Herrick’s Morris F. DeFeo, Jr. on Diplomatic Advisership in Corporate Law

Leading a practice group takes diplomacy. And when that practice features cross-border matters, international diplomacy.

That is why Morris DeFeo, known for his collaborative, tactful and open-minded approach to practice, has been a key figure in international corporate law for more than 40 years.

As partner and co-chair of Herrick’s Corporate Department, DeFeo serves as a legal and business advisor to high-profile clients across a host of sectors and nations, including the Middle East/North Africa, India, Europe and beyond. In all, his work has taken him to more than 45 countries in the last four decades, highlighting a lifelong passion for travel and international relations – one that he says would have made him a diplomat if he hadn’t decided to become a lawyer.

“I’m a negotiator – not a table pounder,” says DeFeo. “If there is a solution to be had, I hope to find it.”

DeFeo spent part of his early career as executive vice president of corporate and international transactions for a Nasdaq-listed internet access solutions company, where he helped expand the company’s international M&A transactions, joint ventures and relationships with foreign companies in 16 countries, as well as the company’s expansion into Asia, Australia and Europe.

That early experience provides DeFeo an unparalleled window into business operations, allowing him to advise companies on issues in and outside the legal umbrella. It’s a role he finds himself taking on increasingly in recent years: “While I still focus on legal issues on a day-to-day basis, I now act as an overall business advisor with a legal background,” he says. He carries that outlook into all areas of his practice – as leader of Herrick’s private investment fund practice, he prioritizes an industry-specific outlook, rather than viewing fund representation “through the eyes of a lawyer.”

In addition to his substantial work in funds, since joining Herrick in 2018 DeFeo has headed up notable work on capital markets, corporate finance and M&A transactions, corporate governance and compliance and more. His clients operate across a range of sectors including defense, information technology, healthcare and energy.

In recent matters, DeFeo represented Greystone Senior Debt BI, a subsidiary of the Greystone Senior Debt Fund, in a Series Bond A offering of a record-breaking $160M on Tel Aviv Stock Exchange – the highest rated offering for this product. DeFeo and team worked with Israeli firm Goldfarb Gross Seligman on the deal.

DeFeo has also been instrumental in transactions in the entertainment world. He recently represented leading dance entertainment company Break the Floor Productions in an investment deal with private equity firm TZP Group, which merged Break the Floor and Star Dance Alliance to form Dance One Holdings – the largest institutional investment in the dance industry up until that point. The new company provides industry-leading dance instruction and competition, as well as commercial relationships with choreographers and dance educators.

The transactions DeFeo oversees can often rise into the billions: One such is DeFeo’s representation of a U.S.-based nanotech company, which recently entered into a reverse takeover transaction with a Canadian publicly traded company. DeFeo led the team that negotiated the definitive arrangement agreement which laid out the terms for the $5.5B transaction.

DeFeo sat down with Lawdragon to discuss his career, along with his industry-leading insights on trends including the U.S. government’s increased involvement in cross-border transactions, fertile ground for inbound investments, growth in the private credit market and more.

DeFeo is a member of The Lawdragon 500 Leading Dealmakers in America.

Lawdragon: What brought you to a career in the law?

Morris F. DeFeo Jr.: As an undergraduate, I studied international political science and envisioned that I would have a life in the foreign service or working for the U.S. government. I took a class in constitutional law, and it changed my perspective. I decided that I wanted to attend law school and ultimately practice business law. I have been able to integrate my international interests throughout my career including a segment in which I practiced law in Japan earlier in my career. My work has taken me to 45 countries with transactions and other matters in Saudi Arabia, the UAE, Qatar, Kuwait, Egypt, India, China, Australia, Brazil, Mexico, Colombia, the UK, Germany, Croatia and across eastern Europe.

I view fund work as an industry segment rather than simply a substantive area of the law. While many law firms view fund representation through the eyes of a lawyer, that vantage point can overlook issues critical to this specialized industry segment.

I love the precision involved in the practice of law, particularly in the sophisticated transactional work on which I advise. I also really enjoy working with people in different industries and across cultures, which has shaped the kind of lawyer I am today.

LD: To that end, what is the range of work you do within your corporate practice?

