Business studies

Dubbed a crunch-busting initiative and a media ploy to raise the profile of BPP Law School’s new business school, Simmons & Simmons’ groundbreaking MBA in Legal Business got off to a bit of a shaky start. But, just three years after its conception, the innovative course proved its value after the overwhelming majority of Simmons’ first MBA-qualified cohort achieved NQ positions in the firm.

With a boost of more than 30 percentage points on the previous qualification round it is hardly surprising that the firm has decided to transform the once-voluntary course into a compulsory requirement for all future trainees.

“The legal world is changing,” Simmons’ graduate recruitment partner Alex Brown said following the launch. “It’s no longer just about being a good legal adviser and having a good understanding of the client’s business. Now you have to offer a more rounded service – you need to be part business consultant and part legal adviser.”

The programme, which was initially offered as part of trainee deferrals during the economic crisis, attracted roughly half of each trainee cohort to embark on the year-long course, after the LPC and prior to the training contract.

The course comprised four general MBA modules: organisation, leadership, business analysis, and marketing and strategy. These were taught using a holistic approach, with a combination of case studies in the four key sectors the firm focuses on: financial institutions, TMT, life sciences, and energy and infrastructure.

Following completion of the modules the students began work on a research project for Simmons’ clients based on specific business challenges. They were then required to provide consultancy and advice to clients by means of a presentation or report.

Learning by doing

The key benefits of the training structure, according to the firm, include understanding the commercial drivers of clients’ businesses and allowing the trainees to ‘learn by doing’, through practical team projects, experiencing issues in real businesses and debating these with the trainee cohort.

NQ trainee Mieke Botes, who will begin work as an associate in commercial litigation this year, says the course provided her with the right tools for pursuing a legal career.

“The MBA gave me knowledge as to what to look for when dealing with clients, what information I needed and how to analyse this,” she enthuses. “It allowed me to develop a deep understanding of our key sectors and, as a result, I’m able to contribute to our business and marketing initiatives.”

“We did presentations on a daily basis – once or twice a day we were thrown in at the deep end, with 15 minutes to prepare,” says Sally Booth, who worked with RBS on its foreign exchange trading floor as part of her client project, alongside the teams that deal with hedge funds and asset managers. “That really helped and I’ve been able to use those skills in presentations to clients.”

Brown has been particularly impressed by the feedback from clients in relation to projects.

He says: “This year, one client said that if he had not been aware the students were starting training contracts in September he would have thought they were at a two-year PQE level in terms of their overall approach.”

Despite its success, some critics have challenged whether it is really necessary to do an MBA so early in a law career. At present Simmons is unique in offering such a course for its future trainees. SJ Berwin offers trainees a bespoke Masters in Business course, also run in collaboration with BPP, while some law firms are giving MBA-style business training to associate level as an alternative, to improve the management expertise and commerciality of their lawyers.

Eversheds, for example, offers a mini-MBA to junior lawyers with up to four years’ PQE as part of its new Commercial Academy. Linklaters has gone a step further by creating its own law and business school offering entry-level training with a global orientation programme, practice diplomas covering the first four years as an associate, a managing associate diploma and a leadership programme for partners.

Hogan Lovells legacy firm Lovells arguably started the trend in 2006 by introducing a bespoke MBA programme along with Cass Business School for its associates. It also has an initiative called the ‘Business Programme for Trainees’, which acts as a foundation or the Cass programme.

“Business schools generally discourage recent graduates from undertaking MBAs because they lack experience of real-life business situations to apply the learning to,” Chris Stoakes, director of knowledge, research and learning at Hogan Lovells told The Lawyer’s sister magazine Lawyer 2B in December 2010. “In the case of our trainees, who are at a stage of their careers when they’re receiving a huge amount of technical legal training, it would be a mistake to overload them.”

Stoakes added that he believed the Cass programme to be more appropriate for more senior qualified lawyers, as they have the bulk of their legal technical training already under their belts.

