1 February 2013
It is important to start thinking about the area of law you want to specialise in as early as possible because this will influence the firms or chambers you apply to. That said, we suggest you keep an open mind because you will not know whether a certain practice area suits you best until you have tried it. That is why you get to spend time in various departments during your training.
Within the commercial arena there is a seemingly endless number of practice areas, but the four main departments that you would expect to find in a City firm are banking, corporate, litigation and property. For detailed write-ups on each of these and many more please explore the rest of the practice area section on the site.
Practice areas are typically split into contentious (a situation involving a dispute) and non-contentious. The former includes litigation and other forms of dispute resolution, such as arbitration and mediation, while the latter covers everything else. Non-contentious can be divided further into transactional (deals such as the sale of a property or a merger between two companies) and non-transactional. An example of non-transactional work, sometimes referred to as ‘advisory’, includes acting for a client in relation to their tax planning.
Unfortunately, these categories often become blurred. For example, some employment lawyers will handle contentious work and act for a company that is in a dispute with its workforce, as well as non-contentious matters such as advising an employer on work permits for its overseas employees.
In a similar way, a competition lawyer might advise on transactions such as whether a merger will be blocked by the European Union, as well as on non-transactional matters such as cartel activity or state aid.
Other areas where the work handled by lawyers potentially overlaps are TMT (technology, media and telecoms), sport, private client and family law. Although some specialists may boast A-list celebrities or, indeed, royalty as clients, their work essentially focuses on principles of contract law. Consequently, some firms may put them all in the same category, under the commercial law banner.
Find your match
One of the advantages of splitting practice areas into these subgroups is that it will help you identify those that best match your skill set. For example, transactional and contentious work will generally have stricter deadlines, so you may have to work longer and more unpredictable hours. This will suit those people who get a buzz out of watching a deal or case unfold. The other advantage of specialising in transactional work is that if you advise on a sizeable deal or case you are likely to be part of a large team. In contrast, if you focus on non-transactional matters you may have to spend more time working alone or in much smaller teams and at a slower pace.
The amount of law you will have to handle will also differ depending on your area of expertise. Again, transactional lawyers will spend less time with their heads buried in legislation or legal textbooks, while those who focus on areas such as employment, environment and tax will have to spend a lot of time keeping up with changes in the law. For example, new employment laws come into force every April and October, while tax specialists will have to get their heads around changes brought in by the Chancellor of the Exchequer in his annual Budget.
The economic cycle will have a dramatic impact on some practice areas. Departments that suffer most during a recession include banking, corporate and finance. In contrast, litigation is seen as a countercyclical practice area and typically experiences a renaissance at times of economic upheaval.
We would be lying if we said the work handled by lawyers was simple - it is, indeed, highly complex. But that is precisely why so many students want to join the profession. Firms will not expect applicants to know absolutely everything about the type of work they handle.
However, it will help your job hunt if you are able to demonstrate a basic understanding. You can do this by reading the business pages and the legal press. This, in turn, will help you decide if a career in commercial law is really for you or whether you would be more at home at a high-street firm.
Both Lawyer 2B and The Lawyer publish regular articles on which firms are advising on the deals that are making the national headlines. Additionally, Lawyer 2B often runs case studies, written by lawyers, on recent deals and cases they have advised on.
These articles should help you to keep up-to-date with comings and goings in the City, thereby giving you a better understanding of what lawyers actually do and making you more commercially aware. Here are four of the key practice areas:
Banking & Finance
As we all know, banks are in the money business; they accept our deposits, invest them in a wide range of financial products (for example, by making loans) and make both themselves and us a profit in the process.
Every one of these banking activities is legally documented. For example, when you opened your bank account you will have signed a standard set of terms and conditions setting out both your and your bank’s rights and obligations. Of course, you will not have had the chance to negotiate any of the terms of this contract, although they will have been scrutinised by a banking lawyer beforehand.
In contrast, consider the example of a large multinational corporation needing to access hundreds of millions of pounds in debt to carry out a major takeover. It would need to approach one or more international investment or commercial bank(s) to arrange and underwrite the debt, and would need to grant (or ensure that its subsidiaries grant) guarantees and asset security in favour of the banks.
The commercial terms of the deal will be negotiated between the banks and the borrower, and it is the task of banking lawyers to document what has been agreed between the parties and ensure the documents work from a legal perspective.
The term dispute resolution encompasses a range of procedures used to resolve disagreements. The most familiar type is litigation, which involves an adversarial court process, but other less adversarial methods of dispute resolution have also become popular. Alternative solutions include mediation, arbitration and expert determination. The key advantage of these alternatives is that they take place in private, avoiding the publicity associated with the courtroom. Becoming a litigator is a notably different career path from becoming, say, a transactional lawyer. The key differences between litigation and transactional forms of law are:
- The subject matter varies widely from case to case, even if you specialise in acting for a particular type of client.