MD: Working with private investment funds comprises about forty percent of my practice. This work runs the gamut and includes structuring funds, capital raises, portfolio transactions, establishing sponsor structures and representing investors in funds both inside and outside of the United States in a variety of industries. I view fund work as an industry segment rather than simply a substantive area of the law. While many law firms view fund representation through the eyes of a lawyer, that vantage point can overlook issues critical to this specialized industry segment. Our vast fund experience provides my team with an understanding of both the environment in which fund clients operate, and the unique challenges and opportunities faced by these clients. Through our intricate understanding of the industry, we have insight on how to achieve the objectives of fund sponsors and investors, and what is impractical or unworkable.

With respect to the other significant areas of my practice, I focus on M&A, corporate finance and securities. Herrick is widely recognized as a leader in mid-market deals representing buyers, sellers and investors in companies across a wide segment of businesses, both public and private. My securities practice also includes capital raising in public and private markets dealing in both equity and debt and advising companies on overall growth plans and corporate governance.

LD: What kinds of matters are keeping you busy lately? Are there any trends you’re noticing in your practice?

MD: Recently, I have seen an enormous amount of change in which various U.S. governmental entities are intersecting with the business world resulting in the promotion and facilitation of transactions across borders. The public sector has been working directly with the commercial and private sector to create favorable circumstances for inbound investments. We are seeing a close degree of collaboration for both strategic and national security reasons. As a result, there has been a significant increase in cross-border M&A and investment across variety of industry segments including emerging technologies, cyber technologies, AI and nano technologies.

In the past, cross-border transactions were focused on strategic opportunities, in which the entity investing primarily considered factors that included diversifying operations, cost advantages and market expansion. Previously, international investment was also focused on outbound investment and expansion into select geographic areas including Latin and South America, India and China. The pendulum does swing over time, and there have been periods in which we have seen investments go in both directions. However, what we are seeing now is different from a typical market swing – there is an added layer in which the current environment and the U.S. government have encouraged in-bound investment providing for a larger global role for emerging businesses and technologies in the U.S. I have also seen an increase in “matchmaking” between sources of capital and operations.

This development is closely tied to our funds practice. The growth in fund work is being fueled by the current climate favoring cross border investments. For example, with the increased globalization of sports, we are now building out complex fund structures to identify and close on sports-related investments both in the U.S. and abroad.

There is also a current trend in which funds are focusing on the potential success of an investment rather than identifying investments in a particular industry. Funds and high net worth family offices are seeking opportunities to invest into businesses, with less focus on a particular vertical. Our deep knowledge of funds as an industry facilitates our representations in this space. At other firms, they may know M&A work inside and out, but if they are not as familiar with the life cycle of a fund, they are disadvantaged in structuring those deals. We are also seeing growth in the private credit market which continues to expand beyond direct lending to financing infrastructure, project finance and other asset-based transactions.

What we are seeing now is different from a typical market swing – there is an added layer in which the current environment and the U.S. government have encouraged in-bound investment providing for a larger global role for emerging businesses and technologies in the U.S.

Over time, my team at Herrick has worked fastidiously to view the fund as an independent entity, as opposed to a structure sandwiched into the middle of a deal. We view the structure of the fund as a primary element of a deal, not a secondary consideration.

LD: Can you tell us about any recent matters that stand out?

MD: I recently represented a sovereign wealth fund in negotiating their investment into a U.S. technology fund. Our deep knowledge of the funds space was a significant advantage in ironing out the terms of the investment. We are now assisting that U.S. fund in its consideration of M&A opportunities.

LD: You’ve built your practice over the last four decades. In that time, how has your work changed?

MD: As I have gotten more senior, I am more involved in strategic decisions with my clients and frequently serve in a broader business advisory role. My work has evolved from advising on a specific legal issue or transaction to providing insight on various aspects of the business. While I still focus on legal issues on a day-to-day basis, I now act as an overall business advisor with a legal background.

LD: How would you describe your style as a lawyer? Or, how do you think others see you?

MD: People view me as a consensus builder. They often look to me to find common ground between parties, which I can accomplish while advancing my clients’ interests. I am a negotiator – not a table pounder. I am even-tempered and aim to find a way to put deals together so that everyone feels that they have achieved their goals at the end of the deal. If there is a solution to be had, I hope to find it.

The nicest things ever said about me as a lawyer are that I have a calming influence and am able to simplify the most complex situations. I believe that if you cannot explain something to a client then you do not understand it yourself. I also focus heavily on policy and process. I want to understand the thinking behind an idea, policy, law or transaction, which helps me ultimately find a workable solution.

LD: If you weren’t a lawyer, what would you be doing now?

MD: If I were not a lawyer, I would have been a diplomat. In line with my affinity for understanding and explaining policy, I would love to teach corporate, securities or corporate finance law at a law school or university.