Practice Area Overview
L2B Guide to a Career in Law 2010-2011
It is important to start thinking about the areas of law you want to focus on as early as possible because this is likely to influence which firms or chambers you apply to.
That said, we suggest you keep an open mind because you will not know whether a particular practice area suits you until you have tried it. This is why you get to spend time in various departments during your training contract.
Within the commercial arena there are many practice areas. Indeed, there are so many there is not enough room in this guide to include every single specialism. We have therefore decided to focus on the larger practice areas including banking and finance; competition; corporate; dispute resolution; employment; family; insolvency; intellectual property (IP); personal injury (PI); private client and real estate, and asked lawyers who specialise in these fields to give you the lowdown on their practice areas.
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 the advice a family lawyer gives to a client who is seeking a divorce, or that provided by a tax specialist to a client who wants to reduce their tax bill.
Unfortunately, these categories often become blurred. For instance, 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 staff or its staff handbook. Similarly, a competition lawyer might advise on transactions such as whether a merger will be blocked by the EU and non-transactional matters such as cartel activity or state aid.
Other areas where the work handled by lawyers potentially overlaps is technology, media and telecoms (TMT), sport, private client and family law. Although some specialists in this field might 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 together under the commercial law banner.
Find your match
One of the advantages of splitting practice areas into these subgroups is that it helps 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 from 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 smaller teams and at a slower pace.
The amount of law you will have to deal with will differ according your area of expertise. Again, transactional lawyers will spend less time researching the law, while those who focus on areas such as employment, family and tax will have to spend a lot of time keeping up to date with changes in the law. For instance, new employment laws come into force every April and October, while tax specialists will have to get their heads around any changes brought in during the annual Budget.
The economic cycle inevitably has a dramatic impact on some practice areas. For instance, until the credit crunch hit the headlines, corporate departments benefited significantly from the boom in merger and acquisition (M&A) deals. This had a knock-on effect on practice areas that worked closely with the corporate department, most notably banking and finance.
Another practice area that was constantly in the headlines until a couple of years ago is private equity. Although a number of the larger City firms have dedicated private equity teams, is it worth noting that many of these sit within the corporate department. Indeed, although the personalities involved in a private equity deal may differ from those on a public M&A transaction the pressures are similar, as both are document-heavy and move at a pretty fast pace.
Today, thanks to the credit crunch which resulted in the collapse of investment banking giant Lehman Brothers and the global economic downturn that followed, the picture is very different. As corporate departments have battened down the hatches, insolvency lawyers have crawled out of hibernation as businesses have fallen prey to the downturn. This is because insolvency lawyers specialise in advising companies that run into financial difficulties.
But while insolvency is experiencing a renaissance, other departments that are continuing to suffer as a result of the recession include real estate and some areas of banking and finance. Indeed, during the past 12 months Lawyer 2B’s sister title The Lawyer has run numerous stories of job losses at some of the UK’s leading law firms.
We would be telling a fib if we said the work handled by lawyers was simple - it is, of course, 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 of national newspapers and the legal press.
Both Lawyer 2B and The Lawyer regularly publish articles about firms advising on deals that are making national headlines. In addition, 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 do and making you more commercially aware.
The credit crunch explained
- So what is the credit crunch and what caused it in the first place? By now, you will almost certainly have heard the phrase ’US subprime mortgage crisis’.
- Subprime mortgages are sold to customers with patchy credit histories and those who could not get mortgages on traditional terms from a big bank or lender. These mortgages became popular as lenders sought to benefit from the US housing boom.
- Just like assets and equity, debt can be bought and sold. So effectively, what customers owed on high-risk mortgages was packaged up and sold on by lenders as bonds to be traded by investors. These are called mortgage-backed securities. When the US housing boom slowed in late 2006 and interest rates rose, repossessions of homes bought with high-risk mortgages increased. Homeowners found it increasingly difficult to pay back their mortgages, particularly because some had attractive initial interest rates that ballooned a couple of years in.
- Although lenders were obviously hit by non-repayments, investors such as pension funds and investment banks that had bought these mortgage-backed securities also suffered. They could not predict the flow of money they would be getting from mortgage repayments, so the value of the securities declined. They could only sell on these bundles of debt cheaply, and so made losses.
- Liquidity is driven by confidence and once an obstacle blocks the pipeline of money the whole system risks being clogged. After their bad experience with mortgage-backed securities, banks became wary of lending to each other and money was harder and more expensive to come by. In turn, banks stopped lending to businesses and consumers, with catastrophic consequences for the global economy, bringing about the worst recession since World War II.