What does it actually take to switch to banking? Forum

[Anonymous User]

YSC 2L here. Have some banking experience, but only in investment-grade capital markets. Currently lined up with one of the major creditor-side RX shops for that team. I had a professor mention that I would likely be a good candidate for a restructuring boutique banking role--but she wasn't sure (despite having seen people make the jump) what my next steps would be.

Inasmuch as TLS is a place for lawyers, not bankers, what do you guys think I should do? As far as I can tell, banking seems better than law long-term, but I don't want to look a V10 gift horse in the mouth. What do I need to do to switch and if its actually possible, do you think it's worth it? For the record, I'm not interested in any form of in-house work and am pretty RX focused for now.

[Anonymous User]

I transited from Rx law to Rx banking. Four things you need to do:

1. Brush up your technicals - Know the accounting and corp fin questions on 400 and Rx Interview Guide inside out. Not just reciting the answers but understanding the concepts, i.e. you can answer a 3-statement question for any line item on the 3 statements instead of the common ones like depreciation.

2. Brush up your modeling skills - Rx modeling test usually takes the form of a three statement + LBO, a liquidity roll, or a combination of both. There are plenty of resources out there in addition to what you might have saved down from your analyst stint; take advantage of them.

3. Network, network, network - If you're too shy to cold email and ask for coffee and lunch chats from random people all the time, you shouldn't be a banker to begin with.

4. The last point is often neglected but arguably the most important one - If you're going to work at a Rx law firm first for a bit before going to banking, you will need to be an absolute superstar associate and make all the partners you've worked with like you a lot. It's important because (1) Rx is a very small community and people will call your partners for references during your banking recruitment, and (2) Rx banks get a lot of their deal flow from recommendations by Rx law firms, arguably even more so on the creditor side, and building a good will and impression amongst Rx lawyers like Damian, Basta, Scott, or Ira Dizengoff will get you multiple steps ahead to be a future rainmaking investment banker.

In terms of whether it's worth it, it is highly dependent on what you want and what you're good at. I'm a numbers person so it's liberating when I left big law firm and don't have to deal with motions and case researches anymore. But argubly 10% of an RX lawyer's job is the most fun and intellectual work you can get in RX advisory (even more fun than bankers'), especially with all the lender on lender violence going on. Do I miss doing that 10%? 100% yes. Do I think that 10% is worth killing me for the other 90%? No, so I made the transition.

[Anonymous User]

I transited from Rx law to Rx banking. Four things you need to do:

1. Brush up your technicals - Know the accounting and corp fin questions on 400 and Rx Interview Guide inside out. Not just reciting the answers but understanding the concepts, i.e. you can answer a 3-statement question for any line item on the 3 statements instead of the common ones like depreciation.

2. Brush up your modeling skills - Rx modeling test usually takes the form of a three statement + LBO, a liquidity roll, or a combination of both. There are plenty of resources out there in addition to what you might have saved down from your analyst stint; take advantage of them.

3. Network, network, network - If you're too shy to cold email and ask for coffee and lunch chats from random people all the time, you shouldn't be a banker to begin with.

4. The last point is often neglected but arguably the most important one - If you're going to work at a Rx law firm first for a bit before going to banking, you will need to be an absolute superstar associate and make all the partners you've worked with like you a lot. It's important because (1) Rx is a very small community and people will call your partners for references during your banking recruitment, and (2) Rx banks get a lot of their deal flow from recommendations by Rx law firms, arguably even more so on the creditor side, and building a good will and impression amongst Rx lawyers like Damian, Basta, Scott, or Ira Dizengoff will get you multiple steps ahead to be a future rainmaking investment banker.

In terms of whether it's worth it, it is highly dependent on what you want and what you're good at. I'm a numbers person so it's liberating when I left big law firm and don't have to deal with motions and case researches anymore. But argubly 10% of an RX lawyer's job is the most fun and intellectual work you can get in RX advisory (even more fun than bankers'), especially with all the lender on lender violence going on. Do I miss doing that 10%? 100% yes. Do I think that 10% is worth killing me for the other 90%? No, so I made the transition.

Thank you! Super helpful. Three follow ups: (1) is there anything particular an RX junior should do to be a superstar, besides the typical attentiveness to detail and availiability? (2) What's the 10% you're talking about? Negotiations between the debtors/creditors? I remember some of my interviewers mentioning how they liked working with distressed hedge funds to position themselves on top of the other creditors. (3) A friend of mine is also interested in this path, but he's going to a major debtor-side shop--does that change anything or would it be the same again?

[Anonymous User]

YSC 2L here. Have some banking experience, but only in investment-grade capital markets. Currently lined up with one of the major creditor-side RX shops for that team. I had a professor mention that I would likely be a good candidate for a restructuring boutique banking role--but she wasn't sure (despite having seen people make the jump) what my next steps would be.

