Lateralling from Corporate Practice to Restructuring & Bankruptcy
Lots of junior and midlevel BigLaw corporate associates have seen their hours drop since the start of the pandemic. Some corporate associates may see future increases in workflow as parts of the world and the country come out of the pandemic. Others may not.
At the same time, there is a lot of discussion about potential demand in restructuring and bankruptcy practices at BigLaw firms. Even before the start of the pandemic, many firms were looking to fill needs in this area, as the work has evolved and broadened over the years considerably.
"Bankruptcy and restructuring" refers to the general practice of advising financially distressed companies; this includes the more informal process of negotiating on behalf of debtors and creditors, as well as formal court-ordered Chapter 11 restructurings and Chapter 13 bankruptcy filings.
There has been just a slight increase in the number of bankruptcy and restructuring associate openings over the past few months, but this is expected to increase over the next few months. According to an article from Bloomberg Law today, "a much larger wave of corporate restructuring is still a ways off." It takes a lot of time to plan a company's financial restructuring. Certain information that is needed to do that is currently unknown because of the pandemic-related shutdown, including revenue projections and the relative value of assets.
Still, I have heard from associates at law firms hired to work on a new major bankruptcy that the firm is looking to add attorney staffing to their bankruptcy group quickly -- either by moving or borrowing lawyers from other practices at the firm that are slow or through outside hires.
So how can junior and midlevel corporate associates prepare for a possible shift into this work? Here are some thoughts:
See if you can be staffed on any finance-related transactions or deals. If your corporate practice thus far has focused on areas like M&A, capital markets or private equity work, maybe you haven't had the opportunity to work on a finance transaction. This involves representing a financial institution or borrower in the lending of money. The broad term covers specialties like debt finance, specialized asset finance, leveraged finance and project finance. If you get the chance to work on deals that involve loan agreements, credit facilities and related due diligence, you are getting exposure and experience that can be helpful to a financial restructuring practice. In fact, some firms have designated "finance and restructuring" practices with attorneys that know how to do both.
Get together a deal sheet that is as comprehensive as possible. Now is a good time to look through your billing system and take full inventory of all the deals that you have worked on thus far. Have you worked on any finance transactions already? What about any sales or acquisitions of distressed assets? Was there a bankruptcy litigation case that you worked on as a summer associate? Any exposure to work connected to bankruptcy and restructuring will be useful for when you make a pitch to do the work later on. Particularly if you are a junior corporate associate, it is not expected that you have a lot of experience in any one practice yet. Interest and exposure is more important.
Talk to peers in the bankruptcy and restructuring group. Associates that are in your class year are often the best source of information when it comes to your career planning. There is camaraderie between attorneys peers at the same firm, and thus it is more likely that you will be honest with each other. They can let you know when they are overworked and the group needs help. Additionally, if your friend in the bankruptcy group lets you know that there isn't enough work to share at the moment, this is good intel as well. They can also provide inside tips on personalities and how to make the best pitch to the partners in the group.
If you'd be more interested in a "temporary" move to bankruptcy and restructuring work, keep in mind that there are ways to avoid being pigeon-holed into the work forever. You might be concerned about pivoting back out of the practice again if demand for the work drops during a future economic boom or it does not interest you. Here's how to address that:
If you move to a practice that leans towards the restructuring work, there is always the possibility of doing banking and finance law later down the line. During good economic times, there is strong demand in this practice. And because financial products are always changing and innovating, so is banking and finance law. Lastly, this type of work is great for making another type of future career move: corporate in-house lawyer.
If you move to a practice that leans towards the bankruptcy litigation work, this provides a great opportunity to develop strong litigation skills that can be applicable for other types of litigation. Additionally, in terms of future opportunities, there are lots of generalist litigation firms and litigation boutiques that do bankruptcy litigation work as just a part of a broad litigation practice. And these firms will still value the bankruptcy litigation training.