Restructuring exit ops? Forum

[Anonymous User]

Thinking about going to K&E or Weil and I'm wondering if Rx has decent exit ops? My ideal exit is either a fund (PE, KE definitely the move) or in-house at company XYZ. Are these at all possible from Rx, or do they have related exits?

Thanks!

[Anonymous User]

Not to hijack OP’s thread, but same question coming from the creditor side, i.e., DPW/PW. (I have a little bit of IB/finance experience pre-law school if that makes any difference.)

Curious about exits and the length of time — 3, 4, 5 years? — you need to put in before those exits open up.

[Anonymous User]

From Rx, there are a few exit ops.

First, you can always go into the bankruptcy practice of another firm. More commonly, people seem to move from debtor-side shops to creditor-side shops (i.e., Weil/KE --> DPW/PW/Milbank, etc.). If you're looking to transition out of law entirely, some people end up in restructuring investment banking -- basically, advising the deal on the finance side rather than the legal side. It's not an easy transition to make but it has been done. Weil and Kirkland have some people who have gone to Lazard, and I'm sure there are others. Some Rx lawyers probably also go into Rx consulting (e.g., Alvarez & Marsal, FTI, AlixPartners), but I don't know anyone personally who has done that and doubt that would be better than law (consultants, I believe, are kind of at the bottom of the restructuring totem pole).

Perhaps the most coveted exit option would be to go into distressed debt investing at a hedge fund or PE firm. That is a highly sought after exit opportunity for bankruptcy lawyers because the lifestyle is way better and the potential is there for much higher compensation (though that is far from guaranteed). It is rare but it does happen. I have seen people do it with as little as 2-4 years of experience while others have done it after 10. Probably depends a lot on your experience, reputation, previous finance experience (if any), and the market.

For those jobs, people sometimes end up in pure legal roles at funds (a desk lawyer who reviews docs and helps advise the investment analysts) while some end up in finance roles or roles that combine the two. It's not the kind of exit opportunity you want to pin your career dreams on b/c it is so rare, but it is a thing that some people do.

I have no idea if Rx is good for generic in-house options. Seems like it wouldn't be because it's such a niche practice and companies don't really need in-house bankruptcy lawyers, but I really don't know.

[Anonymous User]

Not to hijack OP’s thread, but same question coming from the creditor side, i.e., DPW/PW. (I have a little bit of IB/finance experience pre-law school if that makes any difference.)

Curious about exits and the length of time — 3, 4, 5 years? — you need to put in before those exits open up.

Anon at DPW/PW.

Creditor exits: RX IB, buy-side (desk lawyer or investor, desk lawyer more likely), RX "analyst" (reorg, etc).

Debtor exits: RX IB, RX consultant (A&M, FTI, etc), in-house at emerged debtor (pretty common!).

I have seen some people (esp. debtor people) have good success with the generic in-house stuff. It's a pretty easy pitch - lots of commercial judgment, mix of lit and transactional experience, etc - though many will be super turned-off by the mere idea of a bankruptcy attorney. Once you jump that hurdle, you're a solid candidate.

[ChickenSalad]

Not to hijack OP’s thread, but same question coming from the creditor side, i.e., DPW/PW. (I have a little bit of IB/finance experience pre-law school if that makes any difference.)

Curious about exits and the length of time — 3, 4, 5 years? — you need to put in before those exits open up.

Anon at DPW/PW.

Creditor exits: RX IB, buy-side (desk lawyer or investor, desk lawyer more likely), RX "analyst" (reorg, etc).

Debtor exits: RX IB, RX consultant (A&M, FTI, etc), in-house at emerged debtor (pretty common!).

I have seen some people (esp. debtor people) have good success with the generic in-house stuff. It's a pretty easy pitch - lots of commercial judgment, mix of lit and transactional experience, etc - though many will be super turned-off by the mere idea of a bankruptcy attorney. Once you jump that hurdle, you're a solid candidate.

Yeah this is basically spot on with what Ive seen.

[Anonymous User]

Quoted anon.
1.) If you have some IB experience, you might be able to lateral ASAP to a RX role at an IB. (I know a PW RX 1st year lateraled to PWP). If that's what you want to do, you may as well do it.
2.) I don't think the desk lawyer thing is super rare for 4th year+. Just make friends with the associates at the fund / bank. At some point they'll start blowing up your phone with little questions, etc, it's very nice for them to have a good relationship with a rx lawyer because they have absolutely no idea what's going on. (Get good at credit covenants and explaining things to non-lawyers ASAP).
3.) If you don't suck, your firm will want to place you with a client and will likely have the relationship to do it. (Firms are dying to second, too -- very logical/common exit).
4.) It's a really small community. Making friends (and impressing people) really pays off; everyone knows everyone and - generally, because people keep seeing each other - people are civil.

