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Greenberg Traurig and other major law firms face a challenging landscape in the dwindling M&A market. In response to this, they are shifting their focus towards a promising growth area: private credit. Richard Rosenbaum, the longtime chairman of Greenberg Traurig, highlighted the potential of private credit in an interview, comparing its rise to the boom experienced by law firms in the private equity sector over the past decade.
The private credit market has witnessed significant growth, with global private debt reaching approximately $1.5 trillion as of September 2022, compared to just $300 billion in 2010, according to Preqin Ltd, a London-based investment data company. Projections by Preqin suggest that total private credit assets could reach $2.2 trillion by 2027.
As traditional lending becomes more challenging due to bank failures and tightening standards, private credit deals have gained traction as an alternative. However, these deals have also attracted the attention of regulators and lawmakers due to the fact that private credit funds operate with different oversight compared to banks, and floating interest rates come with default risks.
Greenberg Traurig, ranked among the top 15 largest law firms in the United States, and its competitors are actively seeking to expand their teams of lawyers with expertise in private credit. The firm has already hired such lawyers in major cities across the US, including New York, Miami, and Chicago. Additionally, it has made strategic hires in Europe and established a presence in the Middle East with new outposts in Riyadh, Saudi Arabia, and Dubai, UAE.
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Richard Rosenbaum expressed his confidence in Greenberg Traurig‘s positioning, stating, “We were ahead of this curve and currently have about 20 shareholders, plus a significant team of associates, who are focused on private credit work and expect to continue to naturally grow in this area.” However, the firm refrained from providing specific details about the private credit deals its lawyers are currently handling. Notably, Greenberg Traurig has previously worked with prominent private equity clients, including Blackstone, CVC Capital Partners, and Watchtower Capital Partners.
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The strategic shift towards the private credit market reflects the legal industry’s evolving landscape, where firms adapt to meet clients’ changing needs and capitalize on emerging opportunities. Private credit presents a lucrative avenue for growth, with increasing demand for legal services in this field. By expanding their expertise in private credit, law firms like Greenberg Traurig are positioning themselves to serve clients seeking alternative lending options and navigate the complexities associated with private credit transactions.
Major law firms, including Greenberg Traurig, are redirecting their attention towards the thriving private credit market as the M&A sector faces challenges. The rapid growth and potential of private credit make it an attractive area for expansion. By bolstering their teams with experienced private credit lawyers, firms like Greenberg Traurig are well-positioned to cater to clients’ evolving needs and capitalize on the opportunities the private credit industry presents.
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