At Harvard Law and interested in working in distressed debt, possibly activist investing -- best route? (cross post from job forum)

Cross post from job forum

So I'm a 1L at Harvard Law, and have spent a few years as a paralegal and this past summer as a summer associate (via SEO). I loved the restructuring group, and enjoyed (and am looking forward to exploring) activist shareholder defense. After talking with a friend in the industry, I've become interested in the possibility of working at a distressed debt fund or perhaps an activist investor fund. As I understand it, a legal background can be really helpful for RX/distressed debt work, and I guess theoretically for activist investing (exploring contract covenants for prospective investments).

Anyways, it seems like there are actually a few HLS grads in finance, hedge funds included. I'll surely get a good understanding of the legal aspects of these industries during my time as a law student, but coming from a liberal arts background I'm wondering what I can do to gain some knowledge on the finance front. Also if its really even possible / worth pursuing.

So I'm a 1L at Harvard Law, and have spent a few years as a paralegal and this past summer as a summer associate (via SEO). I loved the restructuring group, and enjoyed (and am looking forward to exploring) activist shareholder defense. After talking with a friend in the industry, I've become interested in the possibility of working at a distressed debt fund or perhaps an activist investor fund. As I understand it, a legal background can be really helpful for RX/distressed debt work, and I guess theoretically for activist investing (exploring contract covenants for prospective investments). 

Anyways, it seems like there are actually a few HLS grads in finance, hedge funds included. I'll surely get a good understanding of the legal aspects of these industries during my time as a law student, but coming from a liberal arts background I'm wondering what I can do to gain some knowledge on the finance front. Also if its really even possible / worth pursuing. 

Comments (35)

  • Prospect in Legal
2mo

I have never been a lawyer, but from the ex-lawyers I know these are the most common routes:

Lawyer > Banker > HF financial analyst

Lawyer > HF lawyer > HF fin an

Less common but still know ppl that did this:

Law school > Banker > HF fin an

Lawyer > sell side desk analyst > HF fin an

Lawyer > legal only fund like Aurelius

  • Prospect in Risk Mnmgt
2mo

To be clear, the ex-lawyers I know in the industry represent a very small subset of the population. The flip side is that junior restructuring lawyers are a strangely self-defeating group that seem to exit law only when they're sick of it, as opposed to exiting on their front foot with a plan like most bankers do. I'm sure you'll have an easier time if you start prepping early for the possibility of going to the business side.

2mo
luxetjustitia, what's your opinion? Comment below:

Yeah I've heard that some of those are common. There are a few that go straight into funds, some of which have joint MBAs so maybe that's worth considering. I don't think HF lawyer > HF makes any sense. Doing compliance and fund formation work all day just to be physically close to where you want to be doesn't seem very sensible and makes a fraction of biglaw salary. IB does not sound enticing to me, based on what my analyst and associate friends have said. Outside of modeling, a lot of it seems somewhat similar to consulting (which I am more than happy to be proven wrong about). The exit opps from associate also seem to not include buyside spots. Also the lifestyle and hours are just insane, I'd choose biglaw over that. 

Really curious about the possibility of going straight in. Idk if going to HLS will hold any water when it comes to cold emailing, etc. Spent last summer in RX, will likely split this summer between RX/shareholder activist defense, and my 2L summer I'd love to spend at a fund. I know HLS people have ended up at DE Shaw's activist fund, Aurelius, Elliott etc. 

  • Prospect in Risk Mnmgt
2mo

That's not what I'm talking about when I say HF lawyer. I mean the guys who spread docs, analyze potential transactions from the legal side, and sit in BK processes offering their analyses on potential paths forward. They did this analysis at Paul Weiss / Akin / DPW, and were then brought in-house.

If a bunch of distressed funds and activist funds are actively recruiting HLS to be business analysts, then all the options I mentioned should be backup plans for you. The point of doing banking is to show funds that you can be a numbers guy (however dumb that is, given that we're not exactly working with Markov chains here). Out of the ex-lawyers I know / have worked with, I don't think a single one directly became a business analyst at a fund without some stuff in between. 

  • Prospect in Risk Mnmgt
2mo

Your friends are also very wrong, restructuring banking does very different work from FTI / A&M. Plenty of associates have moved into distressed land from IB, especially guys who started their careers elsewhere (consulting, the HL valuations group, etc.).  

2mo
survivormanfinance, what's your opinion? Comment below:

As a lawyer who has worked in this space (credit, lev fin, restructuring) for years, I'd recommend either getting an analyst position at a bank, which is doable, or trying to go straight to a fund in an investing role. Honestly you won't learn much at law school on the legal side that is relevant to HF work, but coming from HLS is a plus so I'd try and leverage your connections to get something on the sell side to begin your career. Teaching yourself / learning 3 statement modeling in excel couldn't hurt either. Another possible path is to join a firm that has a public company advisory group advising boards and shareholders in activist matters. If you can get a job at Wachtell, I'd say do that. Otherwise, I think banks / direct to HF is your best bet.

Most Helpful
  • Associate 2 in PE - Other
2mo

I'm a lawyer in an investment seat at a 5bn+ distressed hedge fund. 

You want to take the following path:

1L Summer - Restructuring IB summer associate.  

