1. Corporate
The Corporate practice advises clients on acquisitions of other businesses, disposals of their own business and raising finance in the equity markets. It also provides a wide range of general corporate advice that every board of director needs. Lawyers who work in Corporate practice tend to be both generalists and specialists – they combine in extensive teams but each lawyer will have a particular speciality within the Corporate practice. For example, there are specialists in public takeover work, specialists in the fields of telecoms, financial services and energy – any business area where there is a special regulatory or legal specialisation that is required. The name “Corporate” obviously means that if you work in this practice, you will work for many corporations – publicly quoted companies, private companies perhaps owned by families and companies owned by financial institutions. The Corporate practice also provides advice to companies which are themselves advisers, such as investment banks.
2. Banking
The Banking practice is different to the Corporate practice although the two are easily confused. The Banking practice is responsible for facilitating the closing of transactions for clients needing debt funding – typically those that need loans in order to fund their general corporate activities, to make purchase of other companies or assets. Once clients find a company that they want to buy, whether it is on the stock market or a private company, in order to finance the purchase of the company, they need cash. They can access cash in one of two places – by raising it in the capital markets (by making a placing and attracting money from bond investors) or they can go to a bank and arrange for that money to be provided through borrowings (this is called ‘debt finance’). A large part of work in Banking is drafting loan documentation and general transaction management. Lawyers in the Banking practice ensure all the paperwork that the bank needs before lending is on the table on the right day, at the right time and it is accurate. For example, ensuring that the borrower is authorised to borrow, that the loan can only be used for the agreed purpose and that the loan agreement is enforceable. Most banks just do not have the resources to do this internally for larger transactions or it is simply not practical to run a process like this in-house if a ‘club’ of banks (called a ‘syndicate’) are lending together, so they need legal expertise from lawyers in the Banking practice to make the transaction happen. Should you choose to work in the Banking practice, you will be heavily involved in very large transactions. Also, in a world with new financial products developing everyday, which the Banking practice is there to support – it is a very lucrative practice indeed.
3. International Capital Markets
The International Capital Markets practice works with a wide range of companies and entities and is responsible for advising the issuers – the people who are looking to issue the debt and who are promising to repay the debt, or in the context of securitisation, the people whose assets are backing the debt. This practice also acts for parties who might be arranging the debt or underwriting it, or arranging the distribution of the product. The International Capital Markets can be split into five groups:
- Securitisation Group
This group deals with structuring financial instruments that are generally based on the cash-flows from a pool of assets, such as mortgages or intellectual property rights.
- General Securities Group
This group is responsible for helping clients raise capital on the international capital markets.
- Corporate Trustee Group
This group advises corporate trustees on capital market programmes.
- Derivatives and Structured Finance Group
This group principally looks at other types of financial solutions for clients where there is a hedge or a swap involved
- US Corporate Finance Group
This group specialises in looking at raising capital where there is a US securities
law element.
Lawyers in these areas have two principals, and very important roles.
1. Structuring: Looking at how a financial instrument can be structured to work legally.
2. Documentation: Drafting documents, attending conference calls and meetings and helping to arrange closing of transactions. This is where most trainees will be heavily involved. However, the bright side is that you would often be liaising directly with clients, either by email or by phone.
4. Litigation and Dispute Resolution
The Litigation and Dispute Resolution practice provides specialist advice and representation to clients around the world on litigation, arbitration and regulatory matters, as well as on risk management. Whilst there are a variety of disputes the practice deals with, most Magic Circle firms normally deals with ones that have a commercial aspect to them, e.g. banking disputes – where a bank may have a dispute with the counterparty over a contract, a loan agreement or some other financial product. On the corporate side, examples of disputes include those with service providers or in relation to projects such as the construction of an energy plant. With any dispute, especially where the parties have an ongoing commercial relationship, it is attractive to see if the parties can resolve the dispute by negotiation, without going to court. As a trainee in Litigation, you should expect to be helping to draft pleadings or requests for arbitration and preparing evidence to be filed and served on the other side. You can also expect to attend court for applications, for example freezing orders, to attend meetings with clients and to interview witnesses.
5. Real Estate
The structures and vehicles used to buy and own real estate are increasingly sophisticated and so are the finance techniques. In a global market, clients need real estate lawyers who can combine technical expertise with a practical approach and the capacity to build teams across jurisdictions. Real Estate is the biggest asset class in the world. Lawyers working in Real Estate act on buying and selling real estate for investors, developing land, constructing new buildings, leasing real estate, financing real estate (with both debt and equity), establishing vehicles (such as companies, partnerships and trusts – e.g. REITs) for investing in real estate and then buying and selling these vehicles. This might sound straightforward but sometimes, it can be quite complicated as you may not just be buying the property asset, but end buy buying a company so there are property, tax, regulatory, commercial and corporate issues to be considered. Trainees in Real Estate are given a wide variety of tasks, so you might draft a lease, negotiate a contract, write a note of advice on rights or matters affecting a property, and research sustainability and green issues, which are very topical at present. There are a large number of transactions at any one time so you learn how to juggle different clients and deals. As well as being heavily transaction based, there is a lot of research and technical expertise required as there is a large body of real estate statutes and case law.
6. Tax
Many cases a lawyer will undertake have some sort of tax aspect. Corporates, institutions, investors and individuals alike want to maximise the tax efficiency of their affairs, and understand their liabilities and the tax implications of their strategies. The work of Tax practice can be broadly divided into 2 parts – work supporting other practices like Corporate, Banking, etc. or standalone assignments. The work of a trainee in Tax will typically be research driven so anyone who is interested in the academic side of the law would find sitting in Tax an interesting and enjoyable experience. You will also be involved in negotiating tax indemnities, tax clauses in loan agreements and tax sections in offering circulars.
7. Employment & Benefits
The Employment & Benefits practice works in partnership with clients to develop individual, practical and creative solutions for all aspects of modern workplace challenges, pension issues, employee reward and compensation assignments. The Employment & Benefits practice is made up of 3 distinct practice areas: Employment, Pensions and Equity Incentives.
In Employment, you will advise on a wide range of employment issues including boardroom disputes, union relations, employee discrimination and unfair dismissal cases. You can also expect to conduct litigation, both in the employment tribunal and in the high court.
In Pensions practice, you do a lot of work for pensions scheme trustees, advising them on rights, rule changes and a range of other issues.
In Equity Incentives, you will be helping to design compensation strategies and put in place equity incentive places.
In addition to the standalone work, all 3 areas will expect to support the Corporate and Finance on transaction – looking at the transfer of employment contracts and benefit entitlements from one entity to another. Employees and their benefits are very often the most important part of a corporate transaction – when transactions go wrong, more than 50% of the time it is because the employment issues have not been properly dealt with.
Obviously, there are many more practices that you may want to look into. For those with a scientific background, there are firms like Herbert Smith which have a Intellectual Property practice. So do shop around and find out which firm suits you best!
