Going from law firm to hedge or private equity fund
Hi,
Looking for insight as I'm trying to switch careers from law to finance. I have a good pedigree for law (ivy league undergrad and law school, worked at two top law firms for 6 years doing fund formation work), but don't have any investment banking experience. My (somewhat) relevant experience would be working at one of the largest investment firms for two years out of college doing financial reporting/investor relations, a CFA, and a very short stint as a distressed debt analyst for a family office.
I'm in my mid-30's. Have any of seen someone make this kind of move? If not, do you think it's remotely feasible?
Thanks!
How to Transition from Law to Finance
The transition from law to finance can be difficult, but it can be done. OPs top tier educational background, fund formation work and CFA charter should help him in securing introductions and phone calls. Some areas of finance may even view his law experience as an asset. WSO users offer this additional advice:
Transition to Another Group Within Firm
From Certified Private Equity Professional - Director @brandon st randy" :
I would try to move to the transaction advisory side of your law firm. As a top law firm you will likely get chances to work with major buyside clients as legal counsel on their acquisitions and buyout deals. From there you can take initiatives to actively get involved in working with clients directly and get acquainted with the PE/HF executives in the process. Once you get to know them well and if they like the works you put together for them then you can ask to transfer to their side. This is how the late Ted Ammon (RIP) made his transition from lawyer to KKR where he went on to make general partner.
Pursue Path that Values Law Background
From Certified Private Equity Professional – Partner @APAE" :
You could aim to continue on the distressed/special situations path. Many funds who employ this strategy value a legal background highly; if you look at the bios any of these funds have on their sites, it's always a bit surprising to see so many people who went to lower-ranked law programs, got into good law firms, and moved over to finance at some point. If you have an Ivy undergrad and Ivy law degree, I don't think you'd have trouble getting people to accept your phone call. How well that phone call goes, however, is going to be a function of how prepared you are (start now, there's an immense number of resources available) and how well you can sell your prior experience.
Issues to Consider
From Certified Hedge Fund Professional @on the road" :
I have made the switch. My brief background, in case it's helpful: good schools, transitioned very quickly out of law, spent a few years in non-IBD roles at well known banks (think GS/MS/JP), and then made a transition to hedge funds. There are a few layers of issues that you'll need to determine as you try to make a transition:
- You'll need to have a rock-solid answer as to why you're leaving the law, particularly as a 6th/7th year. As long as it's a good story, you'll be fine, but it needs to be more than I don't think I'll make partner.
- Since most buy-side shops don't have any formal training and expect you to hit the ground running, you'll need to show that you can conduct valuations/build models. Since you hold the CFA it'll be easier for you than most lawyers but you'll likely go through a case study of some sort so prepare yourself for that.
- Beyond just the basic valuation/modeling skill-set, buy-side firms will want to know that you have an investor mindset (i.e., what's your investment process, how do you generate ideas, what makes something compelling for you, etc...). For example, examples from personal investing.
- You'll need to determine if you want to be a PE investor or a HF investor. This is important b/c it'll force you to think about what type of investor you want to be, which in turn should make your job search more focused.
- Given you're in your mid-30s, you'll also need to determine if you're willing to potentially take less money than you're making now since there is a very real possibility you won't make the same amount of money as you are now--at least the same amount of guaranteed money.
- If you join a shop that has a few other investment analysts, chances are you will be much older than other analysts and know the least--psychologically that's a tough thing considering you're probably a very knowledgeable/experienced funds formation lawyer...basically are you ready to be uncomfortable for a bit while you get up to speed?
- The biggest thing you can do is network. This is the single most powerful thing that helped me when I transitioned away from law. You're fortunate b/c you can tap into two great alumni networks. I would reach out to people shamelessly.
Recommended Reading
- Law to Investment Banking: One Monkey’s How To Guide
- Lawyer to PE Deal Team Survey: How Did Your Colleague Make the Switch
- Possible to Transition from Attorney to Hedge Fund?
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I would try to move to the transaction advisory side of your law firm. As a top law firm you will likely get chances to work with major buyside clients as legal counsel on their acquisitions and buyout deals. From there you can take initiatives to actively get involved in working with clients directly and get acquainted with the PE/HF executives in the process. Once you get to know them well and if they like the works you put together for them then you can ask to transfer to their side. This is how the late Ted Ammon (RIP) made his transition from lawyer to KKR where he went on to make general partner.
