The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
Eric Klein, Partner, and Jeralin Cardoso, Partner—Corporate & Securities
Eric Klein has grown Sheppard Mullin’s 165-plus attorney health care practice from two attorneys in 2008 to a national leading health care law firm today. Eric has focused on growing a diverse, exciting multi-sector health care practice and has mentored eight associates (50 percent female/50 percent male) to partner status in the past eight years. Eric works with many of the leading national health insurance companies, hospital systems, physician organizations, and health care private equity funds on mergers and acquisitions, strategic alliances and joint ventures, and growth strategies. His practice includes working on multi-billion-dollar transactions and advising new health care technology-enabled startup companies. He received his J.D. from Boston University School of Law and his A.B. from Princeton University.
Jeralin Cardoso is co-leader of the firm’s Corporate & Securities practice group. She has worked with a broad range of health care clients, including physician groups, hospitals, ancillary service providers, and private equity and strategic investors. Jeralin has a deep understanding of the business and strategic needs of medical groups and health care organizations. She was a summer associate and has been with Sheppard Mullin since graduating law school in 2007. She received her J.D. from Pepperdine School of Law and her B.A. from University of California San Diego.
Describe your practice area and what it entails.
Eric: My practice focuses on health care mergers and acquisitions and joint ventures to create economies of scale and growth strategies. I also work with clients to evolve from traditional fee-for-service reimbursement systems to next-
generation value-based and risk-based reimbursement structures.
The health care team at Sheppard Mullin works with industry leaders and rising stars in today’s health care industry. We have a very broad, multi-sector practice, which includes clients that are health insurance companies, hospital systems, physician organizations, post-acute care providers, large and emerging health care technology companies, and private equity and other investors. Our practice includes transactions (mergers and acquisitions, joint ventures, strategic alliances, and complex contracts), health care regulatory (licensing, compliance, privacy, and other areas), health care employment law, health care antitrust, and health care finance. We also have launched a health care artificial intelligence (AI) initiative, with partners and associates advising both AI companies and users of health care AI.
Jeralin: My practice focuses on health care mergers and acquisitions, representing both buyers and sellers. I assist clients in strategizing about the future of their organizations and helping them execute on those visions. This not only includes negotiating deal-specific transaction documents, but also developing what the relationship between the parties will look like beyond the closing of a specific transaction. I work with clients on physician compensation systems, corporate governance, management arrangements, and the equity components of transactions.
What types of clients do you represent?
We represent both leading and emerging health care companies. On the health plan side, our clients include Cigna, Centene, Molina, Aetna, and many of the Blue Cross and Blue Shield health plans.
In the physician services sector, we have worked on some of the most complex and largest transactions, including the second-largest physician services transaction of 2019 with the merger of Summit Medical Group and CityMD and the earlier $4.4 billion purchase by DaVita Inc. of HealthCare Partners. We work with many of the leading next-generation physician organizations across the country, including Landmark, ChenMed, Aledade, VillageMD, CareMore, Iora Health, and Agilon Health.
On the hospital side, we represent many of the leading hospital systems in the country, including CommonSpirit, Bon Secours Mercy Health, Providence, Montefiore, and University of California Health System.
In private equity, we represent many of the largest and most successful health-care-focused private equity funds, including Welsh Carson, General Atlantic, TPG Capital, and H.I.G. Capital. We also work with many of the middle-market private equity funds that help to grow new regional and national health care companies, such as Varsity Healthcare Partners, Amulet Capital Partners, Cobepa, Bison Capital, and Arlington Capital.
What types of cases/deals do you work on?
Eric: As previously mentioned, my practice focuses on mergers and acquisitions, joint ventures, and other growth strategies. A recent transaction I worked on was the strategic alliance between Cigna and Oscar Insurance Company, which brought Cigna’s provider networks and experience together with Oscar’s next-generation technology to create new insurance products for small group employers with 1-50 employees.
Jeralin: As previously mentioned, my practice focuses on mergers and acquisitions. I represent physician groups and private equity firms that are focused on investing in physician organizations (whether single-specialty, multi-specialty, or primary care physician organizations).
How did you choose this practice area?
