Lawyers In The Private Equity World

Most lawyers are intrigued by the idea of going in-house, but many do not realize that the opportunities to do so are not only at large, public companies.  Many of our clients are private equity-owned (“PE-owned”) portfolio companies that are in the small to mid-cap space, and they can offer great opportunities for lawyers looking for an exciting challenge and a chance to broaden their skill set.  Working at a smaller, PE-owned company is not for everyone.  Consider the following points:

1.  Embrace the perceived risk and the anticipated reward of joining a portfolio company.

If you like the idea of large, public companies that can map out your career trajectory and show you their historical stock performance, then PE-owned companies may not be the right fit.  If you are looking at a small company or start-up, you need to embrace the risk that the company may not last forever.  By the same token, you need to see the opportunity and visualize the reward you can obtain by working at a company that is in growth mode – you can help build the legal team; you can help take the company public; you can help the company succeed.  If that does not excite you, it may not be the right fit.

One of our clients is a start-up life sciences company that is currently PE-owned and ultimately wants to go public – the upside is exciting, and the lawyers there know it!  They get to be at the forefront of the company’s growth and strategy development, and get a front row seat to the upward trajectory of the company.

2.  A generalized skill set or at least a willingness to handle a variety of work is essential.  

One of our placements was a lawyer at a PE-owned portfolio company and she serves as the lead and only lawyer.  She needs to be a generalist on a daily basis, handling commercial contracts, transactional matters, HR issues, employment matters, and litigation.  The smaller portfolio companies are often lean on legal staff – remember that lawyers are viewed as a cost center; therefore, the more you can handle, the more you are valued.

Big ticket, bet-the-company litigation is being outsourced, so these companies are typically looking for a lawyer with a strong transactional background to come on board.  You need to acknowledge and be excited by the fact that you will be working on a variety of matters in a fast-paced environment.

3.  Getting close to the portfolio business and the management is key to your success. 

You need to have the ability to interact closely with the business and perhaps the PE management team.  At a mid-cap or small portfolio company, there is no place for the lawyer to hide.  You cannot be in the corner office closed off from your clients working in a strictly niched area.  Rather, you have to be comfortable  working with the business, understanding the nuances, and furthering the business objectives.

In a recent search for a corporate lawyer to join a  PE-owned company, the lawyer who ultimately got the job was someone who stepped away from Big Law to join a portfolio company earlier in her career – in that experience, she learned how to interact with the Board and management, and understood the goals of the PE firm.  She understood that the management team does not want a ten-page memo of options for every legal issue.   In an environment that is fast-paced and leanly staffed, the PE lawyer has to be nimble, pragmatic and business-minded.

When evaluating career paths, a private equity owned company may be a viable career option.

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