For many Americans, Memorial Day marks the beginning of summer – neighborhood pools open, patriotic decorations ornament yards, and friends and family gather for barbeques and outdoor fun. Amidst the three-day weekend, it’s easy to forget the true meaning of Memorial Day – a time for our nation to mourn and honor the United States men and women who lost their lives while serving in the United States Armed Forces.
In honor of this special American holiday and the brave Americans that have served or are serving in the United States Armed Forces, we sat down with Joe Beach, a Partner in Cadwalader’s Charlotte office and recently named Co-Chair of the Capital Markets practice. Joe specializes in a broad range of securitization and structured finance transactions, focusing primarily on CLOs and leverage on corporate credits, and is a leader in the growing Fund Finance securitization space. But before Joe’s successful legal career in private practice, he served as a Captain in the United States Army JAG, where he was named the Assistant General Counsel for Fiscal and International Law for the United States Army Corps of Engineers.
Read more about his story below:
Tell us about your path from the Army to law school – what came first, the Army or law?
It was really easy. I knew I wanted to go to Davidson College and I did not want to graduate with a lot of debt. The Army offered me a scholarship and I said, let’s do it. And growing up I thought about being in the military - I think every boy does at some point.
While in the Army, I was presented the opportunity to go on what’s called an educational delay for three years to get my law degree. It counts as time in service, because lawyers need to be of higher rank than an officer when starting their career. As a result, I was commissioned as Second Lieutenant before going to JAG School. By the time I started JAG School, I was a First Lieutenant and then I became Captain fairly quickly during my time in active duty post-JAG School.
So really, I never had a burning passion to be a lawyer, but the Army put doors and paths in front of me and followed them along. It turned out to be a pretty good idea.
What is JAG School?
This stands for the Judge Advocate General’s Legal Center and School and it’s the Army’s version of law school, located in Charlottesville, Virginia. I spent three months there in training before going to my active duty station.
What happened after you graduated JAG School?
I had an extremely non-traditional Army legal career. While I was in JAG School, I got a letter in the mail introducing me to what’s called the Army General Counsel’s Honors Program. They take four people every year - I applied and was accepted. Through this program, I ended up at the Headquarters of the U.S. Army Corps of Engineers.
During my time in this program, I covered a bunch of functions. For example, I helped the Corps of Engineers put together its budget and interpret legislative authority for various programs. I supported their foreign military sales program, which was really, really big - billions of dollars. I did a lot of interagency cooperation. It was very government focused and transactional if you had to put it in a category. It was a great experience and living in D.C. was a really good time. Walking around in uniform is not so weird in D.C.
Looking back at my time in the Corps of Engineers, I now realize how much I enjoyed it. Every now and then we got to do really cool stuff. One memory is that the whole headquarters department of the Army would come together for a run once a quarter – imagine maybe 300 servicemembers in uniform formation running and singing in cadence. And remember that the general public is not allowed to run in Arlington Cemetery – but active duty military can. The only rule is that while you are running through, you must be silent. So once a quarter, we’d run Arlington Cemetery and all of a sudden everyone would go quiet all at once – it was a very cool experience.
Looking back on it, I’m proud to have been able to serve and be part of something greater than me. My piece of it was fairly immaterial - I was not the tip of the spear; I was not putting soldiers in the field. But I was doing what I was asked to do. And it taught me that the fundamental to service is that you don’t serve for yourself. You don’t get to tell others how you want to serve. That’s not real service. Service is doing what needs to be done and doing it well, and accepting that as your role.
What else did the Army teach you that has helped you in your legal career?
The skills I learned from the military have become more valuable the more senior I get. Lawyers are not naturally good at business - we study law, not business associations. But I’ve found that one of the key aspects to a successful business, or a legal career, is leadership. And to me, the military is the study of leadership. It teaches you how to be a good leader in a lot of different highly stressful situations and this has made an enormous difference in my legal career. Anyone who can bring that understanding to a law firm is going to find that they have a lot to offer.
