Restructuring megathread Forum

[Anonymous User]

There seems to be an uptick in interest in restructuring. I have a lot of questions as someone strongly considering the field. Figured this is a good place for all restructuring related questions.

[Anonymous User]

OP here. Will kick things off.

I’m not gunning to make partner. I don’t even know if I would want to be in big law for more than a couple of years. I am curious though about what the path to partnership looks like in the bankruptcy field. What does business development look like? I’m assuming there would likely be no repeat business from clients. So what determines making it to that level?

[Anonymous User]

Also interested. Particularly what exit options look like

[existentialcrisis]

OP here. Will kick things off.

I’m not gunning to make partner. I don’t even know if I would want to be in big law for more than a couple of years. I am curious though about what the path to partnership looks like in the bankruptcy field. What does business development look like? I’m assuming there would likely be no repeat business from clients. So what determines making it to that level?

Bankruptcy seems like a pretty terrible choice for a group if you know ahead of time you’re only trying to stay at a firm for a few years.

If you don’t think you’re in it for the long haul, I’d really advise picking a group with broader exit options.

[Anonymous User]

OP here. Will kick things off.

I’m not gunning to make partner. I don’t even know if I would want to be in big law for more than a couple of years. I am curious though about what the path to partnership looks like in the bankruptcy field. What does business development look like? I’m assuming there would likely be no repeat business from clients. So what determines making it to that level?

Bankruptcy seems like a pretty terrible choice for a group if you know ahead of time you’re only trying to stay at a firm for a few years.

If you don’t think you’re in it for the long haul, I’d really advise picking a group with broader exit options.

I don’t know that I’m only trying to stay at a firm for a few years. I just find it absolutely silly when people with no comparable prior work experience claim that they know they would want to make partner before they even start. So I wanted to clarify the context surrounding my question.

With that said, I am concerned about the lack of less demanding exit options. Does everyone that joins this practice area somehow know that they’re going to want to be in it long term? I find it difficult to know what I’ll want in five years when I’ve never practiced as an attorney or been in that environment.

[legalpotato]

Is the uptick solely attributed to speculation about the market?

[Anonymous User]

Is the uptick solely attributed to speculation about the market?

Oh, I'm sure. Noticed more interest in restructuring on TLS and on reddit.

[Anonymous User]

Is a debt finance group likely to have better exit options than restructuring?

[Anonymous User]

As someone going thru an attempt to exit rx, I will say it is a great practice if you are good working long hours and living in a major market, either ny Houston or Chicago for your entire career. It is quite confined to those locations and the skills do not transfer well to other practices.

The actual work itself is probably the most interesting in big law though

[Anonymous User]

I've heard people say that junior (1st and 2nd year) restructuring work requires more intelligence/brain power than junior corporate work. Is this correct? I've heard this from restructuring and corporate associates at my firm last summer. It was mentioned that the learning curve for restructuring (especially debtor side work) is much steeper as there are several very complicated financial concepts that you have to master quickly to do your job.

Would those in the field say this sounds right? I'm wondering if this is field dependent or maybe just the firm dependent. The firm I summered at has a very well-respected restructuring practice.

[Anonymous User]

As someone going thru an attempt to exit rx, I will say it is a great practice if you are good working long hours and living in a major market, either ny Houston or Chicago for your entire career. It is quite confined to those locations and the skills do not transfer well to other practices.

The actual work itself is probably the most interesting in big law though

So no exiting into a 9-5? I always assumed that RX associates could maybe talk their way into a cushy in house job. They do a lot of transactional work and maybe framing their experience strategically helps? I know the counter is 'why would a company hire a RX associate when they could just hire a transactional attorney that spent their years doing relevant work around the clock'? But I'm wondering if there are other skills that RX associates bring to the table that could be helpful for companies? I know the optics of hiring a RX attorney are not good.

[njdevils2626]

I've heard people say that junior (1st and 2nd year) restructuring work requires more intelligence/brain power than junior corporate work. Is this correct? I've heard this from restructuring and corporate associates at my firm last summer. It was mentioned that the learning curve for restructuring (especially debtor side work) is much steeper as there are several very complicated financial concepts that you have to master quickly to do your job.

Would those in the field say this sounds right? I'm wondering if this is field dependent or maybe just the firm dependent. The firm I summered at has a very well-respected restructuring practice.

Throwing my hat in the ring as a restructuring senior associate if anyone has any questions. I'd say that this is correct, obviously caveated by all my experience being in restructuring and not actually having done much junior corporate work outside of that context. But all my junior experience was debtor-side work, and I would say that nothing requires more brain power, creativity, and actual understanding of what you're doing than high level debtor-side chapter 11. As a junior I was drafting substantive pleadings, working directly with clients on first day motions and diligence, arguing in court, and drafting the terms of the Plan, Disclosure Statement, APA and 363 sale motion, etc. If you enjoy it, nothing will help you develop your legal skills better/faster

Creditor work (particularly secured, rather than UCC) will likely be more similar to corporate from a junior associate's perspective.

