Forget about panel reviews for the moment. ABN Amro general counsel John Collins is doing something more interesting than simply launching the City’s latest institutional tender.
As we have reported in recent months, derivatives lawyers are in greater demand than any other discipline. This has dramatically reignited the debate on assistant lockstep, especially at Allen & Overy. It’s been going on for a while – Linklaters used to be dubbed the derivatives finishing school for Deutsche. But all major finance firms report an enormous rise in headhunter calls on their associates in the past year.
As we report on the front page this week, ABN Amro has a different approach to the problem, trying to solve its difficulties in hiring derivatives specialists by going back to first principles. Hence the comprehensive training programme, with Clifford Chance in to do it at a knock-down price.
The idea is to get all ABN’s finance lawyers up to speed, giving them an education in derivatives so they can handle the work flowing from your average leveraged buyout, for example. But ABN, presumably weary of paying headhunter fees, is also ramping up its high-level derivatives capability – and that’s where the innovation lies.
ABN Amro’s move will be taken very seriously by magic circle firms. The banks have always relied on law firms to produce a pool of trained associates who can be recruited to work in-house. It is now dawning on them that this simply cannot continue.
Actually, the banks have been partly to blame. They have always kept all that commoditised work in-house, most of which are bilateral contracts that can be documented internally. In any other discipline, commoditised work provides ballast to a private practice. But because the banks have kept that to themselves, the magic circle has only been able to field small and highly specialised teams. And that means the pool of experienced lawyers is correspondingly tiny.
Plenty of banks offer ad hoc training for their in-house lawyers, but until now it has been easier to wave a chequebook around. ABN is behaving more like a law firm, with a long-overdue focus on the overall career development and training of its lawyers and an emphasis on the pastoral.
The City needs a lot more derivatives lawyers. Collins’ move shows that in-house departments can start to grow their own, too.