[Anonymous User]

From Rx, there are a few exit ops.

First, you can always go into the bankruptcy practice of another firm. More commonly, people seem to move from debtor-side shops to creditor-side shops (i.e., Weil/KE --> DPW/PW/Milbank, etc.). If you're looking to transition out of law entirely, some people end up in restructuring investment banking -- basically, advising the deal on the finance side rather than the legal side. It's not an easy transition to make but it has been done. Weil and Kirkland have some people who have gone to Lazard, and I'm sure there are others. Some Rx lawyers probably also go into Rx consulting (e.g., Alvarez & Marsal, FTI, AlixPartners), but I don't know anyone personally who has done that and doubt that would be better than law (consultants, I believe, are kind of at the bottom of the restructuring totem pole).

Perhaps the most coveted exit option would be to go into distressed debt investing at a hedge fund or PE firm. That is a highly sought after exit opportunity for bankruptcy lawyers because the lifestyle is way better and the potential is there for much higher compensation (though that is far from guaranteed). It is rare but it does happen. I have seen people do it with as little as 2-4 years of experience while others have done it after 10. Probably depends a lot on your experience, reputation, previous finance experience (if any), and the market.

For those jobs, people sometimes end up in pure legal roles at funds (a desk lawyer who reviews docs and helps advise the investment analysts) while some end up in finance roles or roles that combine the two. It's not the kind of exit opportunity you want to pin your career dreams on b/c it is so rare, but it is a thing that some people do.

I have no idea if Rx is good for generic in-house options. Seems like it wouldn't be because it's such a niche practice and companies don't really need in-house bankruptcy lawyers, but I really don't know.

I worked at a hedge fund pre-law school and there were a couple former Rx lawyers who were on our structured/Corp credit desk as investment professionals

Interestingly these folks also worked on lit finance deals we did, not specific to Rx but they worked on them

[Anonymous User]

Thanks for the helpful replies. I assume the investment seats are considered "unicorn" partially because the comp potential is higher than staying in BL. But what about on the desk lawyer side? Are 3rd-5th year associates taking large cuts to move into those roles? What's a typical starting range for that position at a good fund?

[Anonymous User]

Can’t speak to the question you asked but I think lifestyle plays a huge roll too. Big law is brutal and people are willing to make less money (and take more risk) rather than work 70-100 hour (billable) weeks forever.

My understanding is that comp at a fund can be better but there’s no guarantee, and big law partners are making a shit ton these days. A lot of people leave not for the money but because the lifestyle is just too hard.

[Anonymous User]

Can’t speak to the question you asked but I think lifestyle plays a huge roll too. Big law is brutal and people are willing to make less money (and take more risk) rather than work 70-100 hour (billable) weeks forever.

My understanding is that comp at a fund can be better but there’s no guarantee, and big law partners are making a shit ton these days. A lot of people leave not for the money but because the lifestyle is just too hard.

[Anonymous User]

Can’t speak to the question you asked but I think lifestyle plays a huge roll too. Big law is brutal and people are willing to make less money (and take more risk) rather than work 70-100 hour (billable) weeks forever.

My understanding is that comp at a fund can be better but there’s no guarantee, and big law partners are making a shit ton these days. A lot of people leave not for the money but because the lifestyle is just too hard.

Bump

[Anonymous User]

Can’t speak to the question you asked but I think lifestyle plays a huge roll too. Big law is brutal and people are willing to make less money (and take more risk) rather than work 70-100 hour (billable) weeks forever.

My understanding is that comp at a fund can be better but there’s no guarantee, and big law partners are making a shit ton these days. A lot of people leave not for the money but because the lifestyle is just too hard.

Desk lawyer at buy-side fund from BigLaw Rx practice. Different funds are organized differently. Some of the bigger places group all their desk lawyers into some variation of a transactions legal group that reports to the GC. I'm at a smaller shop so I'm embedded in the investment team directly.

Lifestyle is immeasurably better. Nothing can compare to the quantum and stability of BigLaw partner comp no matter where you go as a lawyer, my type of role included. Even if you have good bonus years, it's hard to beat the stable cash flow of being an equity partner at an established firm. But yes most ppl think it's absolutely worth the trade off given lifestyle.

[Anonymous User]

If you are at a credit edged / focused fund, average compensation is roughly equal, however much, much wider range of outcomes. The median compensation for the credit edged investment seats is likely lower than median top 10 bankruptcy firm partner. For example there might be a good senior analyst who has 15 years of experience, clipping 800k - 1.2m and that is a decent outcome, versus a partner who has 4-5 years of partner tenure at a top firm probably makes more than that.