I agree with the above. If you're at one of the BigLaw firms and can get on the transaction advisory side, if you get decent projects and develop relationships with any of your clients, you have a good shot at getting brought in-house. From what I understand from those of my friends who went to law school, these are the positions that are in vogue right now anyway, so your goal is also a goal many other people have as well.
Or, you could aim to continue on the distressed/special situations path. Many funds who employ this strategy value a legal background highly; if you look at the bios any of these funds have on their sites, it's always a bit surprising to see so many people who went to lower-ranked law programs, got into good law firms, and moved over to finance at some point. If you have an Ivy undergrad and Ivy law degree, I don't think you'd have trouble getting people to accept your phone call. How well that phone call goes, however, is going to be a function of how prepared you are (start now, there's an immense number of resources available) and how well you can sell your prior experience.
For the record, I think you're making the right move. I'm not in the industry, but it certainly seems to me that law is going through a structural downturn, not a cyclical one.
I was actually referring to him transitioning to the buyside as an investment professional, not legal/compliance personnel. While many practicing lawyers nowadays aim at transitioning to working as buy-side shops' in house attorneys, the recruitment process for those positions tend to be rather standardized with fixed number of available openings in each shop and is done via recruiters, HR etc.
What I have in mind is that, if the OP can proactively work with the client, come up with creative deal solutions and maybe even leverage his own personal connections to help the client source deals and come up with alternative deal angles and structures--in other words, go well above and beyond his limited duties as an outside legal counsel to add values and make money for the client, then he may quite likely impress some partners at a buyside shop, who will then vouch for the OP to bring him onboard. This is quite possible since the OP is an experienced professional who has been in the business for sometime as opposed to a recent law grad.
This way the OP can readily bypass the standard recruitment process and, depending on how well the partner thinks of him, may even join in directly at a more senior level like director and get to sit on the investment committee and boards of portfolio companies right away. The challenge with this approach is that, since the partner is bringing YOU (as opposed to a generic hire for an existing opening position) onboard for a very specific purpose, you really need to perform up to his/her expectations from day one. You are coming in as a proven deal expert so there will be no training program and you need to start utilizing your existing skill sets and industry relationships to add values to the firm from the get-go.
I agree with brandon st randy. Transaction advisory would be your best bet.
I have made the switch. Though my legal background was not in fund formation, I am familiar with your work. My brief background, in case it's helpful: good schools, transitioned very quickly out of law, spent a few years in non-IBD roles at well known banks (think GS/MS/JP), and then made a transition to hedge funds.
There are a few layers of issues that you'll need to determine as you try to make a transition.
-You'll need to have a rock-solid answer as to why you're leaving the law, particularly as a 6th/7th year. As long as it's a good story, you'll be fine, but it needs to be more than I don't think I'll make partner.
-Since most buy-side shops don't have any formal training and expect you to hit the ground running, you'll need to show that you can conduct valuations/build models. Since you hold the CFA it'll be easier for you than most lawyers but you'll likely go through a case study of some sort so prepare yourself for that.
-Beyond just the basic valuation/modeling skill-set, buy-side firms will want to know that you have an investor mindset (i.e., what's your investment process, how do you generate ideas, what makes something compelling for you, etc...). The biglaw experience doesn't lend itself to honing this thought process so you'll need to have examples to show that you do have this mindset and are not solely focused on risk mitigation. For example, examples from personal investing.
-You'll need to determine if you want to be a PE investor or a HF investor. This is important b/c it'll force you to think about what type of investor you want to be, which in turn should make your job search more focused.
-Given you're in your mid-30s, you'll also need to determine if you're willing to potentially take less money than you're making now since there is a very real possibility you won't make the same amount of money as you are now--at least the same amount of guaranteed money. Additionally, if you join a shop that has a few other investment analysts, chances are you will be much older than that other analysts else and know the least--psychologically that's a tough thing considering you're probably a very knowledgeable/experienced funds formation lawyer...basically are you ready to be uncomfortable for a bit while you get up to speed? Lots of people have problems w/that as they get older/more established in their careers, so something to think about.
-My experience w/law firms is that by the time one is a senior associate, it's likely difficult to make a transition from a funds practice to M&A, bankruptcy, or other practice that might be more relevant to an investing career...Perhaps your firm is an exception? If you can make a practice group switch, obviously that doesn't hurt, but be sure to get into something that moves you closer (e.g., bankruptcy) and not something like generic capital markets.
