Practicing law also teaches you to think about people, particularly the public. This starts with learning about topics such as negotiations and jury selection, but the lessons can be applied more broadly.
A good lawyer is a steward of the firm’s reputation, helping craft the broader public image of the firm. They’re collaborating with the CEO to ensure the right messages are presented inside and outside the firm.
This builds the perspective that you need to lead the company as a whole: being an effective CEO is as much about vision, people, and communication as it is about strategy. Different seat, same table.
The other advantage of being a securities lawyer: you get to work with a lot of different businesses, most of which are dealing with significant challenges in their operations and financing. So when you step up to the CEO position, you’re dealing with issues that you’ve probably already seen at other companies.
So how did this lead you to Lincolnshire Management?
I joined Lincolnshire as a managing director focused on helping improve the portfolio companies. That was my opportunity to break into the private equity business. When life hands you a great opportunity, be ready to step up and do what it takes to succeed.
The first Lincolnshire Management investment I was involved in was a company called Credentials Services International. The deal initially worked great – and then it didn’t. The business fell apart in the second year of the deal. I flew to California for a year and a half to run the business because our equity was under water. We made it work: we fixed the business and sold it, earning our investors more than twenty times their invested capital.
It was a tough way to join the industry but it paid off. Taking ownership of a hard situation and dealing with it will earn respect from your peers. I moved up quickly from there. Life will throw you curve balls; the secret is to just keep moving forward.
Nothing can take the place of persistence. Finance has long been a destination for ambitious young people. Within the field of Finance, many of the best rising stars have gravitated towards private equity investing, helping reshape the American industry to compete more effectively in the global economy.
Unlike investment banking and asset management, where you’re restricted to analyzing the operational aspects of a company, private equity investing allows you to take an active role in assembling a business.
Value can be created through restructuring operations, investing in new equipment, and combining two existing businesses into an entity that is more than the sum of its parts. A successful business is as much a social entity as a financial one: factors such as culture, values, and controllership play a critical role.
Today’s interview is with TJ Maloney, the leader of a successful middle-market private equity firm, Lincolnshire Management. He joined the firm in 1993 as a managing director after acquiring C-level leadership experience at other companies, including serving as interim CEO at Credentials Services International. Mr. Maloney’s earlier career was in M&A and securities law, holding positions with multiple New York law firms. He holds degrees from Boston College and Fordham Law School.
We asked TJ Maloney to share a bit about his early career and what led him to his role as a private equity investor with Lincolnshire Management.
So how did you prepare for a job in private equity investing?
It was a gradual process, driven by my curiosity to learn more about how business works.
Unlike many of the young analysts out there, I didn’t start in investment banking. In the beginning, my goal was to learn enough to work full time with my father on the family business.
It turns out it takes a very wide range of expertise to run a successful business: you need exposure to a lot of different areas so you’re prepared to deal with anything that happens. Many companies have rotational programs for emerging talent – these are a great way to get exposure to many different areas early in your career.
I created my own version of this. I worked in different departments at several family businesses in the distribution and building materials industry, moving through everything from sales to engineering, manufacturing, and quality control. I even worked in the bill collections department!
This experience not only taught me a lot about managing people, it showed me how the different parts of a business fit together. A business is a complicated machine: every department has its role in making a company work efficiently.
In fact, you would be surprised how much you can learn by working in the quality control and the collections department. These departments clean up the messes created by everyone else at the company. You will quickly get a roadmap of what you need to go fix!
So how did law school fit into this?
At the time, I was still interested in working in my father’s business. After I finished law school, I was recruited into the field of securities law. This gave me exposure to mergers and acquisitions, a critical part of private equity, along with perspective on how investors join together to create a company. That set the stage for my future career.
If you’re interested in working in a competitive career, it’s important to remember that there are often many different seats at the same table. Your first challenge is always getting in the room, convincing other members of leadership to take you seriously.
The best way to overcome that is to become an expert in some area of the process that creates value for the company. That will earn you credibility. Once you earn that, it’s fairly easy to move between different seats at the table. The team trusts you.
In my case, I went from advising on deals to helping manage the resulting businesses. From there, it was only a short step to leading my own deals.
Wow! What’s the path from lawyer to CEO?
Corporate lawyers are problem solvers. Executives bring business problems to their lawyers, asking them to guide them through the appropriate legal and ethical considerations. A good lawyer learns how to think about the business as well as the law and can apply that expertise to improving the business.