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Commercial Awareness

Great question.

I wouldn’t say it’s driven from the fact that law firms are struggling to keep up with client demands or looking to be more efficient from a profit-seeking motive. And I understand where you’re coming from – that’s what I would have assumed. The issue is, big law firms have a huge pool of people that they can hire each year if they’re short. They’re also not the most efficient industry – they wouldn’t invest in technology unless they felt they had to.

Your second point is more in the direction of how it started – in an ideal world, law firms would continue to charge really high rates and make more and more profit. That was often the case pre-financial crisis, until clients became a lot more price conscious. Now, clients care a lot more about price. And that means in a very competitive legal market, where law firms are trying to compete for clients, they have to show they’re charging reasonably or they won’t win work. We see that happening in due diligence –some clients aren’t happy spending money for junior lawyers to do due diligence if must of it can be outsourced for cheaper.

Now that technology is available – it’ll soon become the standard (and it has in some cases) for clients to ask what systems are being used by law firms to make things more efficient. Law firms which can complete tasks cheaper and therefore charge lower prices may be the most successful. Law firms also tend to follow what other law firms are doing, so when firms like Slaughters and Davis Polk do it, the rest follow.

It may also not just be about cost – there’s some evidence that particular software can be more accurate than lawyers in certain areas – which’ll be an even more compelling reason for the more sophisticated clients.

At the deep end, I don’t think we’re anywhere near the case of lower hours due to technology – especially at the kind of firms you guys are applying to. At the moment the technology is reasonably rudimentary and so even if clients are more price-conscious and technologically-aware, they still need a big team to provide advice. It’s more the case that junior lawyers may shift and take on more responsibility – where previously they may have been proofreading or compiling documents – they’ll do the other stuff computers can’t do yet, like liaising with clients or project management.

Lawyers are hired to do the legal stuff clients don’t want understand or want to do, so even if it’s simply inputting information into legal-software, for the near-future it’s still what we’ll do.

 I think it helps to start with our current position. At the moment, the EU has a set of rules that determines (a) who has jurisdiction (the authority to hear a case) and (b) the ability to enforce judgements in a member state. That’s called the Brussels Regulation. 

It’s very extensive; the idea behind it is to stop ‘parallel proceedings’ (the same case being brought in different member states) and ‘irreconcilable judgements’ (conflicting judgements in different courts).

There’s been a fair bit of tension between the UK and EU regulation, but I won’t go into that here. The takeaway is that if an English court were to make a judgement, a party wouldn’t be able to pursue the case in another member state; the foreign court would respect the decision of the English courts. 

Now that we’re leaving the EU, we’re no longer going to be governed by the Brussels Regulation. And as the question rightly says, we’d want to negotiate agreements so other member states respect decisions made by the English courts. There’s currently two existing conventions which we could join – the Hague and the Lugano convention, or we could negotiate our own agreement (like Denmark). If we did, I think it’s likely we’d have similar provisions to what we have now. 

To answer your question, yes – if we didn’t have an agreement with the EU it would be a problem. If there were no rules, a French court wouldn’t have to respect judgements made by the English courts, nor would it be required to prevent parallel proceedings. In my view, that all seems very unlikely; the EU cares a lot about certainty and harmonisation, and in theory, we wouldn’t have to respect their judgements either – so no-one would benefit there.

Finally, with respect to the last point, I think it’s important to remember that the London Commercial Court has a lot of respect for reasons not to do with the EU. Foreign parties choose the court because it’s seen as fair, efficient and commercially aware. The court respects contracts (which companies like) and they’ve got great weapons at their disposal i.e. the power to freeze foreign assets and to stop parties bringing cases in other courts. 

I don’t know what kind of agreement we’ll end up negotiating, but I doubt it’ll be too dissimilar to what we have now.The EU has a lot of leverage, but they’d also respect the power of the courts we have.


I read ‘All you need to know about the City’ by Stoakes which I’d definitely recommend but sadly it’s not all you need to know: some parts are too basic, some too detailed and some irrelevant (I’m thinking the stuff on the reinsurance market).

I’d recommend a combination of The Economist (magazine and podcasts), BBC News (basic) and the FT (detailed). For finance terms Investopedia is good.

One of the most useful things I did was to summarise The Economist/recurring FT stories weekly and every time I didn’t understand something I’d research it until I did. Developing commercial awareness is like learning a new language: the best way to learn is to immerse yourself. I started out really unfocused but I slowly picked up how things connect with each other because I kept trying.