A ton less carry upside in stressed credit, and distressed returns realistically haven't been good enough over last few years to get people lights out pay days.

PE style special situations / distressed PE funds are where the serious carry dollars are at, and partners there do much better than law firm partners beyond the rainmakers. For reference a tenured senior associate at Blackstone Tac Opps / VP at Bain DSSG / principal at APO Hybrid Value / VP at SVP, all in comp with carry clears 1m for people who are roughly 5-6 years out of law school. There are some JD/MBAs landing those seats straight out of law school but they have previous finance experience.

[Anonymous User]

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[Anonymous User]

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[Anonymous User]

PE style special situations / distressed PE funds are where the serious carry dollars are at, and partners there do much better than law firm partners beyond the rainmakers. For reference a tenured senior associate at Blackstone Tac Opps / VP at Bain DSSG / principal at APO Hybrid Value / VP at SVP, all in comp with carry clears 1m for people who are roughly 5-6 years out of law school. There are some JD/MBAs landing those seats straight out of law school but they have previous finance experience.

Could you chime in on which side of work (creditor vs debtor) would offer a better chance in terms of exiting to the distressed debt funds you mentioned?

[Anonymous User]

PE style special situations / distressed PE funds are where the serious carry dollars are at, and partners there do much better than law firm partners beyond the rainmakers. For reference a tenured senior associate at Blackstone Tac Opps / VP at Bain DSSG / principal at APO Hybrid Value / VP at SVP, all in comp with carry clears 1m for people who are roughly 5-6 years out of law school. There are some JD/MBAs landing those seats straight out of law school but they have previous finance experience.

Could you chime in on which side of work (creditor vs debtor) would offer a better chance in terms of exiting to the distressed debt funds you mentioned?

+1

Also curious about the process of moving over. Are recruiters typically involved, or is it a more organic process of doing good work for clients then being invited to join them?

[Anonymous User]

PE style special situations / distressed PE funds are where the serious carry dollars are at, and partners there do much better than law firm partners beyond the rainmakers. For reference a tenured senior associate at Blackstone Tac Opps / VP at Bain DSSG / principal at APO Hybrid Value / VP at SVP, all in comp with carry clears 1m for people who are roughly 5-6 years out of law school. There are some JD/MBAs landing those seats straight out of law school but they have previous finance experience.

Could you chime in on which side of work (creditor vs debtor) would offer a better chance in terms of exiting to the distressed debt funds you mentioned?

Bump.

[Anonymous User]

PE style special situations / distressed PE funds are where the serious carry dollars are at, and partners there do much better than law firm partners beyond the rainmakers. For reference a tenured senior associate at Blackstone Tac Opps / VP at Bain DSSG / principal at APO Hybrid Value / VP at SVP, all in comp with carry clears 1m for people who are roughly 5-6 years out of law school. There are some JD/MBAs landing those seats straight out of law school but they have previous finance experience.

Could you chime in on which side of work (creditor vs debtor) would offer a better chance in terms of exiting to the distressed debt funds you mentioned?

Bump.

If you think about nature of the job - creditor.

Ultimately most moves I have seen to these types of PE style special situations seats have involved an intermediary step however. Ie; stopping at a distressed hedge fund for a bit, or a bank, etc. Also some people who never made it into a firm (theres a guy at Tac Opps who did government work for example).

[Anonymous User]

PE style special situations / distressed PE funds are where the serious carry dollars are at, and partners there do much better than law firm partners beyond the rainmakers. For reference a tenured senior associate at Blackstone Tac Opps / VP at Bain DSSG / principal at APO Hybrid Value / VP at SVP, all in comp with carry clears 1m for people who are roughly 5-6 years out of law school. There are some JD/MBAs landing those seats straight out of law school but they have previous finance experience.

Could you chime in on which side of work (creditor vs debtor) would offer a better chance in terms of exiting to the distressed debt funds you mentioned?

Bump.

If you think about nature of the job - creditor.

Ultimately most moves I have seen to these types of PE style special situations seats have involved an intermediary step however. Ie; stopping at a distressed hedge fund for a bit, or a bank, etc. Also some people who never made it into a firm (theres a guy at Tac Opps who did government work for example).

Interesting. I would have assumed it’s harder to land a gig at distressed hedge funds. I thought in the distressed land, PE shops and hedge funds are essentially doing the same work. Could you maybe explain how distressed PE shops differ from distressed hedge funds?

[Anonymous User]

Bump