lateral.

The debt finance practice at my firm is solid, but we're not one of those "band [x]" finance practices and I'd say 85% of our work is borrower-side acquisition financing for our M&A deals; we're essentially a service team for our corporate group. Most of our partners are service partners who don't really have their own clients.

I don't really have evidence to back this up, but my sense is that making partner in a service group like the one I'm in is probably pretty difficult as compared to a lender-side practice in a "premier" finance group where there seems to be much more opportunity for business development.

Would love to hear others' thoughts on this. Given the hot lateral market right now, I'm wondering if it makes sense for me to lateral to a firm that views their finance practice as more of a revenue generator than a service group.

[Anonymous User]

Anon because this would out me. I'm at a V5 in a similar practice -- absent being a lender-side lawyer (which, for direct deals still makes us reliant on various corporate-side relationships at a firm), you are a service partner in a sense that you are reliant on the good graces of the corporate partner who is entrusting the client to you. For any kind of financing, there is someone else who has the real corporate relationship that is entrusting it to you. A formative portion of your career is building the relationship with the corporate guys to that end.

For the majority of the beginning of your career, what I just described will be the case -- you won't really have your own clients. If you break out and become a genuine rockstar, someone who has the right combination of intelligence, bedside manner, speed and luck, you will eventually acquire your own clients in that the client that you service will view you as the contact, even if the main relationship leaves the firm for some reason. Same thing can happen with restructuring/workout clients but at that point the client is likely looking at a handful of firms to do that kind of work.

I know that here on TLS everyone says it has shitty exit ops but I've really only seen good ops from my colleagues -- people go inhouse to banks, to investment/high-tier legal positions with funds (private credit, distressed/opportunistic credit and private equity), to senior cap market roles at pubcos/strategics or to partner at other firms.

All of this to say -- you should lateral if it makes sense, what you're describing is a consistent experience for the practice.

[Anonymous User]

Anon because this would out me. I'm at a V5 in a similar practice -- absent being a lender-side lawyer (which, for direct deals still makes us reliant on various corporate-side relationships at a firm), you are a service partner in a sense that you are reliant on the good graces of the corporate partner who is entrusting the client to you. For any kind of financing, there is someone else who has the real corporate relationship that is entrusting it to you. A formative portion of your career is building the relationship with the corporate guys to that end.

For the majority of the beginning of your career, what I just described will be the case -- you won't really have your own clients. If you break out and become a genuine rockstar, someone who has the right combination of intelligence, bedside manner, speed and luck, you will eventually acquire your own clients in that the client that you service will view you as the contact, even if the main relationship leaves the firm for some reason. Same thing can happen with restructuring/workout clients but at that point the client is likely looking at a handful of firms to do that kind of work.

I know that here on TLS everyone says it has shitty exit ops but I've really only seen good ops from my colleagues -- people go inhouse to banks, to investment/high-tier legal positions with funds (private credit, distressed/opportunistic credit and private equity), to senior cap market roles at pubcos/strategics or to partner at other firms.

All of this to say -- you should lateral if it makes sense, what you're describing is a consistent experience for the practice.

OP here. Thanks for this; very helpful. But jw, what are your thoughts on a lender-side practice? Wouldn't these practice groups be less reliant on corporate-side relationships? I'm more so talking about the lender-side practices that represent the major banks.. e.g., BofA, JPM, Citi, BOM, etc.

[Anonymous User]

I was a debt finance lawyer in a top NY firm for 3 years before switching to M&A cause I hated it the more senior I got. Finance is "service-level" pretty much everywhere. Borrower-side is dependent on relationships of corporate partners with private equity funds (though some finance partners have direct relationships with private credit shops, which is an interesting area that a few firms are very good in). Financing ultimately will never be the main driver of extremely profitable corporate work for a firm and will require you to have extremely strong relationships with banks (if lender side) and M&A partners/PE firms (if borrower side).

If I was in finance and liked the work, I'd try to lateral into a Project Finance role. I think this work is the most interesting and will be the best for making partner the next few years. Lots of smaller funds being created to take advantage of the renewables initiatives being created at the state level and money is cheap and flowing heavily into this space. Doing PF and getting some exposure to tax equity, EPC/PPA agreements, etc. will be extremely valuable.

[Anonymous User]

I was a debt finance lawyer in a top NY firm for 3 years before switching to M&A cause I hated it the more senior I got. Finance is "service-level" pretty much everywhere. Borrower-side is dependent on relationships of corporate partners with private equity funds (though some finance partners have direct relationships with private credit shops, which is an interesting area that a few firms are very good in). Financing ultimately will never be the main driver of extremely profitable corporate work for a firm and will require you to have extremely strong relationships with banks (if lender side) and M&A partners/PE firms (if borrower side).

If I was in finance and liked the work, I'd try to lateral into a Project Finance role. I think this work is the most interesting and will be the best for making partner the next few years. Lots of smaller funds being created to take advantage of the renewables initiatives being created at the state level and money is cheap and flowing heavily into this space. Doing PF and getting some exposure to tax equity, EPC/PPA agreements, etc. will be extremely valuable.

PF attorney here. It's interesting right now and curious on people's take regarding partnership prospective.

PF definitely is not "service level" nor dependent on corporate partners. We have our own independent practice/clients that drive the deals. However, traditionally, lender/sponsor work in the fossil fuels space has been the largest money-makers for the premier PF practices.

Renewables work doesn't bring in as much money as the traditional clients for law firms. They don't have the appetite for large legal bills and have been working with smaller/European law firms with lower billings for a long time. I'm sure things will change to a degree as the renewable space continues to get more profitable, but it's possible there's a lot of renewable work to be done without it being profitable enough for the megafirms to promote associates to equity partners in that space. Could see a lot of associates who would have become equity partners if oil was still a thing get deferred to counsel or income partner due to shift to renewables.

On the other hand, the regulatory/environmental/governmental landscape is primed for a massive explosion in projects/infrastructure. M&A activity continues to grow in this sector with PE funds buying private energy projects, and a lot of days I feel like more of an M&A associate than a PF associate.

The exit opportunities for experienced PF associates are pretty fantastic within banks, PE funds, developers and government. Basically, there's a paradigm shift going on in the industry, and I'm not sure where it'll land us PF associates.

[Anonymous User]

I was a debt finance lawyer in a top NY firm for 3 years before switching to M&A cause I hated it the more senior I got. Finance is "service-level" pretty much everywhere. Borrower-side is dependent on relationships of corporate partners with private equity funds (though some finance partners have direct relationships with private credit shops, which is an interesting area that a few firms are very good in). Financing ultimately will never be the main driver of extremely profitable corporate work for a firm and will require you to have extremely strong relationships with banks (if lender side) and M&A partners/PE firms (if borrower side).

If I was in finance and liked the work, I'd try to lateral into a Project Finance role. I think this work is the most interesting and will be the best for making partner the next few years. Lots of smaller funds being created to take advantage of the renewables initiatives being created at the state level and money is cheap and flowing heavily into this space. Doing PF and getting some exposure to tax equity, EPC/PPA agreements, etc. will be extremely valuable.

Lender work can be lucrative in the M&A space if you work with middle market private credit lenders.