The relationships that private equity sponsors have with their financing sources have always been critical to doing PE deals, Kirkland & Ellis LLP debt finance partner Eric Wedel said on the week’s Drinks With The Deal podcast, but the way those relationships are managed has changed dramatically. Where individual partners at sponsors might once have had their own contacts at banks, over the past decade many sponsors have set up capital markets teams to oversee the firm’s financing.

Michael Babiarz at Clayton, Dubilier & Rice LLC pioneered the approach, Wedel said, and sponsors continue to adopt it, with Greg Maxson joining Thomas H. Lee Partners LP in 2017, David Leland joining BC Partners LLP in 2018 and Douglas Wallach, a former Kirkland associate, moving from Blackstone Inc. (BX) to Stonepeak Partners LP last year.

As a result, Wedel said, there’s been a “convergence of the high-yield and term-loan market, which has been driven by a uniform approach to documentation that’s been driven by having capital markets professionals.”

Legal practice in debt finance has shaped Wedel’s view that technology and data are central to legal practice.

“Technology has allowed deals to be done extremely quickly and efficiently, and collecting data is part of that and will be a driver for deals to be done in that way,” he said. “I already use a large amount of data in terms of how I give advice and have hired people to track data and give more efficient responses more quickly.”

He expects that trend will accelerate as technology is able to identify key terms in various forms of financing and integrate them seamlessly into form debt agreements.

Here’s the podcast with Eric Wedel:

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