Paul Hastings is hiring an 11-partner restructuring and finance team headlined by the former leader of King & Spalding’s private credit and special situations group, Jennifer Daly.
The latest hires, which Paul Hastings chair Frank Lopez said will total about 20 lawyers, further bolster Paul Hastings’ fast-growing finance practice. The group has gained momentum alongside the buzzy growth of private credit markets, seen as an alternative to traditional bank lending.
Finance and restructuring practices work hand-in-hand, and Paul Hastings has focused on growing both in recent years, including through its 2022 mass hire of the former Stroock & Stroock & Lavan restructuring practice. In February, the firm added an eight-partner finance group from Vinson & Elkins.
The investments are adding to the firm’s top line. Financial restructuring revenue last year grew 90% from the previous year, Lopez said, without providing figures. And the firm’s finance practice saw revenue up 30% in the first quarter this year compared to the first quarter of 2021, which Lopez said was a record transactional market.
Daly and the team joining from King & Spalding represent clients including private credit funds, special situation and opportunistic funds, hedge funds, and other investment advisors. Daly has focused on direct lending transactions, representing financial institutions and borrowers in a range of financings. She’s represented clients that overlap with Paul Hastings, such as Blackstone and KKR.
Jennifer Daly
Other King & Spalding partners moving to Paul Hastings include Roger Schwartz, Matthew Warren, Christopher Boies, Zachary Cochran, Peter Montoni, Geoffrey King, Lindsey Henrikson, Robert Nussbaum, James Gallagher and Jack Fitzpatrick.
“They are dynamic and stellar with an incredible reputation representing a lot of the same premier clients we represent already,”Frank Lopez, chair of Paul Hastings, said in an interview, adding he views the firm as building one of the “leading restructuring and finance platforms in the world.”
Daly, Schwartz, Boies, Montoni, Nussbaum, Gallagher and Fitzpatrick will be based in New York. Warren splits time between Chicago, where he will be joined by King and Henrikson, and Houston. Cochran will work out of the Washington, D.C., and New York offices.
Daly rejoined King & Spalding in 2017 after serving as chief operating officer and chief compliance officer of New York hedge fund Hunter Peak Investments.
‘Undeniable Momentum’
The growth of Paul Hastings’ finance and restructuring practices was attractive, Daly said in an interview. Her team had clients that already worked with Paul Hastings, making the move more comfortable, she said.
“If you are any kind of finance or restructuring lawyer, when you look at the platforms that are available for your clients, Paul Hastings jumps off the page,” Daly said. “The momentum they have right now is simply undeniable, and they’ve made actual concrete investments to tell the market that they want to be best-in-class at exactly what we do.”
While Daly said “private credit is here, and it’s here to stay,” she also said traditional banks will maintain an important role in financing markets. Part of Paul Hastings’ appeal was its “deep, historical relationships” with banks, she said.
“The ability to play a part in building a top-of-market offering to all financing producers is just equal parts humbling and compelling,” she said.
Traditional bank lenders have been looking to bolster their private credit offerings, with Bloomberg News reporting JPMorgan Chase & Co has been seeking to buy a private credit firm. Goldman Sachs Group Inc. recently raised $21 billion for a direct-lending fund.
Meanwhile, Jamie Dimon, the JPMorgan chief executive officer, said he expects problems in the private credit market, potentially arising from exposure to retail clients, Bloomberg reported.
On the restructuring side, new Paul Hastings partner Warren said private credit funds are beginning to face their first cycle of distress.
“There are pieces of going through a distressed cycle that are brand new and will be brand new to private credit lenders,” Warren said. “From where we sit, Paul Hastings is uniquely qualified and positioned to be offering the different experience and expertise in all aspects of working out a distressed situation.”
The King & Spalding group joins roughly a year after Paul Hastings made a splash hire of three finance partners in New York from Cahill Gordon & Reindel. In February, the firm hired former Shearman & Sterling finance partner Stephen Gruendel.
Lopez said the firm now has a two-year track record of investing in its finance and restructuring practices. The hires are generating more revenue and high-profile matters, he said, including creditor-side work in the bankruptcies of FTX and WeWork.
“It’s been incredibly accretive from a finance perspective,” he said. “And we believe the quality of the talent and the quality of the matters and clients we’re working on has really driven our reputational elevation.”
