Law school -> Biglaw -> PE (investment team) taking questions

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Law school -> Biglaw -> PE (investment team) taking questions

Postby Anonymous User » Sat Apr 06, 2019 1:24 pm

I have a bit of time this week as my deal just died and I used to neurotically post a bit on this board when looking at law schools/during OCI so I figured I would post an AMA.

Some background notes:
1. Non super prestigious background, undergrad was a mid-tier state school with average/below average grades and my law school is OK (we are apparently now above 40% biglaw/fed-clerk) and K-JD
2. Summered and worked in both biglaw and non-legal capacities (corporate development, endowment, and a family office)
3. Interviewed and failed at MBB/Investment Banking coming out of law school
4. Worked as a corporate good PE focused law firm but not V10 in their PE group (think Goodwin/Choate/Ropes)
5. Moved in-house to an industry agnostic middle market PE fund (last fund was ~5b)
6. Now work on the non-legal side of things as an investment professional in a partner track role and could see myself staying in the industry for the next 5-10 years

High-level tips:
1. Networking with people you work with both internal and external is very valuable - I got interviews because I asked people to get coffee to get to know them
2. Don't take yourself too seriously - I made friends with the head of the team who ended up hiring me accidentally at a corporate happy hour quite a few drinks in playing drinking games
3. People respect hard work even if you are in a role that is "beneath" them - I had a good reputation at my fund as a very hard-worker and I found out after I started the role that I beat out multiple candidates from HBS/Wharton/Booth with PE buyout experience in the interview process due to that (I assume they were much better technically than I was)
4. Going to law school if you have good other options (ie; corporate finance at a F500/consulting/banking) with the idea you want to do non-law pursuits is a bad idea. I have multiple friends who are still corporate attorneys/worse options who hate their roles that have not made the jump. Go to business school instead - the path is likely easier.
5. If you don't have good options out of undergraduate, law school may make sense with the right debt/school combo - however you will need to work to get what you want when you are there

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Re: Law school -> Biglaw -> PE (investment team) taking questions

Postby Anonymous User » Sun Apr 07, 2019 6:36 am

Thanks for doing this. I'm a third/fourth year doing fund formation and I've been trying to make the switch to biz/investment side. Below are my Qs

1. what year were you when you moved in house? how long did you stay in house?
2. do you think being an in house lawyer helped at all? was it your plan to go in house first? Ive known people who have gone straight from biglaw to banking but I'm curious if going in house first is in anyway helpful as I have not had much luck with banks/funds so far.
3. how did you get yourself up to speed on technical/modeling skills? did the interviewers grill you hard on these since you didnt have finance bg?
4. are you at the same fund you were in house at?
5. did you use recruiters/apply via firm website/job boards etc. at all (to make the switch to the investment side)? did you get any interviews/offers?
6. is there anything you would have done differently? (assuming you couldn't change the fact that you were in biglaw)

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Re: Law school -> Biglaw -> PE (investment team) taking questions

Postby Anonymous User » Sun Apr 07, 2019 8:40 am

Anonymous User wrote:Thanks for doing this. I'm a third/fourth year doing fund formation and I've been trying to make the switch to biz/investment side. Below are my Qs

1. what year were you when you moved in house? how long did you stay in house?
2. do you think being an in house lawyer helped at all? was it your plan to go in house first? Ive known people who have gone straight from biglaw to banking but I'm curious if going in house first is in anyway helpful as I have not had much luck with banks/funds so far.
3. how did you get yourself up to speed on technical/modeling skills? did the interviewers grill you hard on these since you didnt have finance bg?
4. are you at the same fund you were in house at?
5. did you use recruiters/apply via firm website/job boards etc. at all (to make the switch to the investment side)? did you get any interviews/offers?
6. is there anything you would have done differently? (assuming you couldn't change the fact that you were in biglaw)

1. Very junior associate, was at the firm less than 2 years
2. In house lawyer helped as I understood PE much better than just doing deals
3. I bought wallstreetprep like five years before I interviewed. I also have some of the CFA done which was helpful. I got grilled but I could really drill down on some concepts to really demonstrate understanding (for example I recall a lengthy discussion on depreciation schedules).
4. Yes
5. I did one process through a recruiter at a different fund - this took a couple of meetings with her to even get in the door to interview with the fund. I ended up withdrawing from the process after round 2 as I got my current job (in all fairness not a high chance I got offered as the fund was comparatively small)
6. Going to a better law firm/law school. My network is pretty bad compared to some of the others my level (quite a few Wharton grads).

As a fund formation attorney, I would say the odds are stacked a bit against you. I would target primaries and secondaries PE shops in addition to Private placement groups at banks (ie, lazard private capital/evercore private funds).

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Re: Law school -> Biglaw -> PE (investment team) taking questions

Postby Anonymous User » Sun Apr 07, 2019 8:42 am

I also did a bunch of LBO cases online, they are pretty easy to find.

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Re: Law school -> Biglaw -> PE (investment team) taking questions

Postby Anonymous User » Mon Apr 08, 2019 2:41 pm

Thanks for your replies! Im very much looking to make a move to PE as well and your description of your path seems like my dream outcome. Currently a midlevel m&a and emerging companies associate in a tech heavy practice.

