Monday, September 26, 2011

Lifespan of a CML

A lawyer once told me that he saw his career split into several stages:

  1. Document stage: when you're a junior, you review docs, you do diligence, you draft
  2. Lawyer stage: as you become more senior, you negotiate, you deal with other lawyers across the table and under you
  3. Client stage: as the boss, you deal with clients, you get clients, you maintain clients
Maybe in the older days. I think now its more like:
  1. Document and Shit stage: yes you do start witha lot of docs. but you also start wiht a perpetual, paralyzing fear that you are never good enough, you have to get things down two hours ago all the time, and so, undoubtedly, shit ur pants.
  2. Client, Lawyer, Document and Shit stage: let's b serious. u alwys look at docs. u always end up drafting. i've seen even junior partners draft. u also now deal with other lawyers, lawyers above you, lawyers below you lawyers across from u from across teh world even. its a fucking lawyer orgy. and clieints. dont get me started. they go apeshit at the drop of a hat. at u. because they cant fuck with their good old friend the partner. there's gotta be a sscape goat. o i should call this the scapegoat intensive stage. and for al these reasons, you STILL shit ur pants.
  3. Boss stage: no one watches over ur shldr anymore. u dish shit off and do whatever the fuck u want. call corporate. get raises. do coke. buy a gun. shit on peoples' desks. chpo ur balls off. fuck a fish. turn into a rocket. fly into the sun. y? cuz u da boss! its true dude, i saw it.

Friday, September 16, 2011

Lawyering 101: Basics for the cap mkts corporate monkey lawyer

i am no cap mkts lawyer, nor do i aspire to be one. god no. altho with the mkt in the crapper these days i wdnt mind. nor am i really an ma attorney. fuck im not even really a lawyer, at least not at heart. not many people are i think.

however, i have done the soem o the shit that they do so kno a bit about what its like to be one. i wrote about it before. oh this hole blog is about it isn't it. well. in this series of posts, im hoping to inspire young wannabe cmls to actually, really, understand wat these lawyers do. for better or worse.

cap mkts, as ive said, is kinda like a meat grinder. u throw a bunch o random shit into a big funnel and subject that shit tos ome serious cranking - pressure, torque, some random rich dudes pube-laden beer belly as he turns that crank over an dover, and out comes some formulaic grade a shit. in real terms, i'd say that whole process is broken down like so:

  • disclosure preparation phase
  • documentation phase
  • execution phase
whether ur working on debt or equity, its still the same, just some parts r more exaggerated. and dependon how fast that unclefucker is turning the crank, these phases will overlap a lot or a little. 

in phase 1, u prepare a disclosreu doc, like a prospectus or offering memorandum or soemthgn. there's "dd" involved. let's jsut get this straight, when jr associates do "dd" for capital markets, despite what u hear and what u read in ur guidebooks, u most of the time go and sit in a room at the company (which is hopefuly located in paradise) and flip thru pages as quick as posisble for a few hours. go have drinks or a meal with the co. dudes who dont care who u r but like that ur young and a' 'gogetter' and get u drunk and u end up in a pile of feces or vomit or both in some gutter in zurich with a horse fucking prostitute peeing on u, from her horse. repeat for a week. or if ur have an e data room, u just do all that from ur desk. cant rememebr a single time something i noted in dd actually affected or made a difference int he disclosure. the real 'dd' is management dd, where the banks and the seniro people talk tot he companh and just ask them questions - 'is the company ok? r u lying to us? ur not just making up these numbers right?' and thecompany will say yes because it wants money. there's a lot of back and forth on the document, as a junior u end up just transcribing comments, scannign stuff, reading about things that m ake ur eyes bleed and the blood from ur eyes cry. yes, that's crying blood from ur eyes. look at any book when its done, kits still riddled with errors and shit, no one gives a shit. its a 'cya' doc. lawyers job is to put as much risk averse shit in there so that their client doesnt get sued. or loses. (first hign i learned tho on the job was that for 144a/reg s deals, and especially reg s deals, no one ever sues. awesome.) bankers job is to make the book sound good so it sells well. honestly, they can't write so they often delegate taht to the lawyers...conflict of interst much? anwyay, they sell everyting on the roadshow anywayher where they say watever the fuck they want. 

in phase 2, documentation, lawyers draft all the docs. there's usually a purchase agreement for buying the stufff from the company, then there are all these random things that banks get with the deal. comfort letters from auditors. legal opinons from counsel. arrangement letters for auditors. rep letters from banks to auditors. (audtiros suck byt he way.) and any ancillary docs - sometimes there are pledges, lockups, blood letters, blah blah. agreements among underwriters. here's a tip - a lto of this stuff is in standard forms - try to get peopel to sign up to that. like AAUs can just be incorpoated by reference. sometimes banks alreayd have signed master ones between them. sometims banks have agreed forms with auditors. rep letters are basically cut n paste. no one cares about legal opinons. no one reads comfort letters in the end. dont sweat it. my philsophy, this is just cya too - make the docs good enough so u dont look stupid when someone else goes back to look at it later - who will undoubtedly be some other cml. 

