Hello – you have landed on our bank of training contract interview questions!

We’ve compiled this list of questions to help you practise for interviews and assessment centres at commercial law firms.

Why? Well, we’ve conducted 1000+ mock interviews over the past 6 years, and we notice a substantial difference in how quickly candidates progress when they practise answering real interview questions.

Our best advice for preparing for any interview or exercise, is to practise in a simulated environment as many times as possible. So grab your notebook, make a note of any of these questions that you’re not sure how you’d answer during your own interview, and start formulating your responses!

What kind of interview questions are included in this list?

This list is complied of questions around:

    • Your motivations for commercial law
    • Your character and personality
    • Your motivations for applying to [X] firm, and your firm knowledge
    • Competency
    • Commercial awareness
    • Ethical scenarios
    • Data, technology and AI
    • Law firms as a business
    • Mergers and Acquisitions, finance & insolvency
    • Business 101
    • Current affairs & the economy
    • Contract law

Are these real interview questions?

Over three-quarters of these questions were asked during vacation scheme and training contract interviews. The rest are variants of recent commercial awareness, case study and competency questions, all updated for your training contract interviews in 2024.

Why are these interview questions so difficult?

In our guide, we’ve grouped many difficult training contract interview questions together to help you practice, but don’t worry, in a real interview, interviewers will only throw a few of the difficult questions at you.

I want to know about the training contract interview at [X] law firm.

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Let’s jump into the questions!

Motivation for Commercial Law:

1. Why law? Why not law [insert degree]?
2. Why commercial law? Why do you want to be a commercial solicitor? What do you think of commercial law?
3. Why do you want to work in the City? Why do you want to work in [insert region] and not the City?
4. Why do you want to be a solicitor and not a barrister?
5. Have you considered other professions? Finance? Consulting? Why not? Wouldn’t you rather be in investment banking because of XYZ?
6. How does the role of a lawyer differ from a banker/consultant?
7. What are you expecting to gain from a career in law?
8 What are the qualities of a good commercial lawyer? What skills do lawyers need? Do you have these?
9. What do lawyers do/what work do they carry out?
10. What do trainee solicitors do? What makes a good trainee solicitor?
11. Explain how your (legal or other) experience is relevant?
12. What did you learn from your vacation schemes?
13. Why did you do [X] experience?
14. Why are you doing a post-graduate course?
15. Why did you choose to do so much non-legal work experience?

Character and Personality:

16. What does satisfaction at work mean to you? What does success at work mean to you?
17. What energises you? What motivates you? What makes you tick?
18. What’s your story? How did you end up here?
19. What are your long-term career goals?
20. Are you happy with your academic achievements to date?
21. Why did you choose the [X] course/module?
22. Could you tell me about [X] work experience?
23. Why did you choose an internship there?
24. How do you relax?
25. What do you do on the weekends? What’s your idea of a good weekend?
26. How do you like to socialise?
27. Have you travelled? How has learning [X language] helped you?
28. If you didn’t have to work today/if you won the lottery, what would you be ding now?
29. Where do you see yourself in five years?
30. What have you learned from your course?
31. Are you enjoying the GDL?
32. What is your favourite module and why?
33. Can you tell us about your dissertation?
34. Wouldn’t you rather pursue [subject]?
35. Please tell us about yourself.
36. What annoys you?
37. Why haven’t you got a training contract yet?
38. Do you usually achieve what you set out to do?
39. Are you a natural leader or a born follower?
40. What are your three greatest strengths?
41. What is your greatest weakness?
42. How do these help/hinder your work, and what are you doing about them?
43. What would your friends say are your good/bad qualities?
44. How do your friends describe you?
45. What achievement are you most proud of?
46. Do you have high standards?
47. Why are you a good person to have on a team?
48. What makes you the ideal candidate for the role? Why you over the other applicants?
49. How do you feel about working long hours?
50. What do you think about a work-life balance?
51. Why did you choose your university?
52. Why did you perform poorly in one of your degree modules?
53. What’s your biggest disappointment? When have you overcome significant barriers?
54. What would you say is your biggest failure/mistake?
55. Are you a robust person?
56. How do you react when the pressure is off?
57. What are your best qualities?
58. Pick anything from your application form to talk about.
59. Why did you not secure your last vacation scheme?
60. What are our values?
61. What values do you live by?
62. When have you had to divert away from those values?
63. When have you made a mistake?
64. Explain the disparity between your highest and lowest university grade.