Do you feel like there is a point at which its "too late" to move over to the investment side (like after practicing 6+ years)?

Will I essentially start at salary/level of 22-26 yr olds? (Im very early 30s)?

I have some contacts at IB but not much at good PE shops, should I just be emailing people and ssetting up coffee and lunch?

Did you have to formally interview to move from the legal to investment side, or was the process much less formal since you were already in the fund?

How are hours/salary upside compared to biglaw?

Thanks!

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Re: Law school -> Biglaw -> PE (investment team) taking questions

Postby Anonymous User » Mon Apr 08, 2019 4:30 pm

What's your comp?

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Re: Law school -> Biglaw -> PE (investment team) taking questions

Postby Anonymous User » Mon Apr 08, 2019 10:44 pm

Anonymous User wrote:Thanks for your replies! Im very much looking to make a move to PE as well and your description of your path seems like my dream outcome. Currently a midlevel m&a and emerging companies associate in a tech heavy practice.

Do you feel like there is a point at which its "too late" to move over to the investment side (like after practicing 6+ years)?

Will I essentially start at salary/level of 22-26 yr olds? (Im very early 30s)?

I have some contacts at IB but not much at good PE shops, should I just be emailing people and ssetting up coffee and lunch?

Did you have to formally interview to move from the legal to investment side, or was the process much less formal since you were already in the fund?

How are hours/salary upside compared to biglaw?

Thanks!

For your point on timing - short answer is no, but I would think as you get more experienced, your sweet spot moves to smaller funds as you can show you are experienced enough to run a process. This then can go back up to larger funds as you become very senior (partner level).

On pay - I started at the salary/level of 27 year olds (assuming 2 years PE, 2 years Banking, and an MBA) however I know some other funds will start you at a second year pre-MBA level (without the requirement to get the MBA). Though for most if not all funds this is case by case situation as they really don't have many (if any)successful candidates cone through this avenue. My actual salary is lower than it would be at a law firm but my bonus target puts me around $50k above my class year + lockstep bonus. Carry (when I get it) will put me at significantly higher than that. Most pre MBA associate positions are 225+ all in and but gets a bit more differentiated in partner track roles.

On hours worked - the hours aren't different than at a law firm on a numerical basis, but are generally more predictable as I can set the pace of deliverables I need. On deals, of course it's all hands on deck, but it's more constant 7am to 11pm days rather than all nighter fire drills. I don't really ever have work downtime as we are decently hands on with our portfolio companies.

Interview wise - I formally interviewed like everyone else. Had the same 3 hour LBO test and superday. I would imagine that I had quite a bit of a leg up already having a good reputation in the firm though.

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Re: Law school -> Biglaw -> PE (investment team) taking questions

Postby Anonymous User » Tue Apr 09, 2019 1:22 am

Last questions (same anon as before) - do you know other lawyers who were able to make the jump? Why do you think more lawyers dont do it? What differentiated you from other inhouse counsels?

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Re: Law school -> Biglaw -> PE (investment team) taking questions

Postby Anonymous User » Tue Apr 09, 2019 10:46 am

Congrats. I made a similar transition but on the debt side.

My questions:

1. How did you learn/improve your modeling skills?
2. Have you been exposed to fund raising yet? My impression is certain PE seniors enjoy it and others hate it.
3. Do you sit on the board of any portfolio companies?
4. Any opportunities to jump to industry, yet?
5. Do you day dream about jumping to industry (whether with a sponsored entity or not)?
6. Co-investment rights?
7. What do you miss from firm life?

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Re: Law school -> Biglaw -> PE (investment team) taking questions

Postby Anonymous User » Tue Apr 09, 2019 10:00 pm

Anonymous User wrote:Last questions (same anon as before) - do you know other lawyers who were able to make the jump? Why do you think more lawyers dont do it? What differentiated you from other inhouse counsels?


I know a couple who made the jump but they made the jump generally to the LP side of the fence and in quasi-legal roles rather than the GP (suprising number of CIOs with fund formation experience). Without taking the intermediary step of investment banking, I would say that honestly, its a quite difficult path, you need to learn a somewhat new skillset in addition to taking a large career risk.

It is quite uncommon for an in-house counsel from my experience to make this jump, I believe it has never happened at my firm ever prior to my move (and depending how I fair, may never happen ever again). I would say most don't even make an effort to even take the risk of looking at an investment team and the ones that do get killed on the finance and accounting side of things in the interview process.

Anonymous User wrote:Congrats. I made a similar transition but on the debt side.

My questions:

1. How did you learn/improve your modeling skills?
2. Have you been exposed to fund raising yet? My impression is certain PE seniors enjoy it and others hate it.
3. Do you sit on the board of any portfolio companies?
4. Any opportunities to jump to industry, yet?
5. Do you day dream about jumping to industry (whether with a sponsored entity or not)?
6. Co-investment rights?
7. What do you miss from firm life?


Honestly I think you are more of an "investor" in debt as you just have more reps. I feel equity is very process driven these days especially as there are fewer and fewer quality targets that aren't secondary buyouts.