in phase 3, execution, its just being on top of the ball. i get like hudnreds or thousands of emails in the period beetween launching, pricng and closing - usuallly this happens in 2 weeks. it's all chasing paper. i wrfote abotu this before. 'throwing turds' i like to call it. at closing usually u ahve like a billion certificates and shit that need ot be delivered and someon has to sign that shit. of course its the lawyers job to make sure it goes right. company people dont care and will get pissed off at u if u dont tell thme. ay yes, that's the rub. no matter what happens. in these daeals, banks and issuers just dont give a hshit. it so formulaic - the process - the docs - etc., that u dont get any respect for the monkeying that u do, yes lo skill, but also lot of shit to deal with. and they just get angry if little things dont go ur away. the angriest ive seen someone get on a cap mkts deal is when one banker changed the position of another banks name on the cover. they were rip shit. at us. super. 

as for timing, in ipos, the first phase is really long because for some reason its more important. the next two phases r still there but take a backseat. for debt, usually it all accelerated so maybe eerythign in a month or two, depending on other stuff. whent he disclosure doc is all done, u 'launch' the deal. launch means banks go on a roadshow. usually 10 days or something. when that's done u 'price'. thats when u stay up and sign the purchase agreement, because it take s 12 hours usually to finagle a price by 0.1% which is based ona table anyway and then to 'sign' something. awful. then usually one week later, sometimes sooner, u close. which is when bonds r issued. the delay is really only to give laweyrs the time (barely) to do everyting. u shld just copy and paste this into ur capital markets final exam and see wat ur prof says. A+ all the way baby!!



Tuesday, September 6, 2011

Multitasking & Billing

I remember one morning i was in the office on a weekend and saw my buddy there. he looked like a crack whore zombie witch troll. he said he'd been up all night. anyway, we were just chatting and we ended up talking about billing and shit. and when i asked him when he pulled an all nighter whether he bills 12 hours to one day and 12 hours to the next or just 24 on one - he kinda chuckled and said when he was putting in his time just now  for the 'day' but the system kept rejecting it. then he realized he was putting in 26 hours of time lol.  just goes to show u how desperately accurate and precise lawyers are when it comes to the getting the details right.

seriously though, what do u do when u r really multitasking? im pretty sure basically every firm has an official party line about multitasking/doublke billing or something like that, because u can never really be working on two things at once. or can u.... fuck if u bill the time it takes for u to take a piss, why not the time u r working on something else? like what if u r listening to a conference call, and working on a document at the same time. u dont need to realy participate on he call, just listen sometimes. be aware of what happens. chime in occasionally. what do u do? u cd try n parse out how mcuh time u actually 'particpated' on the call, and ho w much time u were typin g away. what about when ur doing both? what bout the fact that if u had not been on this call, u probably clda been making better use of ur time doing soemthing else? the best way to do this i think wd be to bill the time u were on the call, because u were responsible the whole time, and then bill the time u think u spent working on the doc. this isnt earthshatering. im sure uve ll been on that situation where ur on a cal with a partner, and they r sitting there on this call, working on something else, checking their email, surfing the net, opening their regular mail, reading a book, answering their cel phone, marking up other docs, whatever, and then some question comes up for them, their ears perk, and they go "sorry can you repeat that?" how do u think they bill this time? right. so ur just following in the glroius footsteps of ur role models here. there r lots of other situations where this comes up too - like working when traveling, working while reading, responding to emails in between working on somethign else, answering calls when working on something else. its not practical to switch timers everytime something happens, and u may well still be thkning about x whil u r doing y. so ur basically billing the time ur mind is in the game and ur body is engaged, whetehr or not they r focused on the samme thing. its not somethign u need to do consciously, i mean look at poor crack whore who billed 26 hours in a day, obvioulys he went thru added up the time he spent on the things he did, and he basicaly put in more hours worth o work than our feeble einsteinian time-space reality can account for, so he handled it the best way he could. the fact is, if u ask any two monkeys to do a task x, whether or not the multitask, they will both forecast and end up billing two different times for what they do, abnd both cd be equally justified.  this post is intendd to be just an attempt at making this blackbox phenomenon a bit more transparent, and i think there r two takeaways - 1. dont be afraid to multitask if it will boost ur efficiency, 2. u can bill that shit.  hell im on a call right now.

when in doubt, remember: role models