Private equity groups have sparked a boom in mergers and acquisitions activity in the past year, igniting a war for talent between the law firms that advise them. And although M&A activity has slowed in more recent months, because of the worsening economic conditions, the competition for staff remains robust because of the enduringly tight labor market.
It can be a highly rewarding career, financially speaking, with the top firms showing a willingness to reward their new recruits with compensation packages far beyond the norm for law school graduates.
A number of law schools run LL.M. programs with a focus on finance and corporate law, offering a route into the lucrative practice area of private equity for working lawyers.
At Georgetown Law in Washington D.C., students can specialize by enrolling on the LL.M. degree in International Business and Economic Law (IBEL). The program is designed for students interested in cross-border business. Candidates select courses from various disciplines, such as corporate law.
Caroline Springer, Assistant Dean of Georgetown’s Office of Graduate Careers, says: “Part of what makes practicing in this area fun is that you learn a lot on the job – there’s no rule book and there isn’t a ton you can do to prepare. But you can do things like reading up on the industry and following the news about the state of the market.
“It also never hurts to take an accounting class or other business course that will help you learn some of the lingo and start to get an understanding of how companies operate from a financial and business perspective.”
High demand for corporate lawyers
Deals worth more than $5.6 trillion were struck worldwide in 2021, the fastest pace of growth since the mid-1990s, boosting the demand for corporate lawyers in particular.
Such is the demand in this field that some top law firms are moving away from their traditional pay strictures to deliver a special bonus to their private equity lawyers. Freshfields, an international law firm based in the City of London, has paid some mid-ranking lawyers working on private equity deals about £50,000 in an additional pay-out, on top of the standard bonus paid to lawyers across the firm.
Karen Chao is a partner at global law firm Goodwin’s private equity practice, based in the New York office. Goodwin’s practice helps private equity firms to structure their investment funds and advises on acquisitions, sales, tenders and public offerings.
Chao says: “There are numerous law firms that work in private equity and it is a competitive space. Clients have a myriad of options [so] even historical clients can shop around, so it is more important than ever to be responsive and go above and beyond.”
What else can LL.M. students do to set themselves up for success in this practice area?
Chao recommends taking an “accounting for lawyers” class as well as a mergers and acquisitions course if available in law school; those will help set the groundwork with respect to common terminology and basic concepts that are required for learning the business of private equity․She adds: “Aim for working at a law firm that is focused on private equity and try to work on as many different types of private equity transactions with a variety of partners to get a broad base of experience.”
Duke Law, in North Carolina, has a deep bench of semester-long transaction and corporate law courses for LL.M. candidates, including Private Equity Funds, Corporate Finance, Business Strategy for Lawyers , and many more.
Learn from prominent legal practitioners
The LL.M. students can take additional short skills-based courses during the first week in January, before the second semester begins. They learn from prominent legal practitioners who work in cross-border M&A.
“It appears that there will continue to be significant demand for smart, creative, hard-working lawyers, especially those with appropriate knowledge and skills (including language) that can be helpful in cross-border deals,” says Professor Geoff Krouse, who teaches M&A at the law school.
He says that lawyers who are effective in cross-border deals tend to have sophisticated negotiation skills, an ability to think creatively, and a willingness to invest the time and energy needed to work through unique challenges with all parties in order to achieve a successful transaction.
“Having a strong command of the substantive law and meaningful knowledge of various elements of the deal process are also very important,” he adds.
In the spring semester, LL.M. students at Duke Law can complete off-campus externships with in-house departments of multinational corporations, or join one of the school’s 11 legal clinics.
Taking a contracts class or any specific course can be helpful to some extent, Chao explains. But most attorneys will learn as they gain experience on the job, so it’s not critical that a student take every business-related course available, she adds. “Students will probably gain a better experience participating in a clinic that allows them to have real-life exposure to clients and opposing parties.”