Nov 1 (Reuters) - The growing private credit market is

keeping U.S. finance lawyers busy, and a recent string of

alliances between banks and non-bank lenders and an expansion

into asset-based financings could drive more work their way.

Law firms with leading finance practices have stocked up on

attorneys to compete for work in private credit, which has

ballooned to a $2 trillion market. Private credit refers to

loans provided by non-bank lenders, whose role has expanded in

recent years as they capitalized on fewer regulatory hurdles

than traditional lenders.

Mayer Brown and Kirkland & Ellis hired several partners that

handle private credit transactions in recent weeks. Sheel Patel

joined Mayer Brown on Thursday to lead its New York private

credit practice from King & Spalding. Kirkland last week hired

Freshfields Bruckhaus Deringer partner H.T. Flanagan, whose

clients have included Hayfin Capital Management and CPPIB Credit

Investments.

"Without being hyperbolic, I do think that the opportunity

set is tremendous," said Jennifer Daly, head of private credit

and special situations at Paul Hastings. Daly, whose clients

have included Antares, Apollo, Blackstone Credit

Blue Torch Capital and KKR, was one of 11 restructuring

and private credit attorneys who joined Paul Hastings from King

& Spalding in June.

Traditional lenders have been seeking a slice of the

lucrative market, including by teaming up with investment firms.

Lawyers also pointed to private credit's increasing

diversification into areas such as asset-based finance. On

Monday music company Concord, represented by DLA Piper, said it

closed on $850 million in financing backed by a catalog of music

assets in a deal with affiliates of Apollo, represented by

Milbank.

Citigroup ( C/PN ) and Apollo in September partnered for a $25

billion private credit and direct lending program. Cravath,

Swaine & Moore advised Citi, while Apollo's legal counsel was

Paul, Weiss, Rifkind, Wharton & Garrison, and Sullivan &

Cromwell served as its regulatory counsel.

Raymond James in May partnered with billionaire Todd

Boehly's investment firm Eldridge Industries to expand into

private credit. Wells Fargo ( WFC ) last year teamed up with

private equity firm Centerbridge Partners to launch a direct

lending fund.

Such alliances leverage bank relationships to originate

transactions for their private credit partners, hopefully

creating a "bigger deal source funnel," said Peter Williams, who

joined Cahill Gordon & Reindel as co-head of private credit in

July.

That can "lead to more deals, more deals leads to more legal

work and opportunities for a law firm that has a good private

credit bench," said Williams, who formerly was a managing

director on KKR's credit strategies team.

Gibson, Dunn & Crutcher, Akin Gump Strauss Hauer & Feld,

Proskauer Rose, Simpson Thacher & Bartlett, Dechert and

O'Melveny & Myers are among other firms that have hired private

credit lawyers this year. Kramer Levin Naftalis & Frankel and

Seward & Kissel each recently formalized private credit

practices.

Jon Truster, a law firm recruiter at Macrae, said there have

been twice as many private credit partner moves among top firms

in 2024 than in the prior two years in major markets. It's an

"area of huge interest from law firms," he said.

A Macrae report on partner hiring trends for major law firms

showed that finance practice moves surged in the first three

quarters of 2024, with 101 compared to 72 the prior year in New

York, London, Washington, D.C., and the Bay Area. This

incorporates all transactional finance areas, including private

credit.