‘The industry has changed massively. When we started, we were working with single product mid-cap PE shops, and these have now developed into mega solo funds, handling tens of billions of dollars. We’re now working with listed clients and multi-product funds that not only have a PE business, but a credit and an infrastructure business,’ says Kirkland & Ellis London private equity partner David Higgins, on the huge changes in the private capital market.
As single strategy private equity funds have morphed into huge multi-asset private capital firms and alternative asset managers over the last 10-15 years, the role of the lawyers working with them has also changed beyond recognition.
‘When I started out, the vast majority of private equity clients didn’t have a lawyer, and the ones that did had a single lawyer,’ muses Skadden London head and private equity partner Richard Youle. ‘Fast-forward to now – if you look at financial sponsors, who falls within that bucket and what the different strategies are, it’s kaleidoscopic.’
‘It’s really evolved over the past 15 years,’ adds Alex Woodward, co-head of the global financial sponsors sector at Linklaters. ‘The bigger teams [that PE firms] have created are almost like mini law firm teams. It’s not uncommon to have six or more people in these large funds now.’
In Legal Business’s new Private Equity Elite, researched in conjunction with the Legal 500, we have identified 24 of the leading London-based GCs at the helm of some of the legal teams within these high-profile, lucrative organisations [click here to view the full list]. Here, we shine a spotlight on these GCs and the journey of transformation they have led their legal teams through.
Building out
Private equity has come a long way in London since the pioneering days of firms like 3i, CVC and Permira, with US heavyweights like KKR, Blackstone and Carlyle piling in more recently to set up shop and capitalise on London’s position as a major European hub.
Recalling the changes she has seen since joining KKR as its first lawyer in Europe 15 years ago, KKR managing director and GC for Europe Susanna Berger says: ‘When I started in the industry, PE was entirely unregulated. Regulation only came in shortly after I joined, which was right around the time when KKR became a listed company. Transactions have also become more complex – you have more capital chasing more complex deals – particularly in infrastructure – and regulators are picking up on all of those. The industry and the job have very much transformed.’
‘When I joined, I was the third lawyer ever hired by CVC, and when I left there were ten permanent lawyers. Everything got bigger and more regulated.’
Lauren Livingston
Former CVC GC Lauren Livingston’s time at the firm enabled her to track the growth of private capital first-hand in a similar fashion. She joined the firm as a legal director in 2007, and by the time she left at the start of 2024, it was unrecognisable. Following her departure, the buyout house brought in former Allen & Overy litigation and restructuring partner Brechje van der Velden as its new GC shortly after listing in the Netherlands in April.
‘When I joined, I was the third lawyer ever hired by CVC, and when I left there were ten permanent lawyers,’ says Livingston. ‘During my time, our funds grew from around €20bn to €120bn and our offices increased from nine to 25 by the time I left. Everything got bigger and more regulated. When I joined we were regulated by two regulators – when I left it was more than six.’
Melanie Sanchez, global general counsel for investments at Ontario Teachers’ Pension Plan (OTPP) shares a similar story. ‘When I started ten years ago, we had 16 lawyers in total with only one lawyer outside of Toronto. We realised that to enable our lawyers to truly partner with our investment teams and support deals on the ground, we needed to build out the team globally. We are now a team of 35 lawyers spread across Toronto, London, Hong Kong and Singapore.’
But it isn’t simply that the legal teams have grown in number and geographic reach as houses and deals have become more international – the way they operate has also evolved, and is continuing to do so.
Heather Mitchell, partner, chief risk officer, head of EMEA and global general counsel for Investments at Carlyle, initially joined the firm as a legal counsel in Washington DC in the early 2000s, becoming EMEA GC and relocating to London by 2005. Not only has Carlyle’s internal legal team transformed under her leadership, some of the processes introduced there have been adopted more broadly by private capital houses in London.
‘At Carlyle, I created [the in-house investment GC] role as it is now,’ she says matter-of-factly. ‘We were the first mover in a number of ways – we built market shock systems and portfolio reviews. Now many of the other houses have followed suit – I feel very proud of what we’ve achieved.’
For Mitchell, the change in the Carlyle legal group started with trying to ensure that all of the deal teams were taking a uniform approach to transactions globally. ‘We initiated a significant programme with Ropes & Gray around The Foreign Corrupt Practices Act to make sure the firm was looking at everything through the same lens globally. Then we moved onto portfolio reviews, bringing in a semi-annual review for portfolio companies and then we introduced our market shock system, which is really a snapshot of exposures across the firm and its portfolios.’
Strategic thinking
The transformation of the GC role in the industry also extends beyond a more sophisticated and joined-up approach to cross-border transactions.
The wider shift that has seen GCs in many businesses take on a more strategic, commercial position has also been mirrored in the world of private equity. Fairly or not, GCs have historically struggled to shake off a reputation as technically savvy but distinctly uncommercial – and sometimes even viewed as deal-blockers rather than dealmakers.
But in a deals-driven industry, being regarded as a hindrance simply isn’t an option, and PE GCs are keen to stress that the sheer volumes of deals their teams work on gives them a unique insight into how to get transactions through that other parts of the business do not have.
