Editor: Please tell our readers about the origins of the firm, your various practice groups and very significant bench strength of your lawyers.
Bryant: I founded the firm on January 1, 2009 with the goal of creating a boutique law firm with great lawyers, sophisticated practice capabilities and great pricing. Prior to starting the firm, I had been Of Counsel in the New York office of DLA Piper. Like many lawyers at big firms, I felt a lot of pressure as a result of the firm's rate structure. It was clear to me that my urban-focused, middle-market practice diverged from DLA Piper's goal of developing a global franchise for large multinational clients. I believed that there was a strong appetite for a platform that could offer lawyers from top-tier firms at significant discounts to large-firm rates. I had the experience of starting a law firm before. Some years ago, I had started a transactional boutique, which had some success and was later acquired by a larger firm.
BBJR has offices in New York City and Washington, DC. Our practice areas are: general corporate, which includes mergers and acquisitions; capital markets-complex finance, which encompasses just about all types of financing transactions, including commercial bank loans, public finance, corporate finance, workouts, project finance, securitization, structured finance and derivatives; real estate, which includes real estate finance (including workouts), acquisition, disposition development and leasing; investment funds, which includes private equity fund and hedge fund formation, investment analysis and execution, as well as the regulatory aspects of investment management. We also have intellectual property, tax, ERISA and government advocacy capabilities.
While I believed that we would be able to build a firm with excellent lawyers, I am amazed by the stellar attorneys that we have attracted, their level of experience and the range of practices that we can offer at this very early stage in the firm's life. We are fortunate to have recently added several partners, of counsel and associates to BBJR. Steve Ruskin, a partner in tax, has over 30 years of experience in M&A, limited and general partnership matters, and tax exempt organizations among other areas; David Schwarz, a partner in investment management, has significant experience forming a range of funds including hedge funds, private equity and venture funds, counseling pension plans on fund investments and guiding clients through securities law compliance matters; Jennifer Leary and Joshua Bloodworth are our "dynamic duo" in New York real estate. Jennifer has joined as of counsel after practicing for seven years at Skadden Arps in New York on a range of transactions, including real estate financings, acquisitions and dispositions, development and leasing, etc. Joshua is an associate with six years of experience in similar areas. Joshua and I were colleagues at DLA Piper in New York. Anthony Dreyspool also joined from DLA Piper in New York (where he was a partner in ERISA). Anthony has joined as of counsel - bringing over 30 years of ERISA fiduciary experience. We also added Trisha DiGiore, a fourth-year lawyer in complex finance who previously was an associate at Nixon Peabody in New York where she primarily was active in municipal finance.
Editor: Also, please tell our readers about your individual practice area.
Bryant: My practice covers M&A transactions and financings generally. I represent Fortune 500 companies, financial institutions, private equity funds and a handful of smaller companies and entrepreneurs. While there has not been a great deal of activity in the market, I am actively working on some M&A transactions for large and smaller clients. My practice also includes MWBE certification and structuring, especially as it relates to joint ventures and other strategic combinations.
On the financing side, I have experience with a range of equity and debt transactions. Over the last several months, I have been working on a few seed-stage-company financings. I am also working on a municipal financing. Over the course of my 14 years of practice, I have been fortunate to see a lot of different types of financing and investment transactions, including venture capital, private equity investments, public offerings, convertible notes, PIPES and institutional private placements.
Editor: I have heard it said that venture deals will be the first to regain momentum rather than private equity. What are you seeing?
Bryant: Given the lack of debt financing, it would be logical for venture capital to pick up first. Overall, the venture capital market has been down. Although we have been involved in some seed-stage-company financings, we have not seen much in terms of later-stage venture capital deals. That being said, I know of several venture and private equity funds that closed on new funds before the market turmoil and that have been actively investing. I don't envy investment funds trying to raise funds in an environment where allocations to alternative investments are under pressure because of decreases in overall portfolio asset levels. Obviously, the larger economic trends have hurt venture and private equity funds and their investors.
For funds with capital to invest, I think that the environment is changing for the better. I believe the sheer amount of stimulus into the economy is going to boost investments in innovative companies in growth areas such as renewable energy, health care technology and infrastructure. Valuations have been under a lot of pressure over the last several years, which should bode well for investors. It's worth noting that financing remains a huge challenge. Good companies have been locked out of the debt market for a long time. If the financing challenge can be met, the situation could make for some good opportunities for private equity funds.
Editor: What kind of debt financings are you seeing?