And again, the military teaches you how to accept the role that’s needed at the time, which does not always mean being in charge of everything all of the time or doing a specific task that you want to or were trained to do. Sometimes this means creating the space for a unit to achieve the mission at hand. Now, law firms are not organized like a platoon or a battalion, but we’re organized with a lot of the same ideas and principles. The leader needs to manage these zones of vision and zones of responsibility. In combat, the officer remains responsible for those under his or her command. Subordinates are responsible for a specific task in the moment, which tends to be intensely focused. As an officer in the military, the leader’s responsibility is to create an environment and an ability for a unit to function efficiently. And this happens in a law firm too – sometimes it’s the partner’s job to create a space for the associate to draft that Credit Agreement or whatever it may be, and accepting what’s capable of being done with the resources at hand. So the military taught me not so much about chain of command, but more of chain of responsibility and how to best manage it.
How did you end up in private practice from the Army?
My Army legal path was different because I started in the Pentagon. I missed the window to serve as a prosecutor on base, which is the traditional trajectory for a JAG Officer. I really enjoyed D.C. and wanted to stay, so I sought out private practice.
This was January 2002 which was not a good time to try to find a job. I wound up with two job offers in governmental contracting. Truthfully, during my time as a JAG Officer, I had done minimal contracting. I knew what the Federal Acquisition Regulation was and how to read it, and that’s about it. But the firms I applied to had a small need I could fill based on my military background.
I was hired at Skadden Arps in D.C. to help one Partner whose entire practice was centered around government contracting for the U.S. Enrichment Company, which used to be a piece of the Department of Energy focused on enriching uranium in the United States. But this practice didn’t keep me fully occupied and there was one partner I really wanted to work with in finance. I literally sat outside his office door for five hours one day until he was free. He finally said OK, I’ve got some work for you. So I started working with him on Project Finance which eventually became Structured Finance. Flash forward, in 2005, I got a call from a headhunter about an opportunity in Charlotte at Dechert in a very small CLO and private credit group. I was there until 2011, when an opportunity arose to join Cadwalader’s Charlotte office as Special Counsel in the Capital Markets department.
Tell us about your practice at Cadwalader.
I primarily work in corporate credit securitization and CLOs, representing banks and non-traditional lenders in varying types of securitization financings. Our group has six partners, with 60+ attorneys specializing in this type of work across the United States and the United Kingdom. We are one of (if not the) largest lender side corporate credit securitization and CLO practices in the world.
You recently spoke at Cadwalader and Fitch Ratings inaugural Capital Call Securitization Conference. For our readers that did not have the opportunity to attend, see the recap here. What else should we know about Capital Call Securitization and your practice?
Capital call securitization is an idea that’s been percolating around for a while. But for the market and our team, it’s a natural transition for us – applying securitization concepts to traditional capital call financing, which is an exercise that we have done for decades for other asset classes. And Cadwalader is uniquely positioned to work on these transactions given our leading Securitization and Fund Finance practices. Our firm has the best designers on both sides to work on these deals. My team focuses on how the securitization piece works - how to isolate assets, how to do all the technologies that are securitization related. And the Fund Finance team focuses on the underlying collateral and the necessary mechanics around that. I think we’re seeing these practices pop up in law firms but the strongest ones will be those that operate as a joint venture between a fund finance and a securitization practice, like Cadwalader. It’s a really exciting thing for the firm and our clients.
Any predictions for the Capital Call Securitization market?
There’s a lot of liquidity in the market right now that’s looking for things to do. Banks are thinking about this product to clean their balance sheets – new products are always about Bank risk management. I think this will be another form of syndication. And to me, it is a great bank risk management tool.
Any other predictions?
For those readers in Charlotte, I predict it’s going be an awesome time to meet at 7 a.m. at Poppy’s Bagels in Cotswold. Every Memorial Day, a group of 50-60 guys meet up to do a Murph Run. If you don’t know what that is, it’s a workout consisting of a 1-mile run, 100 pull-ups, 200 push-ups, 300 squats and another 1-mile run, in honor of Navy Seal Lieutenant Michael Murphy who was killed in Afghanistan. We’d welcome anyone interested to join us.
On behalf of the Cadwalader Fund Finance Team, thank you Joe, and all of the men and women in the United States Armed Forces, past and present, for your courageous service.