Brown disagrees.

“The trainees taking the MBA are front-loading learning that might otherwise be taught only to partners and senior associates,” he argues. “Some of the case studies the trainees were given I only completed in the context of partnership weekends.”

Clients in mind

NQ lawyer Jonathan Tsui, who is qualifying into asset finance, believes it is somewhat short-sighted of lawyers to think trainees do not need to know anything about business.

“Ultimately, at a firm like Simmons, we are only advising clients that run large businesses,” he says. “In the bigger picture it makes a lot more sense to align your interests with those of clients. Your clients are not really going to trust you until they know you care about what they do, you know about what they do and you’re interested in what they do.”

In fact, Brown is so convinced of the value of the MBA in encouraging future trainees to get into good habits of commercial thinking and applying their knowledge from day one, the programme is to become a compulsory element of the training at Simmons. From September 2013, the course will be structured to allow all trainees to take it without adding an extra academic year to their career path.

“It’s just impossible to get 100 per cent of people through it in the current format and maintain a September and March intake,” explains Brown. “We’re also conscious that asking students to take an extra year out of their study path into a training contract could put some off and be something of a break factor in our recruitment.”

The new format has been made possible by the introduction of BPP’s fast-track LPC which condenses the professional training course into just seven months. Following the completion of the LPC, Simmons’ future trainees will immediately undertake one-third of the MBA course requirement by completing the core modules. The middle third of the MBA will continue during the training contract, delivered in day and evening classes, and through e-learning.

At the end of the training contract the trainees will have gained a diploma in legal business. Those wishing to stay at the firm in a NQ role will have the choice to continue the course for two years to gain the full MBA qualification.

Business-ready

“We didn’t want to say at the outset whether we would or wouldn’t make the course compulsory, but we feel it is adding a lot of value,” says Brown. “It made our trainees more confident, mature and business-ready.”

Following the implementation of the new training structure Simmons’ future trainees will, for the most part, be recruited from the undergraduate GDL.

“We’re doing this to put 100 per cent through the course and if we took trainees post-LPC they couldn’t do the MBA modules,” concedes Brown. “But if we saw someone who was particularly talented we may look to take them on. In numbers terms, we rarely take people who have gone past the GDL anyway.”

The changes to the course structure will also mean that future trainees will not undertake the highly valuable client project until after qualification.

The first cohort of MBA-qualified trainees speak highly of the client project work in particular, which gave them the opportunity to work with companies such as RBS and the Rothschild Group.

However, Brown believes the new format will deliver even more value for clients and allow junior lawyers to develop even better links.

“In truth, we may well not see the full extent of the benefit for some years to come, but it does fit with the profession because it is a competitive and fragmented market – a buyers market,” he concludes.

Tsui agrees.

“The confidence we got from the MBA means we can better connect with our clients and understand their businesses,” he says. “The long-term advantage of the course is measured not by a piece of work but by the people you meet and the goodwill that generates.”

Why would you do an MBA?

While some young lawyers are now being taken down the MBA route by their firms, others have chosen to do an MBA for personal reasons. A number have got an MBA in Legal Practice on their CVs while others have picked more traditional business-focused courses, with the aim of improving their business skills.

Some say they chose to do an MBA because their undergraduate degrees were humanities-focused and they needed the more technical skills taught on an MBA. One Linklaters banking associate in New York says she has acquired skills such as accounting, finance, presentation and public speaking that are not only occasionally helpful in her legal career but also that she could turn to should the law not work out for her.

“I have much more career flexibility than many of my colleagues in the profession and that is an enormous comfort in these uncertain times,” she says.

She adds that doing an MBA is something she would recommend to other lawyers. As the case studies below show, she is not alone.

Chris Owen, corporate finance partner, Manches (London)

Why did you choose to do an MBA?

