Even as demand for laterals has fallen in recent months, several big firms have continued hiring in certain finance practices as clients seek more credit arrangements and transactions during the recession.

Steven Ellis, Proskauer Rose's chairman who also co-heads its private credit group, said that much like the time period following the Great Recession, he expects clients to seek solutions from alternative capital and for there to be an increased appetite for special funding situations, rescue funding and distressed investing.

Anticipating demand in this area was a key factor in Proskauer adding a six-lawyer team on Monday from Schulte Roth & Zabel, including four partners, who are joining the firm's private credit practice in New York.

The partners include Frederic Ragucci, who was the finance group chair at Schulte, as well as Michael Mezzacappa, Marc Friess and Ji Hye You, all of whom had been practicing together for more than 10 years. Jae Kim and Brian Harvey, also formerly of Schulte, joined Proskauer as special finance counsel.

In all, the hires bring the size of Proskauer's private credit practice to 60 attorneys.

"We've seen really steady activity in the private credit space. According to a survey we did, 86% of our clients are actively looking for deals," Ellis said. "Even though we have a different economic situation right now, private credit is alive and well and is very much open for business."

The Proskauer hires aren't the only recent moves in the finance space. Another Schulte lawyer who co-chaired its financial practice went to Weil, Gotshal & Manges in June.

And two entertainment industry-focused partners at Morgan, Lewis & Bockius hopped to O'Melveny & Myers' corporate finance practice in March.

Looking for Liquidity

Ragucci, the former Schulte finance chair now at Proskauer, said that at the beginning of the pandemic, he and his team were busy amending credit facilities and restructuring bankruptcies. After that initial wave of work, he said the group will busy for the foreseeable future handling more stressed credits and helping companies looking for liquidity to weather the economic downturn.

"There are also a lot of deals to be done with companies that are not necessarily distressed, but in the long term they're looking for liquidity on their balance sheets to survive through however long this will last," he said.

Ragucci added that he and the group had been in talks with Proskauer about a potential move since February but said demand for their services due to the recession made the firm an even better fit.

"We weren't siloed, but we practiced a lot on our own at our former firm, so having Proskauer's large platform in the credit area was important to us—there's a real benefit to being within a much larger group in terms of support," he said, noting Proskauer has expanded in the type of credit matters it handles, "from complex credit, special situations to multiple levels of debt and inter-lender relationships."

In a statement, a Schulte representative said the firm is "committed to continuing to grow our finance practice and adding top-tier attorneys across practice groups to our expanding firm." Schulte comprises "340 attorneys with a long history of providing best-in-class counsel to our global clients," the firm said, noting there are still nearly 45 attorneys, including nine partners, in its finance and derivatives group.

When it comes to finance hires, Sabina Lippman, recruiter and co-founder of Lippman Jungers Bala, said she is seeing more demand for lawyers with experience in private equity and non-bank sources of capital.

"The most attractive finance partners right now, from our perspective, tend to be folks who do work with private equity clients, as well as investment banks," she said.

Alisa Levin, a recruiter and principal of Greene Levin Snyder, explained that hiring in this space was more about measured, high-value additions to existing practice groups and less about the entire legal industry snapping up finance laterals.

"Generally, a lot of firms are not looking necessarily to buy practices, but they are being opportunistic because they do think things will shake out," she said. "Much of this is driven by some firms realizing that they can be opportunistic if there's a particularly good hire available."