The Complex Choreography of Corporate Finance with Wachtell Lipton’s Emily D. Johnson

Photo by Nick Coleman.

After spending a year in Prague at a modern dance conservatory, a young and multifaceted Emily D. Johnson wasn’t quite sure what was next for her. She’d always been drawn-in by movement, but dance was never her long-term goal.

Johnson had long held a fascination with complex social systems, the power of the economy and the concept of money as a motivator. After a volunteer trip to a medical clinic in Nicaragua disabused her of the idea that she would go into medicine, she set her sights on law.

The young Johnson could never have predicted that a life in finance would be where she’d ultimately hit her legal stride. When she first burst into the bustling world of complex corporate transactions, there was more crossover with dance than she might have initially expected. In finance, action causes reaction, relationships shift patterns, motivation propels plot, intention meets impact and when expectation collides with reality what results can be ground breaking, culture shifting and era defining.

“I became fascinated by economic systems, and the idea that money is power – and understanding who has power, how, and when in an economic system like our capitalist system,” says Johnson. “I had been looking for the thing that was intellectually interesting that was going to grab me and spark me, and this was it. This is the thing that gave my mind a lot to work with.”

Now instead of engineering dance sequences, Johnson is choreographing debt capital structures. The Wachtell, Lipton, Rosen & Katz partner specializes in restructuring and finance, known for her to ability navigate mergers, acquisitions, divestitures and spin-offs, creatively and effectively. She understands debt on a poetic level and is an ace when it comes to developing evergreen capital structures that can weather any storm a business cycle might be hit with.

“When I look at a system, I'm often thinking, how can we make this work in a fair way?” says Johnson. “Everything that I care about is tied to money and a functioning economy. Gender equality, healthcare outcomes, fair labor standards, a healthy planet – literally everything is tied to the economy.”

Johnson is a member of our flagship guide, The Lawdragon 500 Leading Lawyers in America, and The Lawdragon 500 Leading Dealmakers in America.

Lawdragon: How long have you been at Wachtell?

Emily Johnson: Fourteen years, I joined as a summer associate in 2010.

LD: Tell us about your practice in the Restructuring and Finance group. What does it entail?

EJ: We do all things debt. I design debt capital structures and help companies navigate transformative transactions from a financing perspective. Like your mortgage or your student loans, the debt that companies take on helps them grow and develop. But unlike your debt, a company’s debt has a whole host of rules. Thou shalt not incur debt above a certain amount. Thou shalt not incur secure debt above a given amount. Thou shalt not merge, or sell all, or substantially all, of your assets. Thou shall only make certain investments. Thou shall keep insurance. So when you're doing an M&A transaction where Company A is trying to buy Company B, and they have complex capital structures, they have all of these rules about what their behavior can be that's quite different from the consumer debt that most folks are used to. We spend a lot of time when we're putting companies' capital structures in place thinking about all the ways it could grow and change over time. What we are writing today could live for 30 years, so we think a lot about how that is going to work as the company evolves.

Incremental change happens over time, and that is the way that things move forward. We are all responsible for our pieces of progress.

LD: Is this the type of practice you imagined for yourself back in law school?

EJ: It's interesting because I don't have a finance background. My undergrads are women's studies and exercise science. I didn't take any bankruptcy classes in law school. I'm a first-generation four-year college graduate, and I really didn't know much about the professional world when I was young. I'm from a very blue-collar type of place, to me a “banker” meant a bank teller. I didn't know any lawyers – there were no lawyers in my family. My mom was a lynchpin of our school, church and neighborhood communities while having meaningful part-time jobs. My dad worked as a machine technician and mechanical trainer. I was an active kid – all the church activities, sports, Girl Scouts and dance. My parents were running me around all the time and I remember having a conversation in the car with my dad about careers, and he gave me this piece of advice, he said, “Work with smart people.” That really stuck with me. I always thought lawyers were smart people, and many of us are.

LD: Is that how you made your way to the law?

EJ: It was not a direct route. I had an undergrad scholarship that really helped open the world up to me. I went to the University of North Carolina, on the Morehead-Cain Scholarship, which paid for four years of school and for summer enrichment activities. I left the country for the first time on that program, I came to New York City and did an internship through that program. It really started me thinking about the possibilities of different careers. I thought I was going to be a doctor, then I did a summer in Nicaragua working in a medical clinic and learned that I did not want to be a doctor. I care very much about access to care and the politics of care – and I care very much about women's reproductive rights. I realized that it's the systems and access to care that was interesting to me about medicine, not actually the day-to-day practice.

So then there I was, a senior in college, and I didn’t really know what I wanted to do. I knew I wanted to live in a big city, and to have this big life, but I really didn't know what that looked like from a career perspective. But I was a dancer at the time, so I spent the year after I graduated in Prague, in the Czech Republic dancing at a modern dance conservatory.

LD: Wow, what an experience.

EJ: Yes, I recommend being 22 years old and moving to Europe to dance. It was a great year, very fun, but coming out of it I didn't know what I was pointing at professionally. That's when I started seriously thinking about law school. I had graduated college the year before and came to New York and worked at a temp agency. I happened to get placed at the law firm Covington & Burling as a temp for the summer before I went to Prague. Covington actually called me while I was in Prague and asked me back. So I decided I would come back to Covington and be a secretary, but I told them it was only going to be temporary, that I wasn’t going to be a legal secretary forever. They really showed me what it is to be a lawyer, what it is to be a professional. I saw a range of practices and I thought, “Yes, I can do this.” So then I went to law school. Took out a big old loan and went to Duke Law, which I loved.