1. I learned basic three statement modeling a few years ago in law school through in-school jobs. After school and after I started looking at moving from my firm position I spent quite a bit of time modeling CIMs from the ground up using the deal-specific documentation to build it out. I would use an array of various debt instruments and use the large Macabacus model to check that I was thinking about things correctly. As a consequence, my teaser modeling is probably as good if not better than the others my level, however my deeper dive modeling is definitely a bit behind. Final resource that I used was the Dell LBO model floating around.
2. I was involved on the last big fundraise but when I was on the legal side of things (ie; I helped write portions of the commercial part of the PPM). I found the fundraising side a bit annoying because it was so formatting/detail heavy as it is a marketing, client facing document.
3. No - and I will be unlikely unable to at least until the next promotion. We have a strong operating partner network so most of the seats go there.
4. Headhunters have approached generally for corporate development roles but I've declined all calls. I actually get more inbounds regarding hedge funds suprisingly enough despite my non-technical background.
5. Not particularly as of now, and if I were to, I would try to move to our internal consulting arm (smaller version of KKR Capstone).
6. Yes, but relatively significant minimum and no leverage ability.
7. The fallback of someone always checking your work or the comradery. On the fallback, my numbers need to be correct. Yes, maybe I'll run through a model with a senior, but this is red-flags check and often time we may go to the IC without any review. On the comradery, my firm is small and there are alot less people my age, and much less that are also are unmarried than at a law firm. There were 35 or so people that started with me in my law firm class. My entire office has roughly that number.

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Re: Law school -> Biglaw -> PE (investment team) taking questions

Postby Anonymous User » Wed Apr 10, 2019 4:36 pm

Thanks for posting here! I'm a tax LLM doing PE work (M&A and International) at one of the Big4 in NYC. Assuming I stay at my Big4 until Senior or Manager level, what do you think my chances are of: (1) being able to make the move from Big4 to PE in-house at a large shop (Blackstone, KKR, Carlyle, etc.), and (2) being able to transition out of tax work and into PE investment specifically?

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Re: Law school -> Biglaw -> PE (investment team) taking questions

Postby Anonymous User » Wed Apr 10, 2019 10:23 pm

Anonymous User wrote:Thanks for posting here! I'm a tax LLM doing PE work (M&A and International) at one of the Big4 in NYC. Assuming I stay at my Big4 until Senior or Manager level, what do you think my chances are of: (1) being able to make the move from Big4 to PE in-house at a large shop (Blackstone, KKR, Carlyle, etc.), and (2) being able to transition out of tax work and into PE investment specifically?


1. Not being a tax guy, I have no visibility here other than I assume you are some sort of wizard because whenever I talk to our tax counsel, it confuses the hell out of me. I would look at the backgrounds of the tax people at the megafunds to get an idea or look at exits of your group.

2. Not sure on this point but anecdotally, I don't think I know of anyone at my firm or other firms on the investment side who was a "tax" guy or gal other than a guy who got an MBA and was a VP at one of the bulge brackets merchant banking groups post MBA prior to moving over (ie; had very strong non-tax creds).

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Re: Law school -> Biglaw -> PE (investment team) taking questions

Postby Arad » Wed Apr 10, 2019 11:51 pm

Grats on making the switch.

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Re: Law school -> Biglaw -> PE (investment team) taking questions

Postby MaxMcMann » Sat Apr 13, 2019 7:04 pm

Do you think an exit of your type would have been easier/harder with an M&A background instead of fund formation? What about bankruptcy/restructuring (whether creditor or debtor side)?

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Re: Law school -> Biglaw -> PE (investment team) taking questions

Postby Anonymous User » Sun Apr 14, 2019 11:47 am

MaxMcMann wrote:Do you think an exit of your type would have been easier/harder with an M&A background instead of fund formation? What about bankruptcy/restructuring (whether creditor or debtor side)?


I have an M&A background, but while in house did a mix of both.

M&A is a much much easier switch on the GP side as more of your work is applicable. On the LP side, probably more 50-50.

Rx work does well from what I have seen. I have seen exits to hedge funds, distressed PE, and banks though no one I know personally.

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Re: Law school -> Biglaw -> PE (investment team) taking questions

Postby MaxMcMann » Sun Apr 14, 2019 6:56 pm

Anonymous User wrote:
MaxMcMann wrote:Do you think an exit of your type would have been easier/harder with an M&A background instead of fund formation? What about bankruptcy/restructuring (whether creditor or debtor side)?


I have an M&A background, but while in house did a mix of both.

M&A is a much much easier switch on the GP side as more of your work is applicable. On the LP side, probably more 50-50.

Rx work does well from what I have seen. I have seen exits to hedge funds, distressed PE, and banks though no one I know personally.


Putting aside doing good work, networking and other such things, what about your fundamental skillset (or really, any M&A lawyer's) makes you attractive finance? Basically, what is an M&A lawyer's value add relative to the high quality alternative hires they could have made?

And I understand this next one is probably not in your wheelhouse, but do you have a guess for the same question re Rx instead of M&A?



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