[njdevils2626]

As someone going thru an attempt to exit rx, I will say it is a great practice if you are good working long hours and living in a major market, either ny Houston or Chicago for your entire career. It is quite confined to those locations and the skills do not transfer well to other practices.

The actual work itself is probably the most interesting in big law though

So no exiting into a 9-5? I always assumed that RX associates could maybe talk their way into a cushy in house job. They do a lot of transactional work and maybe framing their experience strategically helps? I know the counter is 'why would a company hire a RX associate when they could just hire a transactional attorney that spent their years doing relevant work around the clock'? But I'm wondering if there are other skills that RX associates bring to the table that could be helpful for companies? I know the optics of hiring a RX attorney are not good.

I've never looked to transition to in-house, but it's not a common path, I wouldn't expect a 9-5. That said, my argument has always been that (particularly debtor-side) restructuring associates should be the most competitive for in-house positions and would be hired regularly if it didn't make business people squirm to say they're hiring a bankruptcy attorney. Nobody in big law dives deeper under the hood of businesses that have gone wrong or deals hands-on with contractual issues more than debtors' counsel

[existentialcrisis]

Is a debt finance group likely to have better exit options than restructuring?

Yes, but still not tons of exit options.

Of the core transactional groups, m&a and capital markets will generally speaking have a much easier time than credit with exit options.

[Anonymous User]

I've heard people say that junior (1st and 2nd year) restructuring work requires more intelligence/brain power than junior corporate work. Is this correct? I've heard this from restructuring and corporate associates at my firm last summer. It was mentioned that the learning curve for restructuring (especially debtor side work) is much steeper as there are several very complicated financial concepts that you have to master quickly to do your job.

Would those in the field say this sounds right? I'm wondering if this is field dependent or maybe just the firm dependent. The firm I summered at has a very well-respected restructuring practice.

As a junior I was drafting substantive pleadings, working directly with clients on first day motions and diligence, arguing in court, and drafting the terms of the Plan, Disclosure Statement, APA and 363 sale motion, etc.

This is really helpful! Can you explain what diligence would look like? And what APA is? Do you draft documents or motions from start to finish? How much original writing are you doing as a junior vs using forms?

[Anonymous User]

I am curious though about what the path to partnership looks like in the bankruptcy field. What does business development look like? I’m assuming there would likely be no repeat business from clients. So what determines making it to that level?

Would also like to know.

[existentialcrisis]

As someone going thru an attempt to exit rx, I will say it is a great practice if you are good working long hours and living in a major market, either ny Houston or Chicago for your entire career. It is quite confined to those locations and the skills do not transfer well to other practices.

The actual work itself is probably the most interesting in big law though

So no exiting into a 9-5? I always assumed that RX associates could maybe talk their way into a cushy in house job. They do a lot of transactional work and maybe framing their experience strategically helps? I know the counter is 'why would a company hire a RX associate when they could just hire a transactional attorney that spent their years doing relevant work around the clock'? But I'm wondering if there are other skills that RX associates bring to the table that could be helpful for companies? I know the optics of hiring a RX attorney are not good.

I've never looked to transition to in-house, but it's not a common path, I wouldn't expect a 9-5. That said, my argument has always been that (particularly debtor-side) restructuring associates should be the most competitive for in-house positions and would be hired regularly if it didn't make business people squirm to say they're hiring a bankruptcy attorney. Nobody in big law dives deeper under the hood of businesses that have gone wrong or deals hands-on with contractual issues more than debtors' counsel

Yeah, my point was purely that TLS has through the years been littered with BK associates lamenting their lack of in house exit options and that it just doesn't feel like a background that most in house folks are interested in hiring.

I don't disagree that BK associates should be considered for these positions. Personally, I've generally been pretty impressed with BK folks I've encountered of the years and their breath/depth of knowledge.

What I do think is that most people aren't cut out for biglaw long term and that as a consequence the average law student would be wise to think long and hard about what the exits look like before starting their career in a restructuring group.

[Anonymous User]

I'm a little confused by some of the exit options talk. I understand, of course, that most corporate associates have much more clear cut, linear exit options. They have obvious next steps that RX associates kinda don't, I get that. But I find it hard to believe that an associate who, though not "cut out" for Big Law in the long run, with four years of experience at a place like Weil or KE would have a tough time finding a new job. It might be a little trickier, I get that, but if you follow the whole T14 to BigLaw path and do a fine job for three, four, or five years, your resume will be sparkling. I don't think finding that next job will be so terrible, right? Obviously I have not reached that next job point yet, so maybe I just don't know.

[existentialcrisis]

I'm a little confused by some of the exit options talk. I understand, of course, that most corporate associates have much more clear cut, linear exit options. They have obvious next steps that RX associates kinda don't, I get that. But I find it hard to believe that an associate who, though not "cut out" for Big Law in the long run, with four years of experience at a place like Weil or KE would have a tough time finding a new job. It might be a little trickier, I get that, but if you follow the whole T14 to BigLaw path and do a fine job for three, four, or five years, your resume will be sparkling. I don't think finding that next job will be so terrible, right? Obviously I have not reached that next job point yet, so maybe I just don't know.