LD: How did you land on financing as your practice?

EJ: I was in law school during a very interesting time – 2007 to 2010. While I was sitting in my constitutional law class, Lehman was failing. It was the days of the subprime mortgage crisis, the fire sale of Bear Stearns, Lehman’s failure, AIG’s rescue, TARP and the auto bailouts. There was a lot going on, it was like, “What bank is going to fail this weekend?”

I became fascinated by economic systems, and the idea that money is power – and understanding who has power, how, and when in an economic system like our capitalist system. I started to see some of the connection points with things I cared about, like social policy, and I began to think about balancing moral hazard with systemic care. When individuals took out mortgages that they couldn't pay for, we didn't step in to help them. But when there were systemic problems, we stepped in and helped the banks. Things like that. When I first started to see these complexities that I had never understood before, I got the bug and I wanted to understand more. I had been looking for the thing that was intellectually interesting that was going to grab me and spark me, and this was it. This is the thing that gave my mind a lot to work with.

Everything that I care about is tied to money and a functioning economy. Gender equality, healthcare outcomes, fair labor standards, a healthy planet – literally everything is tied to the economy.

People always try to make money, it’s what people do. But different brains work in very different ways. When I look at a system, I'm often thinking, how can we make this work in a fair way? Some others look for how they can use the system to their specific advantage. One thing about finance is you're always putting these two different types of brains together, the regulators and the regulated. You have a lot of really educated brains chasing a prize, and that keeps finance so dynamic. Everything that I care about is tied to money and a functioning economy. Gender equality, healthcare outcomes, fair labor standards, a healthy planet – literally everything is tied to the economy.

LD: Right. Nothing gets done without the financial systems.

EJ: Exactly. We're limited in solving the problems that we have by our economic constraints. And that's just a function of our humanity, but we have to decide how we allocate resources, and that's what economies do – allocate resources.

I saw this in Nicaragua. I volunteered in a medical clinic that was funded by Luxembourg, which got me thinking a lot about international aid. What aid is provided, where is it provided, how is it provided, who is it provided to, what strings come attached to it? Now I think a lot about, what is the right way to reallocate resources to people who are in a position in the system where they don't get resources they need? Wouldn't it be better if we could just make the system work so that you didn't have to find a charity to help you pay your bills? I think a lot about the ways we are handcuffed because of our starting position. If we were building from scratch, we wouldn’t build things like they are. But knowing that, we still have a responsibility to each other to look at those challenges in the eye and problem-solve them.

To take an easy example, it is unbelievable when you walk around New York City and you realize how inaccessible it is to people who use wheelchairs, walkers, strollers, delivery carts – or if a step is otherwise challenging. Why on earth did we design it this way? Every one of us, at some point in our lives, is going to need ramps, and yet we've designed the simple system of the sidewalks, stairs and other basic infrastructure in a way that is not usable for many of us.

But this is how the system is built today, and so the question is how do we work to make it better? Incremental change happens over time, and that is the way that things move forward. We are all responsible for our pieces of progress.

LD: Tell us about your work with Her Justice.

EJ: I deeply believe folks who've been given a lot, like me, have an obligation to give back. When I came to Wachtell, I knew I wanted to do pro bono work. I went to the head of our group, and he asked me what I care about. I said, "I care about women.” He turned around and there was a folder right there behind him on his credenza, and it was Her Justice. I was the first person at the firm who took pro bono work from the organization. I started with uncontested divorces, because it was paperwork I could do at 2:00 AM or whenever I had first year associate time. So that's how I started. And it felt very real because I was giving somebody back her conception of herself. I don't even know how many uncontested divorces I’ve done over the years, but then I also spent eight years on a pro bono matter with Her Justice. It was a child support, visitation and custody matter that started when my client's child was eight, and I represented her until he was 16 years old.

While I was doing the work, I got very interested in learning how nonprofits work in New York. And what it means for the professional community to support nonprofits. And so the organization had a junior advisory board that they invited me onto. I was on that for about a year and a half, and then I led it for about five years. It was professionally an anchor for my early career and a huge growth opportunity for me. We built up the junior board and professionalized it significantly under my leadership. It taught me how to run a board meeting, how to raise money, and how to stay mission-minded at an organization. I've been through two rounds of strategic planning. I've watched us change over executive leadership. After I ran the junior board, I joined the fiduciary board and have been on it for two years now. So I've had this life cycle with the organization that’s given me a lot of touch points and different perspectives on how an organization can work to deliver individual outcomes as well as change the system. How it uses all of the knowledge from the individual outcome cases to inform the policy work.

Her Justice takes individual representations and it also has a policy arm. We don't just keep picking up the starfish and throwing them back. Instead, we walk upstream and say, "What's going on? Why are all these starfish out here?" And that is very attractive to me because I like systems and thinking about finding solutions, and that can’t be done effectively without the knowledge of the people affected by them. So the direct services work informing the policy work is a perfect combination.

LD: What do you do for fun outside of the office when you're not working or doing community work?

EJ: I've always loved to dance, I still dance. It's very humbling to go to a real ballet class now because I am like, “Oh my gosh, I used to be able to really do this!” But now you can find me in dance cardio classes. There are some amazing instructors in the city. In my next life, I’ll be a Rockette.