Eric: Although I come from a health care family, my entrance into health care was more one of serendipity in that I joined a health care firm to grow their general transactional practice and found that they had a few health care regulatory partners who were not able to do the type of transactions I could. Right at that time we started to see one of the waves of consolidation in the health care industry, and so I jumped in using my general corporate transactional skills and have stayed in the health care industry ever since. It’s been an exciting and challenging area with much change and evolution that keeps me engaged every day.
Jeralin: I always knew I wanted to do corporate transactional work, and as a junior associate, I had the opportunity to work with Eric Klein and his team. I was impressed by the complexity and type of transactions they were working on. It piqued my interest, and I have enjoyed working in this space ever since.
What is a typical day like and/or what are some common tasks you perform?
Eric: I am constantly on the phone and in meetings with clients, advising them, negotiating deals, and trying to fix problems. Every day is a mix between working with existing clients and being introduced to new opportunities. I also look to combine the new changes in health care with my past experience to help clients navigate this incredibly complex health care universe that exists today.
Jeralin: Similarly, a large majority of my time during the business day is spent on the phone or in meetings with clients. Otherwise, I am working on transaction-related documents.
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
Jeralin: It’s important to have a general understanding of health care law as well as the inner workings of a business generally. I would advise anyone interested in a health care transactional practice to become familiar with the various rules and regulations governing the health care industry and to take advantage of any business, finance, and accounting classes to understand business strategy. We spend a great amount of time working with clients beyond drafting documents, helping them think through strategy and how the laws impact their business operations, and being able to have those discussions will bring additional value to your clients.
What is the most challenging aspect of practicing in this area?
Eric: Health care is an ever-changing environment in that we have new regulations, new interpretations, and new business arrangements every week. Additionally, there is a large amount of money in the health care industry right now, which is driving change. If you put that together with the changing technology, such as machine learning and other artificial intelligence, we see tremendous evolution. It is both a challenge and a joy to keep up with all of it.
Jeralin: The most challenging aspect is the ever-changing health care landscape and working with your clients to meet their business objectives while also maintaining compliance with the rules and regulations of the industry.
What do you like best about your practice area?
Eric: I like that I am able to be helpful to my clients, to have the ability to work with amazing colleagues, and to work in one of the best and most vibrant health care teams across the country. We are all working together to improve a very fractured and difficult health care system. Our team does a great job of combining legal and business strategy to improve how health care is delivered by our clients. Additionally, the health care team is the firm’s most successful industry team to date, which has given us tremendous support and visibility within the firm. This support has allowed us to be innovative and entrepreneurial and to be one of the most rapidly growing areas within the firm.
Jeralin: Health care law is a very interesting and complex area. Our health care team works collaboratively to help our clients think of innovative ways to meet their business goals and continue to navigate the complex health care landscape. I like being able to help clients find a way to achieve their goals and assist them in putting those plans in place.
What are some typical tasks that a junior lawyer would perform in this practice area?
Eric: A junior lawyer could be expected to work with clients on day-to-day operating matters, supporting transactions by learning about health care companies and identifying problems, drafting agreements and documents to reflect business arrangements, and developing one or more areas of specific expertise. For example, one of our first-year lawyers recently came to me wanting to launch an initiative for a health care blockchain technology. At most other firms, a first year might not be listened to for that suggestion. At our firm, we gave him support, paired him with more experienced attorneys, and helped launch this initiative.
Jeralin: Our junior associates are given meaningful responsibility early on in their careers. A junior associate is likely to participate in client meetings and conference calls to gain experience on how transactions are structured and negotiated. As we do with our junior associates, we also get our summer associates involved in understanding regulatory aspects and integrating them into transactions so they have a realistic expectation of what it will be like when they return as a junior associate.
How do you see this practice area evolving in the future?
Eric: Health care law will continue to grow with the health care industry. If you said 20 years ago that health care law would have to think about issues like technology, artificial intelligence, or telemedicine, no one would have ever believed you. We think that the application of technology to health care will continue to refashion the delivery of health care services and create opportunities for both better care and for cures. Health care law will have to keep up with all of that and help us achieve that as a society.
Jeralin: As Eric said, we will continue to see technology change how patients view and receive health care, which may have an impact in how health care is defined moving forward. We are already seeing a change with things like telehealth and other technologies being introduced to measure various aspects of people’s health. It will be interesting to see how technology continues to change how we practice law in this area.