‘We aim to position ourselves as business partners, not obstacles, and focus on finding creative solutions,’ points out Berger. ‘We have very broad exposure across transactions, which allows us to draw on past examples and best practices to offer valuable advice to our deal teams.’
Nowadays, GCs like Berger regularly work closely with the C-suite, sitting at the heart of not just the dealmaking process but corporate strategy. Indeed, even in the London outposts of major US buyout houses, UK-based GCs are very much in the driver’s seat.
‘It’s no longer a back-office job (to the extent it ever was). It’s a role that deservedly now has a seat at the table, at the highest level within the organisation,’ says Victoria Sigeti, a private capital partner at Freshfields Bruckhaus Deringer. ‘And that’s absolutely right,’ she adds. ‘As the bigger private capital firms expand across product areas and geographies, and the regulatory landscape evolves, they are building up bigger teams underneath them.’
On what the role now requires, Apollo Global Management partner and GC – International Seda Yalçinkaya says: ‘You need to go beyond the law and understand the investment priorities; you need to be numerate and understand corporate finance/financing requirements; and you need to be involved in the lifecycle of the investment and the key developments of a portfolio company all the way to exit.’
Below GC level, the increasing scale of the firms, and the complexity of the transactions and regulatory landscapes they operate within, means many lawyers in these teams are becoming more specialised.
‘There has been a trend towards building out in-house expertise in the areas of disputes, ESG, data and privacy, global regulatory compliance and private/public debt,’ says OTPP’s Sanchez. ‘A lot of funds are developing strategies for tackling these broad and sometimes unwieldy topics.’
‘Some of the most powerful GCs in the industry are not M&A lawyers, they’re securities litigators.’
David Higgins, Kirkland & Ellis
Similarly, at Bridgepoint, for example, the internal legal team now has three transactional lawyers, including a credit lawyer who joined within the last two years, one lawyer dedicated to funds and one dedicated to management work, as well as two senior lawyers and partner and group GC Rachel Thompson overseeing the team. The firm also has several compliance professionals, a cosec and a number of secondees from law firms in London, as well as lawyers on staff in Luxembourg.
‘Private equity and other alternative firms are significantly more regulated; as are their fundraisings and the transactions they undertake. This provides more opportunities for lawyers to enter the industry at an earlier stage in their careers, and more paths they can then take to develop,’ says Vitruvian GC Chris Bulger. ‘Working at a private equity firm can also provide more opportunities for lawyers to get involved in other areas (such as HR, operations and tax), than might be the case with other in-house roles.’
Milbank London private equity co-head Jordan Simpson comments: ‘We’ve seen sponsors get bigger and more complicated, strategies multiply, and regulation continue to expand, and with that, we’ve also seen leading GCs redefine what’s expected – and what’s possible – in the role. So while the challenge is much greater, there’s now also much greater opportunity.’
Bain Capital Europe GC Will Rosen adds: ‘While historically the model has been more generalist, over time I suspect firms will develop and build increasingly specialised functions that focus on certain specific areas.’
As Milbank London PE group co-head Andrej Wolf sums up: ‘We’re now seeing tremendous diversity in some of the most sophisticated in-house teams – not just in terms of practice area expertise, but also in wider background and perspective. The breadth and variety of career opportunities for the next generation of in-house leaders looks really exciting.’
New directions
With the industry continuing to mature and regulatory pressures mounting, both private practice and in-house lawyers believe that the private capital GCs of the future will require a different skillset than their transactional forebears. This will be particularly true for those houses choosing to list, which will need to be more aware of risks such as litigation and antitrust – a trend underlined by CVC’s recent appointment of van der Velden.
‘I think that the next cycle of GCs for the big, listed or multi-strategy funds will probably be more litigation-based or risk-based lawyers,’ predicts Kirkland’s Higgins. ‘It’s so much broader than when we started. PE funds didn’t really have to worry about regulation. They were buying manufacturing businesses in Birmingham and things like that – they didn’t have to worry about antitrust or sustainability.’
‘Those more traditional roles – the M&A and the capital markets financing folks – they’re still there,’ Higgins continues. ‘But it’s not just a deal machine. Some of the most powerful GCs in the industry are not M&A lawyers, they’re securities litigators.’
As Bridgepoint’s Thompson comments: ‘It’s a completely different job to the one that I started as a transactional lawyer. Then, I was sitting with the deal team, shadowing them and supporting transactions, but that’s only 5% of my time now. Now it’s mostly management topics – fundraisings, strategic projects, compliance, regulation – there’s a bit of everything needed in your skillset.’
This means that, while in the past, most lawyers coming into PE houses had an M&A background, this is changing. Whatever the practice background, what’s more important is an ability to rapidly react to changes in the industry and the markets and pivot to the challenges ahead.
As Thompson concludes: ‘As PE houses expand into other strategies, the role has to become more fluid and flexible – you need people with the skillset to integrate business and spot risks. We’re looking for the same smart, driven people as in a law firm, but also very commercial and flexible. You need to be adaptable and pragmatic and know when good is good enough; when you have to just accept what you’ve got, as not everything needs to be 100% perfect.’ LB