Bryant: As you know, credit is pretty hard to obtain these days so there are not a lot of debt transactions getting done. We have seen some transactions where non-traditional private lenders try to fill some of the credit void in some pretty creative ways. For obvious reasons, the cost of credit for these transactions tends to be much higher than traditional financing, but the demand for credit is so high that there is a healthy appetite for these types of transactions. We have also seen some traditional debt financings. A few months ago, we closed a two-tranche loan facility for a client with excellent credit. The collateral required was well in excess of the loan value (two to three times the value of the loan in terms of hard assets), and required loan guarantees by the principals. I mentioned before that we are currently working on a municipal bond financing transaction. Some of my partners in the complex finance space are seeing some life in the securitization market outside of private label mortgage-backed securities. Currently, we are working on an acquisition of a large consumer loan portfolio using securitization as a financing technique.
Editor: Without revealing any names, would you describe some of the deals you have done since the inception of the firm?
Bryant: A few months ago we closed on a dual-tranche bank-financed credit facility for a management company client with a portfolio of companies. The borrower was borrowing the funds to refinance existing debt. The transaction involved a term loan and a revolving line of credit. It was a pretty standard transaction. This is the deal I referred to earlier that had a significant amount of collateral. Not surprising, lenders are requiring significant security for deals that are getting done these days.
We are also working on a municipal offering. The deal is scheduled to close before year-end. The deal involves a not-for-profit borrower seeking funds for certain capital projects. We are representing the underwriters in the transactions.
Since the firm's founding, in addition to the M&A and financing transactions described above, we have assisted clients on a range of matters and been involved in advocacy in a number of areas, including real estate advice, federal programs such as PPIP, MWBE joint venture structuring, and trademark and patent counseling matters, among others.
Editor: Are you seeing covenants in either one of those financing deals?
Bryant: The municipal finance deal is part of an existing indenture. Municipal finance deals are like public corporate debt in some respects in that they have no real covenant restrictions. In a municipal deal, covenants include securities law mandates such as continuing disclosure obligations and covenants against actions that would adversely affect the repayment of the obligations. With respect to the corporate debt market, we have not seen much activity. The two-tranche credit facility that Imentioned earlier had a full set of covenants. Clearly the days of covenant-light transactions are long gone.
Editor: Your practice also includes MWBE matters. Please describe some of these matters for our readers.
Bryant: On the MWBE side, we help clients get certified as minority- or woman-owned and controlled entities by state or private certifying bodies. Typically this entails helping to structure the operating business to ensure that it is owned and controlled by minority individuals or women. The formation and structuring for certification can be challenging depending on how complicated the underlying capital structure and shareholder agreements are. We have helped form and structure joint ventures between majority companies and minority companies. If properly structured, even arrangements between very large majority firms and smaller companies can be certified as minority- or women-owned business enterprises. Typically, you see those types of joint venture arrangements in situations where the business will try either to access government contracts or to cause the joint venture to be attractive to a customer base that values diversity.
We have assisted clients on MWBE joint ventures in areas ranging from gaming to financial services. In addition, we have been assisting on legislation to strengthen MWBE procurement programs at the state level.
Editor: In what areas do you hope to expand the firm's work? Do you hope to grow internally or by merger with other firms? Where do you want the firm to be in five years?
Bryant: At this point, litigation is the practice area that we hope to grow. We think it's wise to diversify our firm in terms of practice. We have had conversations with a number of talented lawyers, current or former litigation partners in big firms, who for one reason or another have become disenchanted with the big firm model. I think that we are pretty close to bringing some of those people on.
In terms of whether to grow by adding individual lawyers or by acquisition of another firm, I don't envision that we would do a firm merger. We are a boutique and intend to remain so for the foreseeable future. As a boutique, we have the advantage of being a close-knit group of lawyers who have the ability to attack projects collaboratively and efficiently with very high quality, senior teams. In terms of our short- and-long term plans, the business plan is to grow to 20 to 25 lawyers in the first year so that we could offer a full range of complimentary services around our transactional core. Now we have 18 lawyers and if we bring on a litigation team, we may get to 20 to 25 within our first year. Clearly, the goal is not the number of lawyers, but rather the ability to offer our clients services in areas in which they desire to hire us.
In terms of five years out, again, while numbers don't drive it, I would envision that if we are successful, we may grow to 50 to 75 lawyers. We hope to make our mark in the legal community as a very sophisticated, corporate boutique that offers insightful lawyers, great pricing and that, by the way, is an MBE firm.