[Law in PE] What does the legal team of a private equity firm do?
What do they do? What backgrounds do they come from? Do they ever make their way onto the investment committee track? What are the hardest parts of their job and what are the easiest? What do they do day to day? What do they find interesting about their work/the field of law in PE?
I don't know anything about the law side of PE and I'm interested in learning.
Since I didn't get any answers I got in touch with a few legal teams at PE shops (1 MF, 2 MM, 1 small MM) and found out that most of what they do is corporate legal housekeeping. In the fundraising stage they help structure funding contracts. In terms of executing deals they can help with things like taking a company private or any other transaction related legal matters. That's where it got confusing and isn't really worth learning more about but I can expand if anyone's interested, though probably can't be too articulate.
At larger funds they have dedicated lawyers for specific companies held (e.g. John gets the fund's tech companies and Jack gets the fund's energy companies), while at MM and smaller funds the lawyers tend to do both in-shop work and also assist management at the acquired companies. The guys at larger funds who have specific company assignments function much like general legal counsel in a corporation. They don't report to the in-house lawyers, but rather work in an almost entirely flat structure.
As I'm sure everyone assumed it's quite rare for lawyers to make investment committee track but one of the folks I interviewed said it has happened at his firm (MM). That firm specializes in one industry. Based on my understanding of this–which seemed highly suggested from the call–is that their speciality in that highly regulated industry became an essential part of forming investment theses. Because I also used these calls to ask personal questions, it became apparent that the one lawyer who made the move was somewhat of an outlier in that he had some consulting related deal experience outside of IB before going to law school.
Although I did not ask, my observation is that there is no preference to being in-house vs. assigned to portfolio companies: it simply comes down to relevant experience and interest. Some lawyers might prefer to work on the transaction end of things while others might simply want to operate as general counsel, except do so for a number of companies on a fixed term basis.
In terms of career direction, 3/4 interviewees were unwilling to respond about future goals (shocking /s), but one noted that he hoped the experience would help him land a job in big law. This was the lawyer at the MF who hoped that his volume of legal deal experience would give him a leg up into getting into M&A law. He reasoned that because many lawyers in prestigious law firms often walk clients through the entire deal lifecycle, they often saw a fraction of the deals that he sees in PE. He hoped recruitment would work in a manner analogous to PE pre-MBA associate recruiting from IB: more deal exposure, more qualified.
The rest from here on out is speculative, but based on my interviews. The in-shop guys tend to have more unpredictable hours because they generally do more work post-deal. That said they often have more downtime between deals. The portfolio lawyers, for lack of better wording, tend to have more balanced hours because portfolio companies tend to have more reasonable hours (Is this true, or do hours get worse for employees once their firm gets bought by a PE shop?) compared to the PE shop itself.
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