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Analysis
Growth in structured finance sets off legal merry-go-round
by Shant Fabricatorian
The departure of John Goldfinch from Milbank’s structured finance practice in late 2023 began a succession of moves between law firms looking to expand their structured finance practices
By their own admission, lawyer moves between firms are generally of interest mostly to lawyers. But the past 12 months have seen an unusual number of personnel moves in European structured finance law circles. High-profile transfers have left some firms strengthened and others much weakened, all as structured finance practices are viewed by law firms as offering important growth opportunities.
According to partner Sushila Nayak, who recently moved from Orrick to head up Dechert’s global finance group in London, there have been a number of key drivers for the moves. “The structured credit and CLO space is growing rapidly and we’re seeing increased synergy between EU and US markets, which creates opportunities,” she said. “There is [also] a drive to firms which have deep expertise, a strong global platform, and which are clearly committed to being a market leader.”
A number of legal sources that Creditflux spoke to highlighted John Goldfinch’s departure from Milbank’s structured finance practice in late 2023 as a catalyst for the current round of moves. Goldfinch took three lawyers with him, including senior associates Peter West and Adrian Kwok.
Milbank’s drive to rebuild and strengthen its team resulted in a successful approach to Alex Martin, a rising star at Latham & Watkins. Martin started at Milbank last August, bringing with him a team of four, growing Milbank’s senior structured finance ranks in Europe to their largest-ever size.
Increased synergy between EU and US markets creates opportunities
Sushila Nayak
Partner
Dechert
That, in turn, left L&W on the lookout for opportunities to rebuild its own structured finance practice. The firm confirmed in April that it had successfully recruited partners Franz Ranero and James Smallwood from A&O Shearman. With 11 lawyers in total shifting across, that move has likewise seen L&W’s team grow to a record size.
For Ranero, the structured finance space represents a significant opportunity for law firms that find the right combination of personnel and strategy. He believes the most important driver of growth is set to come from private capital.
“People refer to the practice and the team as a CLO team, but we’re so much more than that,” he said. “Much of our effort is in broader asset-backed structured financings, which utilise legal and structuring technology that are the tools of our trade as lawyers that participate in the CLO market.”
The key element in this, Ranero said, is that private capital funds are looking for more efficient ways to finance and leverage themselves. “What was previously quite an esoteric, complex, but isolated part of the broader ABS market, is now coming into the mainstream, and being utilised by the large private capital providers as a key tool in maximising their return levels,” he said.
Some firms have lost out in the shuffle. A&O Shearman, in particular, has been hit hard by the movements, with one partner at a rival firm noting their global practice had been “decimated”. The fact that the departures are across the firm’s US and European practices is significant, since multiple sources told Creditflux that a strong US presence was key to a successful European practice.
A&O Shearman was formed last May via the merger of London-founded Allen & Overy with its smaller New York counterpart Shearman & Sterling. It has suffered a major loss of structured finance expertise. In addition to the departures of Ranero and Smallwood from its London office, in May the firm saw seven structured finance attorneys in New York decamp to Sidley Austin, and two partners head to Proskauer Rose.
A&O Shearman did not respond to requests for comment.