Inasmuch as TLS is a place for lawyers, not bankers, what do you guys think I should do? As far as I can tell, banking seems better than law long-term, but I don't want to look a V10 gift horse in the mouth. What do I need to do to switch and if its actually possible, do you think it's worth it? For the record, I'm not interested in any form of in-house work and am pretty RX focused for now.

Have you thought about either (a) re-recruiting or (b) splitting? MBA RX IB associate recruiting is in full swing but from what I recall doesn’t fully start filling seats until January. Having pre-LS credit experience should set you up nicely and you should get rounds with most / all the top RX IB shops.

[Anonymous User]

YSC 2L here. Have some banking experience, but only in investment-grade capital markets. Currently lined up with one of the major creditor-side RX shops for that team. I had a professor mention that I would likely be a good candidate for a restructuring boutique banking role--but she wasn't sure (despite having seen people make the jump) what my next steps would be.

Inasmuch as TLS is a place for lawyers, not bankers, what do you guys think I should do? As far as I can tell, banking seems better than law long-term, but I don't want to look a V10 gift horse in the mouth. What do I need to do to switch and if its actually possible, do you think it's worth it? For the record, I'm not interested in any form of in-house work and am pretty RX focused for now.

Have you thought about either (a) re-recruiting or (b) splitting? MBA RX IB associate recruiting is in full swing but from what I recall doesn’t fully start filling seats until January. Having pre-LS credit experience should set you up nicely and you should get rounds with most / all the top RX IB shops.

My modeling is probably way too rusty rn--my former bank was pretty meh as far as things go and didn't give me as much modeling experience as I would like so I'd def need to study up for a bit. Besides, I would think I have more credibility in FT recruiting coming off of a RX SA, especially since my prior experience is all in the investment-grade world. I'll reach out to my network and see what they think on timing, but the profs I've spoken to mentioned that everyone who made this jump they know of did it in 3L.

[Anonymous User]

(1) That's honestly too broad a question I can answer. To try my best to summarize - be available and work hard, be sharp and pick up new and difficult concepts quickly, spot issues and provide your thoughtful inputs, take on difficult tasks that could be above your seniority/paygrade, be on top of everything happening in the deal, be a likeable person, etc.

(2) I would say (i) if it's in court, the overall chapter 11 case strategies: for in court deals, a lot of times lawyers give marching orders to bankers depending on how the situation develops, and (ii) liability management exercise: understand how you can screw others or how you can be screwed under the credit docs, which ties to the ongoing lender-on-lender violence theme I mentioned (essentially the same thing as positioning your hedge fund clients over the others that you mentioned).

(3) Doesn't change anything. You might get a bit more experience in (2)(i) above at a debtor shop and more (2)(ii) at a creditor shop, but Weil/K&E take on creditor mandates and Paul Weiss/DPW take on debtor mandates too. No meaningful difference if you can get solid deal experience (which partially ties to how good you are under (1)).

[Anonymous User]

YSC 2L here. Have some banking experience, but only in investment-grade capital markets. Currently lined up with one of the major creditor-side RX shops for that team. I had a professor mention that I would likely be a good candidate for a restructuring boutique banking role--but she wasn't sure (despite having seen people make the jump) what my next steps would be.

Inasmuch as TLS is a place for lawyers, not bankers, what do you guys think I should do? As far as I can tell, banking seems better than law long-term, but I don't want to look a V10 gift horse in the mouth. What do I need to do to switch and if its actually possible, do you think it's worth it? For the record, I'm not interested in any form of in-house work and am pretty RX focused for now.

Have you thought about either (a) re-recruiting or (b) splitting? MBA RX IB associate recruiting is in full swing but from what I recall doesn’t fully start filling seats until January. Having pre-LS credit experience should set you up nicely and you should get rounds with most / all the top RX IB shops.

My modeling is probably way too rusty rn--my former bank was pretty meh as far as things go and didn't give me as much modeling experience as I would like so I'd def need to study up for a bit. Besides, I would think I have more credibility in FT recruiting coming off of a RX SA, especially since my prior experience is all in the investment-grade world. I'll reach out to my network and see what they think on timing, but the profs I've spoken to mentioned that everyone who made this jump they know of did it in 3L.

I think communication is more that you have an RX SA and are interested in splitting summer. Credit is credit, if someone from an investment grade background and was in law school was interviewing at the distressed fund I’m at I am not really going to prove that deeply into why restructuring, as it’s relatively clear. I’d just be aware that the timing of a full time offer from a law firm and time to full time recruit might not cross over that well.