Ever wondered what it takes to become a banking & finance lawyer? We spoke to a few lawyers from Cahill to hear more about the ins and outs of their practice...
Chambers Associate: What does Cahill’s banking & finance practice cover?
Elizabeth Yahl, partner: We represent financial institutions in connection with loan financings in a number of different contexts. The financings include term loans, revolving lines of credit and bridge loans and may be provided by the syndicated market, traditional banks or private lenders.
Stu Downing, partner: We advise leading commercial and investment banks as well as direct lenders in complex financing transactions across leveraged finance, investment grade finance, asset-based lending, private & direct credit and project financing.
Richard Pan, associate: Cahill’s practice covers a wide array of financing transactions, whether it be in the leveraged or investment grade markets, and spans across a mix of products, from traditional syndicated loans to private credit and direct lending, as well as asset-based lending.
CA: What interests you the most about the practice of banking & finance?
EY: The practice involves a number of details-specific concepts and can be like a puzzle making sure all of the pieces work together in the documents. I really enjoy the drafting aspects of the work and the feeling of satisfaction when we’ve come up with a new solution and figured out how to craft the words around the concept that we are trying to employ.
SD: One of the more interesting aspects of the practice is how it is integrated with our capital markets practice allowing us to provide a seamless solution for companies and financial institutions executing multiple simultaneous financings.
RP: Even though the credit agreements we negotiate in connection with our financing transactions seem daunting at first, I became interested in understanding the practical implications that different provisions have on real companies, as well as how real world events serve as the impetus for seemingly innocuous changes in the legal documentation.
"The practice involves a number of details-specific concepts and can be like a puzzle making sure all of the pieces work together in the documents."
CA: What types of clients do you tend to come across in your day to day work?
EY: Most of my clients are investment banks who are syndicating credit facilities and commercial banks making financing available to their clients directly.
SD: My clients are primarily the leading investment and commercial banks in the leveraged finance and investment grade finance markets.
RP: The majority of clients we interact with at Cahill are financing sources, typically in the form of investment banks or direct lenders.
CA: How much cross-practice collaboration is required on each deal? Which other practices do you find yourself working with frequently?
EY: Most frequently we are working with our tax colleagues on deal structure and potential tax liabilities that could arise, but we also work with colleagues in the UCC, real estate, regulatory and litigation groups regularly on issues that may arise.
SD: A majority of the transactions I work on involve some element of cross-practice collaboration whether that be with our capital markets, tax, bankruptcy, antitrust, litigation, environmental or UCC practices among others.
RP: I would say almost every transaction will involve some degree of collaboration across practice groups. Borrowers often layer different products into their capital structure, and we frequently find ourselves working with our capital markets colleagues as they work on concurrent securities offerings. Given the nature of Cahill’s practice, there is often overlap across the covenants and collateral packages covering a company’s debt instruments, and we work with the other teams at Cahill to ensure these are aligned in a rational manner.
CA: What are the main responsibilities of a partner in the practice?
EY: The partner’s primary role is to make sure our client is receiving the exceptional service that they expect on the transaction. I work together with my team in negotiating and reviewing documents and ensuring that the process is running smoothly.
SD: Partners and associates work together in order to successfully guide a transaction to completion. Both partners and associates are actively involved in the review, analysis, drafting and negotiation of the relevant legal documents for a given transaction. As a firm, we are of the philosophy that associates should be given as much responsibility as they are capable of managing with oversight from more senior lawyers.
"...we are of the philosophy that associates should be given as much responsibility as they are capable of managing with oversight from more senior lawyers."
CA: What are the main responsibilities of an associate in the practice?
EY: An associate is responsible for managing their piece of the transaction – whether that is negotiating terms in the credit agreement as the senior associate or drafting the certificates and opinions as a more junior associate. We expect the associates to be involved in all parts of the transaction and to take on more responsibilities when ready.
SD: The responsibilities of an associate vary by their level of experience and/or seniority. Junior associates are primarily responsible for some of the more mundane tasks while a more seasoned associate can expect to have more responsibility. For example, a more seasoned associate may be tasked with being the primary drafter of key documents, leading and/or participating in the negotiation of key documents and communicating with clients where appropriate.
RP: I think one of the unique aspects of Cahill is that associates are given a great deal of latitude to take on as much responsibility as they are comfortable handling. Very rarely will anyone step in and stop you from taking on an assignment as long as communicate an interest in doing so. Associates start out their careers managing the transaction process and learning the key milestones in a deal, eventually progressing to drafting the core transaction documents and becoming the first point of contact when clients reach out with questions.
CA: What trends are currently impacting the work you’re doing?
EY: There have been a number of liability management transactions in the past few years that have led lenders to rethink what protections they need in their documentation. As lenders’ counsel, we are focused on protecting the position of the lenders as secured creditors and ensuring that there are not big loopholes allowing that position to be disadvantaged, and when transactions in the market change the relative position of the lenders in that deal, it ripples through to how we think about the next deal.
SD: The rise in scale of the private credit market over the past couple of years has had a direct impact on my practice which has been primarily in the syndicated finance space. As a firm we are expanding our private credit practice in order to be well positioned to support that market.
