After wearing a banker's hat for less than three years, James Sprayregen is going back to law. He is rejoining Kirkland & Ellis LLP after leaving in 2006 to co-lead the Americas restructuring group at Goldman, Sachs & Co.
"I miss practicing law," says Sprayregen, 49. Though he fielded other prospects in both law and finance, it was his former home that beckoned most. "Ultimately, if I weren't going to be at Goldman, I'd be at Kirkland."
He will continue to split his time between Chicago and New York. Goldman's chief underwriting officer for the Americas, Bruce Mendelsohn, will replace Sprayregen as co-head, alongside Dhruv Narain.
A longtime restructuring pro, Sprayregen says he had a "very steep" learning curve, picking up "a lot about what I didn't know I didn't know." For example, while as a lawyer he understood the syndication process, as a banker, he came to better grasp its intricacies. "There was a lot more art to it than I expected," says Sprayregen, who adds that he will miss further developing his financial expertise.
Still, the tight credit market makes it a good time to return to law, he says, noting that when there's "no new money, the lawyering aspect is more relevant." Indeed, fellow restructuring pro Harvey Miller last year returned to Weil, Gotshal & Manges LLP after a four-year detour as a banker at Greenhill & Co. But whether practicing at a bank or a law firm, Sprayregen says there is much restructuring work nowadays. "Things have gone significantly worse," he says. "I think, unfortunately, it's going to be a pretty broad array of industries" that are going to get hit.
For creditors, systemic risks have abated, but struggling financial institutions will affect restructuring. "It definitely changes things," he says. Struggling themselves, creditors may be less able to make decisions, and less able to bring money to the table. Some may become more flexible during negotiations, others less so. Then, too, there is the human element. With the large number of layoffs hitting the financial services sector, there may be churn in the credit bankers handling restructurings, which may or may not benefit workouts. "It could go either way," says Sprayregen. The new bankruptcy code is also "really starting to bite," he adds, and newish instruments like credit default swaps will affect dynamics.
Still, restructuring work is gratifying, Sprayregen says. "It's an area where you can have a tremendous impact" by turning around a company and saving thousands of jobs. He began his career at Lord Bissell & Brook LLP in 1985, after receiving a law degree from the University of Illinois. In 1989, he bolted to Rudnick & Wolfe, now DLA Piper, as the junior-most person on a 10-person team. The next year he moved to Kirkland, where he led some of the most complicated Chapter 11 bankruptcies, including United Airlines parent UAL Corp., Trans World Airlines Inc. and Conseco Inc. With all the work around these days, Sprayregen won't have to return to his very first job: bartending. After graduating in 3-1/2 years from the University of Michigan, he spent several months working the tap at Good Time Charlie's Bar and Grill.