I didn't work in bankruptcy so I wouldn't know first hand, but from many TLS posts over the years the bolded does seem like the case (or at least a tough time finding a new ~9-5 job that pays pretty well).

I have applied to in house positions though and looked at various listings over the years and what I can say is that for most of these positions, a securities or M&A associate will have directly applicable experience that these companies affirmatively say they're looking for. A BK associate will need to spin their experience to demonstrate how it will be applicable to a typical in house role.

A ton of people apply to these in house positions and I suspect a lot of restructuring associates, even those from K&E, Milbank, Weil, etc., get overlooked at the initial screening stage because they don't check the boxes that the recruiters looking at the resumes are looking for.

I think often on TLS people struggle with the fact (and I'm not necessarily accusing you personally of this) that following what seems like amost prestigious path won't necessarily keep every conceivable option open.

If I want a hybrid investing role at a distressed credit fund, then K&E or DPW BK is probably a great choice for a group.

If want a standard in house role at F100 company, I'd take a M&A or Cap Markets role at Willkie or Fried Frank 10/10 over K&E or Weil BK.

My whole schtick here is not to to tell folks to avoid BK at all costs or to abandon it if you enjoy it, but instead to make an informed choice about what a restructuring career is likely to look like, particularly in light of how much of a grind big law is for most people.

[OPM]

a couple of thoughts on the exit discourse (not in RX, but a couple of my partner / siblings / close friends are though). RX associates have great exits—just not the ones that more conventional Corp practices have. There are a lot of credit funds that hire RX lawyers into both legal and hybrid roles; there is significant demand for RX lawyers in investment banking (far more than for M&A lawyers per seat); some industries that are very conscious about managing their balance sheet, like energy, are interested in RX associates; the partnership odds are pretty good in RX versus many other niche Corp practices; there are lots of restructuring advisory shops, etc. These are all pretty good exits, and you can exit to one if you’re a decent RX associate. However, for general in house corporate jobs, yeah RX puts you at a disadvantage. It’s not fair, since I think RX associates learn a lot and do more interesting work than many corporate practices, but is a function of the niche nature of the practice. My sense is, (1) if you want to do restructuring related work, in or out of law, then definitely do RX and you won’t regret it; (2) but if you’re not sure and want to keep as many options open, you should probably reconsider.

[njdevils2626]

I am curious though about what the path to partnership looks like in the bankruptcy field. What does business development look like? I’m assuming there would likely be no repeat business from clients. So what determines making it to that level?

Would also like to know.

This really depends on whether your focus is debtor or creditor work. On the creditor side, you want good relationships with clients at banks, distressed debt funds, etc. who will be able to continue giving you work. You will also want to meet as many people as possible on the business side or in-house there to try and get additional outside business. On the debtor side, you're right that ideally there's not a whole lot of repeat business, but you want to be able to demonstrate to partners that you're someone who can win business when needed. That includes being involved in and performing well during pitches to prospective clients they bring in, showing a marketing aptitude (including actually using your business development budget and taking clients out), and establishing a reputation in the industry (including speaking on panels, helping partners publish articles and getting writing credit, and more). Establishing relationships with people at your level at restructuring financial advisory shops (FTI, AlixPartners, etc) and at investment banks in the area will be valuable, as they oftentimes get engaged earlier than attorneys and can steer a case your way

[Anonymous User]

There are repeat clients in bk. On creditor side its self explanatory. Then there's distressed and workout funds. (and fwiw these are also potential exit options).

Also I've seen bk partners get clients and staff service partners and seniors on them. What you do your BD in isn't always exactly what you practice.

[Anonymous User]

Anyone who made the jump from RX law to RX banking—how did you learn the modeling? I’m interested in that path and networking with ex-lawyers in the field, but they’re all older and don’t know what the best services. I’ve found a restructuring-specific service online but it looks like an overlay on a strong modeling background.

[Anonymous User]

Anyone who made the jump from RX law to RX banking—how did you learn the modeling? I’m interested in that path and networking with ex-lawyers in the field, but they’re all older and don’t know what the best services. I’ve found a restructuring-specific service online but it looks like an overlay on a strong modeling background.

Start with the simple three-statement model and LBO. Wall Street Prep and training the streets are both good resources. The other rx-specific models like liquidity roll forward, S&Us of distress exchange, etc. will be easier to crack once you can parse through a three-statement quickly.

[Anonymous User]

Anyone who made the jump from RX law to RX banking—how did you learn the modeling? I’m interested in that path and networking with ex-lawyers in the field, but they’re all older and don’t know what the best services. I’ve found a restructuring-specific service online but it looks like an overlay on a strong modeling background.

Start with the simple three-statement model and LBO. Wall Street Prep and training the streets are both good resources. The other rx-specific models like liquidity roll forward, S&Us of distress exchange, etc. will be easier to crack once you can parse through a three-statement quickly.

Perfect, thank you