RP: Obviously, the surge in private credit work is something that can’t be ignored and is an area that associates at Cahill are seeing more opportunities to get involved in. More specifically, given Cahill’s familiarity with the syndicated loan market, it’s been interesting to see a degree of convergence of the two markets, as more traditional banks expand into the private credit space and private lenders start to participate in transactions that involve larger groups, and how various terms start to get carried over into the respective documentation.
"...the surge in private credit work is something that can’t be ignored and is an area that associates at Cahill are seeing more opportunities to get involved in."
CA: What are the highs of the practice?
EY: Closing a deal. When you spend months working towards the completion of a transaction and that finally happens, there is a collective feeling of accomplishment with our clients and the other law firms working on the transaction – it is really a team effort.
SD: There is always a lot of hard work and effort that goes into each and every transaction we work on. Seeing them to completion is still a thrill for me.
RP: Without a doubt the interactions I have with my peers are the defining moments of my experience at Cahill. I think everybody at the firm understands that we work in a challenging and often stressful industry, and it’s refreshing to work with a group of likeminded colleagues who are genuinely invested in your development and want you to be successful in your career.
CA: What are some of the challenges that arise in the practice?
EY: The practice is very detail-oriented and that can be a challenge to some. A small change in the credit agreement could have ripple effects to other sections or documents that could be problematic if you do not have careful eyes on the documents.
SD: Each transaction comes with its own set of challenges. In some cases, the timeline for completion is a key challenge while in others it may be the complexity of the legal analysis. Often it is a combination of both.
RP: Probably the biggest challenge an associate faces here is learning how to avoid overextending yourself. Cahill operates using a free market system, where partners reach out directly to associates if there are new matters that require staffing. The benefit is that for the most part associates can work on the transactions that most interest them, but at the same time, it’s important to understand how much you can handle at any given time. If you take on too many assignments at once, not only are you putting yourself at risk of burning out, but you also won’t be an effective member of the team if you aren’t able to dedicate the appropriate amount of time to any given matter. I think that differs depending on the individual, and is something that associates starting out at Cahill need to understand about themselves.
CA: How do you see the market evolving over the next five years?
EY: We’ve seen private credit come in as a real competitor to the syndicated market in the past few years and expect that is here to stay. As our firm has been focused on expanding into the private credit market, it will be interesting to see the ebbs and flows between the two markets.
SD: There is significant overlap between banking and private credit markets. I would not be surprised to see more convergence across those two markets over the course of that period.
RP: Following a relative decrease in new transactions in the last couple of years, I think activity will likely pick back up, as many of the facilities that were initially put in place during the pandemic will be maturing over the next five years, and we are already seeing a large number of refinancings happening right now. This would complement the expected uptick in the volume of acquisition related financings, leading to an overall increase in the market.
"We’ve seen private credit come in as a real competitor to the syndicated market in the past few years and expect that is here to stay."
CA: What opportunities are unique to Cahill’s banking & finance practice?
EY: Cahill is one of the only firms that regularly has attorneys practice both in the banking & finance group and the capital markets group. A number of our partners and associates work on both credit facilities and debt securities offerings and find that there is value in being able to work on both types of transactions. The free market system at Cahill allows associates to take on different types of corporate transactions based on their interests and allows them to really build their own career rather than being limited to one group.
SD: Our practice is unique in that it is not separate and apart from our capital markets practice. We encourage our associates to become experts in both.
RP: The size of the group relative to the overall firm offers associates a unique opportunity to quickly develop a thorough understanding of the practice. Overall headcount is smaller than other firms in the same space, but a significant contingent are all involved in the practice, which creates an atmosphere where you quickly become acquainted with all your colleagues, but still have ample opportunities to work with a varied group of attorneys with a wide breadth of experience.
CA: How can law students start preparing for a career as a banking & finance lawyer?
EY: In law school, take any classes available to you in transactional work or practical corporate skills (drafting or negotiations). Classes on corporate law, secured transactions and corporate tax may give you helpful background for this practice.
SD: For any student with an interest in a banking & finance practice, I would suggest they look to take courses with a finance connection such as corporate finance and/or commercial lending courses, securities regulation, accounting for lawyers and transactional tax courses.
RP: I don’t think there’s a definitive set of criteria that you need to satisfy before starting a career in this practice group. Having a basic understanding of how collateral and secured transactions work will certainly help, but more importantly getting into the habit of being organized and responsive are probably the best ways to hit the ground running.
"Don’t feel that this practice is limited to students who already have a business background."
CA: And finally, do you have any advice for law students looking to practice banking & finance?
EY: Don’t feel that this practice is limited to students who already have a business background. Many attorneys in this field didn’t start out with that background and have thrived by learning on the job and reading up on the practice.
SD: Engage yourself in the financial news cycle.
RP: I would just suggest coming into the job with an open mind and not being afraid to ask questions. Personally, a lot of the issues we come across on a daily basis weren’t intuitive to me at first, but I think as long as you are willing to try and think through the problems and embrace new concepts, then you can find success in this field.