- The work is adversarial in nature. Unlike in transactional departments where there is a common goal, in litigation the interests of your client are directly opposed to the interests of the other side.
- Clients are more likely to be nervous, emotionally involved or reluctant than in a transactional department where they are generally motivated to complete a deal.
- Every day is different and it is unusual for a day to go by without learning something new. Typical tasks include taking notes at client meetings, drafting correspondence, drafting witness statements, attending court hearings, conducting legal research, producing notes of advice, reviewing documents and instructing counsel.
Property (or real estate) lawyers deal with much more than bricks and mortar. They are involved in a wide range of work, including buying and selling commercial properties, landlord and tenant matters and site developments. Clients range from corporate real estate investors and developers to government and public sector bodies. The diversity of clients and transactions means that life as a real estate lawyer is never dull. A day can involve drafting leases for shopping centre units, visiting a redevelopment site or working on the sale of an office block. Whatever you do, the work will involve drafting and negotiating documentation for transactions. However, you will also have the opportunity to visit the buildings on which you are working and have a lot of direct contact with clients. Being a real estate lawyer is about more than knowing the law. Clients expect you to understand their business and the wider real estate industry, and to be able to provide them with practical and commercial advice.
Corporate lawyers provide legal advice to companies on significant transactions affecting their business. Such transactions are of the kind that you typically see detailed in the business pages of the national press and can take several forms:
Mergers and acquisitions (M&A)
This is where one company acquires another or where twocompanies merge to form an enlarged entity. There are many reasons why a company should want to do this, but the two main ones are either to grow its existing business (by buying a competitor) or to diversify (by acquiring a business in a different area from that in which it currently operates).
There is also a distinction between public M&A and private M&A deals. A public deal involves the buyer acquiring a company listed on a stock exchange (and therefore whose shares can be bought and sold by individuals, known as retail investors). In a private M&A deal a buyer acquires a company that is owned privately by a number of individuals. Therefore, one key difference between public and private M&A is that a private deal requires a willing seller whereas in a public deal the directors of the target company may reject the offer from the buyer, in which case the buyer may try to buy the company anyway. This is known as a hostile takeover and such deals usually attract a lot of publicity. Another distinction is that private deals tend to be less regulated than public ones.
Initial public offerings (IPOs)
An IPO involves the owners of a private company selling some of the shares in it to big financial institutions (such as pension funds) and to retail investors by listing the company on a stock exchange, as a result of which it becomes known as a public company (or plc). Again, there are several reasons why the owners of a private company would want to do this, but the two main ones are to enable them to raise money for themselves or to raise money to expand the company’s operations and, hopefully, become more profitable as a result. Once a company’s shares are listed on a stock exchange investors can buy and sell them at a price that is determined by the market.
Joint ventures (JVs)
A JV is where two or more parties enter into a form of business partnership. Both parties will contribute assets to the JV and run it together as a separate business. A party might enter into a JV because it believes the business will be more successful if it is run in partnership with another party, if, for example, the two parties own different but complementary assets that can be contributed to the JV.
Students often spend hours hunting for a definition of commercial awareness. Unfortunately, it’s one of those phrases that has several meanings, and it is certainly not just about flicking through the FT or The Economist the day before your interview.
The key is not to get too hung up on the definition and instead think about how you can demonstrate commercial awareness, which is essentially a secret code for a candidate’s ability to show a genuine commitment to a career as a business lawyer. That means having a proper understanding of exactly what commercial law firms do and how they interact with other City players.
For example, taking a list of deals that a firm has advised on from its website and reeling it off at an interview is not going to impress anyone. If possible, try to find out what role the firm played on the deal and why it was significant. Did it involve a key client or break new ground? You’ll be able to get a lot of this information from Lawyer2B.com and sister site TheLawyer.com.
That said, being commercially aware is about much more than keeping abreast of comings and goings in the City. It is also about being able to show drive and ambition. During your interviews you should try to highlight situations where you really had to push yourself or achievements you are proud of.
It is also worth mentioning any experience you have had of commercial life, including work placements or summer jobs that are not law-related. Frankly, working in telesales to fund your way through university will impress some recruitment partners more than an overseas trip paid for by your parents.
Candidates who are commercially aware are also able to see the bigger picture and are appreciative of both the long- and short-term implications of proposals. They are also aware of an organisation’s strengths, weaknesses, opportunities and threats.
Whatever you do, avoid telling an interviewer you are commercially aware as you will end up in the reject pile. You have been warned.