-The biggest thing you can do is network. This is the single most powerful thing that helped me when I transitioned away from law. You're fortunate b/c you can tap into two great alumni networks. I would reach out to people shamelessly.
Happy to help w/specific questions.
.
i think your skill set would be more useful at private equity there are actually a couple people here at my PE firm who made the transition from law, and are probably more qualified and better workers than the other people here with different degrees
Plenty of opportunities to work as legal counsel or asst. legal counsel or in the Compliance space. All firms, PE, HF, AAM, IB, etc. need these types and if you have JD you can do very well without the stress of front office life.
Get PE transaction experience and then go to PE house, but again will be a challenge to shrug off the legal yoke and be a pure investment professional, or IMO more realistically a distressed debt HF where solid legal background is highly valued. You need to develop some ideas and pitch them though. And what was said before, network your balls off and try to find alumni that can give you some perspective, there must be some classmates / alumni who have done what you want to do. It is not impossible, even if it may be non-standard.
Big Law to PE? (Originally Posted: 08/25/2010)
Started college younger than most so I really took my time in school and was in no rush to get a job. My credentials are listed below:
Undergrad: Economics and Philosophy Grad: MA, in Econ (finished in 1 year instead of two: had alot of grad coursework coming in) MS, in Finance JD/MBA combo Ll.M. (concentrating in Securities, Fin. Reg, etc.)
Now working at a very prestigious firm known for Restructuring/Bankruptcy and much less so for M&A even though it's still a highly respected practice area for us. Have been working as a lawyer for about a year and am really enjoying what I do, however, PE has always been that patch of grass on the other side of the fence for me. Really never pursued it because I didn't think I could ever get a job at a good firm (went to REALLY small and REALLY non-target undergrad and grad for my MA and MS). I've already spoken with several friends in PE who have no doubt (given my skill-set which is really at the cross-section of law and finance) that I would be good addition to a number of firms, however, I got differing opinions as to what path I should take from Big Law to PE. Some were saying I wouldn't really be able to make the switch unless I went through IB. Others said that I probably could jump right over if I made the right connections and a few said that I would be hard-pressed to make the lateral to PE at all. I'm just seeking a wider audience for this question: How can one make make the switch from Big Law to PE (preferably to a really good PE firm) and if it is even possible without being absurdly well connected.
Regards,
Back_That_Thang_Up
amazing. i just left another comment on a thread pretty similar to this one.
so youre pretty set on switching?
to give you an idea of the structure of typical PE firms and where you would fit in: some guys in the business model potential acquisitions and theyre typically from IB, some guys run and manage port co.s and usually have an operations or consulting background, some guys will be general council and those guys will obviously have a legal background etc etc. you get the point.
you would be the GC guy. sometimes PE firms outsource all legal, sometimes they have in-house council.
if i were you, i would stick to what you are doing and try to segue into a practice area that deals with PE. i know someone doing this right now and she meet a bunch of high-level PE guys. she has developed a nice Rolodex for herself. so work in PE and M&A law for a couple years, then you will have a valuable skill set that PE firms will be willing to pay for. that is your path of least resistance.
make sense?
PE firms nut hard for credentials, degrees, etc. Your background should at least get you interviews. Start networking with the various alums at schools where you've received degrees.
I'm assuming the LLM would have been from NYU, Columbia, or GTown...
look into some credit hedge funds too.
And if I wanted to move to buy-side or sell-side? I know it'd be very tough but is it possible at this point?
I would say that through Big Law transaction experience, you probably have developed some strong insight into way deals are structured, etc. However, at the more junior levels, you are relied on for analysis, modeling execution, etc. Do you have any financial experience (i.e. something with numbers)?
Even if you were to come in at a senior associate / vice president, you're still expected to be have a pretty strong grasp of the basic financial components of a deal. I know a bunch of guys in PE who have law degrees; they all have some IB experience.
I would say that it is probably easier to transfer to an investment bank from a law firm than a private equity shop, if you're looking to do more on the deal origination/execution side. In fact, I knew a bunch of ex-lawyers who became investment bankers.
Moving from BIGlaw to PE - is it possible? (Originally Posted: 12/19/2007)
What are the odds of lateraling from biglaw to pe after say about 3 years of pe and/or bankruptcy legal work? Assume the candidate also has a summer of BB banking experience and a top 10 mba.
I thought you were going to be working in IBD at a BB? (At least, that's if you're the same Kimbo Slice from XO.)
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