At the time I was head of the corporate department and I realised I didn’t have a clue what I was trying to do. I was trying to lead a business and I hadn’t learned any of the specialist skills involved with understanding practical strategic issues around how to build and sustain commercial advantage. It was trying to get hold of some slightly more refined vocabulary.

How has it helped you as a lawyer?

As a corporate finance lawyer it gives you a different perspective on some of the businesses you’re advising, in terms of how you talk to them and how you look at their business. There’s a focus on trying to understand how they’re going to achieve things in the business, looking at the ways they’re doing this and whether they’re working in a model you learned in the MBA. It gives you a whole set of templates.

You’re going around looking at businesses and how they’re operating, and you’re recognising certain features. Either you’re recognising problems that have been identified in the MBA or you’re spotting some of the issues that are key to these businesses.

What skills did it give you that you did not previously have?

It gave me a vocabulary, but there should be more of a health warning when you’re doing an MBA that you’re not even halfway to learning the issues. There’s a lot of nervousness about some of the structures and ideas you’re trying to put in place. It can be quite threatening for some people.

Would you recommend MBA courses for lawyers?

With the caution that it’s hard work, it does give you some interesting insights into the way business works. You’ve got to be sure you’ve got a clear idea why you’re doing it and cautious in the way you apply it. There are some potentially explosive models you’re dealing with. Although it’s got a lot of upsides, there’s a cautionary tale that needs to be told as well.

Jacob Farquharson, counsel, capital markets, Clifford Chance (New York)

Why did you choose to do an MBA?

To provide the highest level of service to clients you need to be able to understand their perspective and what drives their business and decision-making. I was a political science major at my undergraduate university which helped me develop analytical and writing skills, but I didn’t feel I had adequate exposure to core business and financial concepts. Once I determined that I wanted to be a corporate attorney I felt an MBA was the most efficient way to learn about accounting, finance, statistics, operations, marketing and so on.

How has it helped you as a lawyer?

First, finance can be its own language at times, so it has enabled me to speak and understand that language. Second, my classrooms were filled with people who were intending to go into business so learning the same materials as them, working closely with them on group projects and listening to their thoughts helped me understand their perspective and thought process.

In practice, it has helped me sort through issues that arise on transactions – to determine and focus on issues that may affect the business and to not get distracted by those that are of little importance in this regard. Most importantly, the skills and knowledge I learned and developed in business school have helped me provide clients with creative and commercially viable solutions to complex problems. Also, as a capital markets attorney I often work with management teams on the MD&A section of their prospectus, and the MBA has been extremely valuable there.

What skills did it give you that you did not previously have?

Business school is structured differently from law school. In law school you are often graded solely on your individual examinations so people tend to study in isolation. In business school a large component of your grade is based on group projects. As a result, you spend a lot of time working in teams and are forced to develop skills such as how to work with others, how to allocate work within a group, how to provide constructive feedback to other members of your team and how to prepare and deliver a group presentation. This is in addition to your detailed studies of non-legal coursework such as accounting, finance, statistics, operations and marketing.

Would you recommend MBA courses for lawyers?

I don’t believe that all corporate lawyers need MBA classes to provide great service to their clients, but for those who feel they may not have had adequate training in core business concepts I absolutely recommend them.

Juan Hormaechea, banking partner, Ashurst (Madrid)

Why did you choose to do an MBA?

I graduated in law and economics and I thought an MBA in the US would give me a sharper edge in finance as well as a wider scope of opportunities.

How has it helped you as a lawyer?

It has helped me understand the commerciality of the finance world in which I operate as a lawyer. This is really appreciated by clients.

What skills did it give you that you did not previously have?

A deep understanding of the mathematics of derivatives and a solid foundation in accounting and managerial issues. Taking an MBA also provides participants with an enhanced set of skills resulting in a broader understanding of the intricacies of financial transactions. It ensures they can achieve excellence in drafting financial contracts and advising clients on legal strategy.

Would you recommend MBA courses for lawyers?

Yes.