  • Clients: Kirkland has a strong sponsor-side practice, consider how many banks it represents and compare that to Weil.
  • Partnership: Look at what the press has to say, there’s a lot on this for Kirkland. Consider remuneration/bonus/competitiveness etc. Are people leaving?
  • Strategy: Compare the approaches both have taken to advance their London practice – Weil, for example, have historically focused on organic growth.
  • Practice areas: Both are good at PE, are there any other departments that Weil/Kirkland excel at? Consider this globally (hint – restructuring). Look at clients in other departments (hint – Lehman). How do they integrate their US offerings – think relationships and departments.
  • Culture: This ties in with partnership – see what you can find on the press. Do either emphasise a more cutthroat atmosphere? How about entrepreneurial? What are their intake sizes?
  • Geography: Easy one here, who is based where? Why?

It sounds like you’re taking the right approach. Use Chambers & Partners/Legal 500 to see what they do well and go through all the publications: Chambers Student, Legal Cheek and particularly The Lawyer (go back a couple of years on this one) to assess their past and present strategy, and search for any further press releases on the website. You’ll develop a detailed understanding of the firm, where they’re based, how they hire, what kind of deals they work on and often what the senior partner has to say. By then, you’ll have an understanding of what the firm is likely to do in the next few years i.e.

I’ll run through three practice areas which could be involved in a relocation:

Real Estate

  • What’s the length of the current lease? What are the termination provisions? Check contracts to consider the termination process and any provisions for early termination – can they agree/exercise a break option/sublet or even assign?
  • Will they be taking a new lease in Frankfurt – lawyers to negotiate appropriate cost and terms – consider parking, service charges, guarantees, repairs, deposit, requirements for landlord consent in potential changes, building hours, security, landlord and tenant responsibilities etc. German counsel may also need to consider any state-specific regulations/permits and insurance.
  • Are the constructing/refurbishing an existing building? This may need regulatory approval/planning permission under German and/or EU law. What kind of building quality does an international bank need? Office space?
  • How does it move all its infrastructure/assets across? Will third parties help with transportation? What about the environment? What about health and safety
  • Are people being relocated? Do they want to be – could this lead to potential litigation risks? What do their service contracts say – any mobility clauses or notice provisions? Where are they going to stay – will the firm accommodate for that relocation through compensation? Will they be housed? How many will be affected? What about their families? Is the bank giving enough time for consultation? Transportation and amenities? Does this discriminate against some? What about if an employee doesn’t want to relocate – are they disadvantaged/could they bring a suit
  • Will they be hiring new staff? What terms will that be in? Consider German/EU employment legislation.


  • How is the bank financing a relocation? Do they need to restructure? Issue equity or debt? Do they have cash?
  • What’s the budget? They may need to fund substantial amounts from insurance to infrastructure to marketing. Lawyers will negotiate the terms of these contracts.


  • What are the tax consequences of a move?
  • German tax counsel may need to opine and evaluate Frankfurt legislation.

It’s important to remember the general commercial issues too:

How does relocation affect the ability of a bank to serve products to its clients/customers? How about existing contracts and licences? Can it make use of the passporting regime from within Frankfurt – how? What about serving existing UK clients post-Brexit?

Yes, in a share sale it’s likely that all the assets and liabilities will automatically transfer to the buyer. The buyer now becomes the owner of the target, and rights/contracts/the business will generally stay in place without disruption. So if you’re concerned about saving the IP, a share sale might be a better bet.

Imagine you’re the CEO of a media company. You agree with the shareholders – and the rest of the board – to put the company up for an auction sale – that’s where a number of companies can bid to acquire your company.

You hire a team of advisors – investment banks, lawyers and accountants – to prepare the data room.

Much of the acquisition process now depends on:

  •  Why are you selling?
  • Are you looking for a quick sale?
  • How much are you aiming to sell the company for?
  • How many skeletons do you have in your closet?
  • Are you selling because your business isn’t doing well, or you just want to retire?
  • And many more…

Now if we don’t have the answers to those questions, we can still apply the considerations you listed to the media company. It does depend on what type of media company they are, but we can put forth some general considerations:

  • Finance: how does your company make money? Through subscriptions? Do you have evidence of a large audience? What are your projected financials? Are you diversified? What markets do you operate in?
  • IP. Try to be specific, what does that mean exactly? The value of its brand? Is it a reputable media company? Can you identify your intangible assets? Do you have trademarks, are they registered
  • Employees: Media companies are likely to have many employees, what kind of contracts do they have?
  • Technology: how do you optimise technology to cut costs? How are you dealing with competition from online services? How about apps? Or audio/video?
  • Contracts: What about contracts? Do you have deals with advertisers? Where do you get your data from?

The point is, try to think about what the purpose of a sale might be, and if you want to distinguish a particular type of company – what makes them different?

Finally, you’re right, intellectual property is central to the value of a media company. Counsel for the bidders will have to check whether its assets are protected, often by a search at the Intellectual Property Office or Trade Mark Registry – depending on the type of asset.


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