Getting in a state

First, the US firms in London targeted the rainmaker partners. Then came the salary war, and the battleground moved to the ranks of the assistants. Now it seems they are taking the fight to the universities, wooing trainees before the UK firms have so much as introduced themselves.

Research undertaken by The Lawyer shows that there are now more than 20 US law firms in London offering training contracts. Between them, they hope to attract more than 80 of the best law students each year.

In some cases the first-year salaries are a giddy £10,000 higher than magic circle rivals offer, and Cleveland firm Squire Sanders & Dempsey is paying its second-year trainees a remarkable £45,000, which works out at £3,000 more than what newly qualifieds get at Clifford Chance.

But it is not just the fat wage packets that are tempting the top students. Take Natalie Flooks, who has just qualified into the litigation department at LeBoeuf Lamb Greene & MacRae. She says: “I think the overriding factor at the beginning was the actual office itself – it was very relaxed. I thought that I’d probably develop more in that sort of working environment, and it offered a pretty broad training in so many areas.

“I didn’t want to specialise so early on. I did a year in corporate and a year in litigation, and I did so many different things in corporate. Now I’m in litigation doing intellectual property (IP) work.”

Add to that the early exposure to clients and hands-on experience in the big deals, and the offers start to become more tempting.

Peter Sharp, the litigation partner responsible for training at LeBoeufs, says: “We offer a fantastic variety, and they find that their experience has been much more rich and much more varied. What we don’t and can’t have in a relatively small operation are big specialist departments.

“We’ve got 50 lawyers altogether, and they each do a wide range of things, so the trainees get breadth of exposure. And they get a lot of client contact. We often find the people we recruit in as newly qualifieds have much less experience of clients – some of them come in and say, ‘This is the first time I’ve ever met a client’.”

In the past, and particularly as the salary wars for assistants have hotted up, the US firms have come under attack for letting the English practices do the training and then nabbing young lawyers on qualification. Not all of them have been prepared to make the huge investment needed to train their own. A partner at one US firm still quips: “We’re quite happy for Linklaters to train them, and then we’ll nick them.”

But that is an attitude which is fading fast, largely as a result of the huge numbers of English partners who now find themselves as the decision-makers in the London offices of US firms. They are used to firms that invest in bringing on the solicitors of the future.

Julia Bracewell is the corporate partner responsible for training at high-tech firm Brobeck Hale and Dorr, the international joint venture of Californian firm Brobeck Phleger & Harrison and Boston firm Hale and Dorr.

As an English-qualified lawyer herself, she says: “We all feel under an obligation to the profession. UK lawyers are used to working like that, and if you want to play a part in the London legal circles, it’s right that you should contribute in some way. It’s the way it works – you’re all solicitors together.”

With offices normally having less than 100 lawyers, the extra pairs of hands always come in useful, and having lawyers at all levels of their careers makes for a well-rounded practice.

The opportunity to teach people what you need them to know is, of course, another advantage, as is the assurance that you know what you are getting. The risk for firms recruiting newly qualifieds out of the City is that they can’t be sure they will make the grade.

Howard Waterman, co-head of the international finance group at the London office of Chicago firm Sidley & Austin, says: “I think as the US firms get more mature, they then try to build up a proper structure for lawyers coming through. The perceived wisdom is that the best way to build up your pool of junior lawyers is to train them yourself – to take them in from the law schools and give them the education that you want them to have. Ideally, you’d hope to get all your newly qualified lawyers from your pool of trainees. That’s certainly our plan, and it does bear fruit.”

While the small offices may make for friendly yet challenging work environments, there can be disadvantages. Many US firms in London struggle to provide the Law Society’s requisite litigation training, focusing as many of them do on corporate finance transactions.

Sidley & Austin is currently piloting a plan to send its trainees out to an English firm (which does not wish to be named) to do some work in litigation. It is the same firm that Sidley already refers its litigation casework to.

Waterman says: “Traditionally, litigation is the only gap. We do have some litigation capability, but as we take on more trainees it becomes more difficult to do it. Obviously, we’d prefer to have them doing it here because the disadvantage is that, should they like doing litigation, they might end up going to the English firm. But there’s nothing we can do about that.

“It’s not really part of our practice, and it’s something that the Law Society requires us to train our trainees in. People who come here are not likely to be people who are interested in litigation work; people come here because they want to be in a transactional practice.”

The English firm in question refuses to comment on its motives, but the extra hands on deck in the litigation department and the hope of more referral work from Sidley & Austin must play their part. And Sidley & Austin will benefit from growing more rounded trainees should litigation ever become part of the agenda of the practice.

Other US firms such as White & Case have strong litigation capabilities in their IP practices. But another question mark hanging over the ability of US firms to offer full training is their lack of training seminars.

Sharp at LeBoeufs says: “When we’re bigger we’ll be better able to put on organised in-house seminars and the like. It’s difficult to do that at the level of the big firms. At Clifford Chance, for example, trainees will have a bigger and better programme of in-house seminars.

“We do have an in-house seminar programme focusing on the areas of law that are particularly important to us, and we send people out to external trainers – our second-year trainees went to insurance industry training, for example.”

Charlie Von Schmieder, who has just qualified into the IP department at White & Case, says: “It’s less structured than in a large firm – they don’t put together large training schemes, but I’m not sure it’s a disadvantage. I speak to other trainees at major City firms and they say that while some of these courses were interesting, they weren’t necessarily relevant to what they were doing on a day-to-day basis.”

Flooks at LeBoeufs agrees: “I personally think it’s pretty good, because what we do get is the training that’s particularly useful to us. The groups are smaller so it ends up being more of a discussion with everybody contributing, rather than sitting in the back of a big room not paying much attention.”

The salary differences are in some cases significant. While many match the magic circle to pay first-year trainees around £25,000, White & Case offers £30,000, and New York firm Weil Gotshal & Manges pays out £35,000.

In most cases the increase on moving into the second year is around £2,000, with Squire Sanders bucking the trend to go up from £25,000 to £45,000 as trainees finish their first 12 months.

Such high salaries are no doubt a tool to attract the best candidates, and probably make sense in the context of New York rates on qualification, which can be as high as £80,000 a year.

With more opportunity for seats abroad and massive exposure to international work, the US firms might just start winning the battle for the brightest young stars.

Waterman at Sidley & Austin says: “The idea of being able to do the quality of work that we have here without going into one of the extremely large firms is very attractive. The thought of being in that sort of conveyor belt atmosphere can be quite daunting.”

Sharp adds: “There’s a feeling that they are part of a team that they can understand and get their minds around. They know who everybody is. Even partners in some of the very big firms in London can’t do that – they don’t even know who all their partners are.”

It’s a proposition that could prove hard to resist for a lot of university leavers. Consultant Dan Wilkins at ZMB recruitment consultancy says: “Putting myself in the shoes of a graduate now: if I could double my salary by going to a US firm, and if I could satisfy myself that I’d be doing good work for good-quality clients, I’m sure I’d jump at the chance.”

The London firms will be hoping there aren’t too many budding Nigel Boardmans who feel the same.