2L Summer - Summer associate at Apollo or another PE style Credit seat, lean into diversity programs since you are SEO eligible.  In-school try to do as much HF internships as you can. I'd lean doing PE style over HF for the summer as training will be better and you will need it.
 

I would strongly consider doing a Harvard MBA.  You can still apply as a 1L and the exits improve with the extra summer.
 

Additionally I would start emailing as many HLS or lawyer alums at distressed funds as you can, especially once you get a restructuring summer associate seat at a bank.  I have lifetime been cold emailed by 3 total law students so always willing to take those calls. A ton of distressed / event type AuM is run by ex-lawyers or senior lawyers working in investment seats so firms institutionally are open to that background you just need to be generating experience and at bats for interviews.  
 

Also reach out to the older people at HLS who have done distressed internships, I know of a few.

For avoidance of doubt - this is  focus on directly to buyside is applicable to Yale, Harvard, Stanford, maybe Chicago / Columbia / UPenn (JD / MBA preferable for the back end).  If you are taking this approach from a worse ranked school, you are going to add a ton of risk to your law school job outcome and should be targeting sell-side rather than buyside.  NYU is an odd one because its law school is better than its undergrad / MBA by a decent margin so slightly harder for finance recruiting. 

There are probably a few outlier schools that may yield buyside options (UCLA / Minnesota) due to regional market having a ton of decent credit / distressed seats with a lack of competitive regional MBA  programs but focusing on making it to banking / biglaw should be the focus first there.   

2mo
luxetjustitia, what's your opinion? Comment below:

Super helpful advice. This summer I'll likely be at Kirkland (top RX firm and top shareholder activism defense firm), I think banking may be past due rn and I cannot model rn. Mind pm'ing me? Would def like to email and have a chat if you're open to it.

  • Intern in IB-M&A
2mo

I have lifetime been cold emailed by 3 total law students

Is that normal? Seem so low given how much WSO harps on about the benefits of networking

  • Associate 2 in PE - Other
2mo

I have lifetime been cold emailed by 3 total law students

Is that normal? Seem so low given how much WSO harps on about the benefits of networking

I get the occasional non law reach out but less than 5 a year and only when my old fund was recruiting aggressively.

To be fair I didn't do IBD so I'd assume that's where a lot of people would reach out trying to break in.

1mo
monkeyloo23, what's your opinion? Comment below:

Hey A2, I'm 2nd year attorney making an imminent decision between a standard BB associate role and a well known RX boutique. Could use some advice on this move.

Would it be okay if you PM'd me? I don't think I can reach out since your comment is anon. Thanks so much if you can.

2mo
jamesbaldwin, what's your opinion? Comment below:

Ea veniam qui repellendus saepe nulla velit sed consequuntur. Asperiores nam aspernatur dolore quis. Ut rem dolore est odit et accusamus ex. Quod debitis quas vel praesentium modi est beatae. Voluptatem dolorem vel delectus tenetur illum et.

Eius ut velit consectetur impedit accusantium numquam ut. Distinctio quia distinctio commodi inventore culpa sunt quasi est. Perspiciatis velit ad minus aut ratione labore. Exercitationem consequatur corporis aut atque et sed. Dicta fuga quibusdam ex alias. Vel quia eos aperiam error.

Dicta nihil adipisci magni enim. Deserunt totam ducimus et et dolor. Cupiditate officiis mollitia velit voluptatum placeat non praesentium. Aut ut officiis voluptatum. Qui officia possimus maxime distinctio.

Ea vel dolore in. Laboriosam qui vel ut doloribus eos. Harum repudiandae iure at magnam est modi non.

25d
andrewlim1, what's your opinion? Comment below:

Deserunt id omnis sed qui. Officiis expedita delectus quia. Corporis modi quisquam non in perferendis.

Est iste ullam enim eos rerum. Et est accusantium qui.

Ut in et dolor dicta voluptatem minus. Nam omnis doloremque cupiditate aliquam rerum cupiditate explicabo. Dolorem omnis optio quia quo. Ad ipsa distinctio veritatis necessitatibus corrupti quisquam.

Start Discussion

Career Advancement Opportunities

December 2022 Hedge Fund

  • Point72 98.9%
  • D.E. Shaw 97.9%
  • AQR Capital Management 96.8%
  • Citadel Investment Group 95.8%
  • Two Sigma Investments 94.7%

Overall Employee Satisfaction

December 2022 Hedge Fund

  • D.E. Shaw 98.9%
  • Magnetar Capital 97.8%
  • Blackstone Group 96.8%
  • Citadel Investment Group 95.7%
  • Millennium Partners 94.6%

Professional Growth Opportunities

December 2022 Hedge Fund

  • D.E. Shaw 99.0%
  • Point72 97.9%
  • AQR Capital Management 96.9%
  • Citadel Investment Group 95.8%
  • Blackstone Group 94.8%

Total Avg Compensation

December 2022 Hedge Fund

  • Portfolio Manager (9) $1,648
  • Vice President (22) $464
  • Director/MD (11) $434
  • NA (5) $306
  • Manager (4) $282
  • 3rd+ Year Associate (23) $275
  • Engineer/Quant (63) $269
  • 2nd Year Associate (29) $251
  • 1st Year Associate (71) $192
  • Analysts (213) $178
  • Intern/Summer Associate (20) $130
  • Junior Trader (5) $102
  • Intern/Summer Analyst (236) $85