Motivation and Firm Knowledge:

65. Why are you applying to [this law firm]?
66. Where else have you applied? How are your other applications going?
67. Do you have any other interviews/schemes?
68. Why did you apply to those vacation schemes?
69. Who are our main competitors?
70. What differentiates us from our competitors?
71. How would being a trainee solicitor at [our law firm] be different to other law firms?
72. If you had to choose between [magic circle/US/X law firm] and our law firm, who would you choose?
73. If we offered you a training contract, would you accept it? Even if [X law firm] did?
74. Have you had any contact with our law firm?
75. Who interviewed you [last time]?
76. How does your (legal or other) experience apply to our work?
77. How many partners are at our law firm globally? How many lawyers are in this office? How many trainee solicitors do we take on?
78. What do you find unique about the recent deals we have completed?
79. Why are you interested in our training program?
80. What do you see as the bad points of joining our firm?
81. What are our practice areas?
82. What are our key industry sectors?
83. Which of our practice areas interest you?
84. Why does that practice area interest you? (+ follow up questions to check your knowledge of the practice area).
85. What is our business strategy?
86. If you were the managing partner at our law firm, where do you think we would open an office?
87. What practice area/sector should we expand into?
88. How could we attract new clients?
89. Do you think pro bono/CSR is important?
90. What do you think about our recent merger? Why do law firms merge? Do you think it’s a sensible way to expand?
91. What do you know about the ways in which we engage our clients?
92. What is a Swiss verein?
93. How do we manage our law firm?
94. Who are our main clients?
95. How is our training contract structured?
96. If you were a trainee solicitor here, how would you get involved in the law firm?
97. What do you think makes a good trainee solicitor?
98. What secondment opportunities do we offer?
99. Do you know about any awards we have we won recently?
100. What are our core sectors?
101. Why do you think we have a sector-focus?
102. Do you think [our law firm] has a distinct culture?
103. Why do you prefer disputes over transactional work (and vice versa)?
104. What do you think the real difference between US and UK firms are?
105. What kind of work appeals to you the most?

Competency:

106. Give me an example of your ability to negotiate and persuade. How did you go about this, and how successful were you?
107. Tell me about a time which required you to produce something to a high standard in a fixed period of time.
108. Give an example of a time you experienced conflict or disagreement. How did you resolve this?
109. How do you encourage others to contribute to the task at hand?
110. How do you organise your time and assess priorities?
111. What would you do if you knew you couldn’t meet a deadline?
112. Tell me about a time when you had to deal with a difficult person.
113. Give me an example of a time when you were particularly creative in solving a problem?
114. Give an example of a problem you solved?
115. Tell me about an interesting piece of work you have done.
116. Tell me about a time where you have shown your dedication to the law.
117. Please give me an example of when you’ve worked in a team.
118. What complex issues did you overcome doing [X}?
119. Tell me about a time you had to handle a difficult relationship.
120. Can you recall a time when you acted over and above the expectations of your role?
121. Tell us about a time you worked under pressure.
122. Tell me about a significant crisis you have faced at work.
123. How do you resolve conflict in the groups or teams that you are a part of.
124. Describe a situation that involved multiple points of view.
125. Give an example of a difficult or sensitive situation that required extensive communication?
126. Tell me about a time when you were able to change someone’s point of view.
127. Tell me about a time when you were asked to do something that you disagreed with.
128. Can you tell me about a time you acted on your initiative.
129. What is the best team you worked in, what made it such a good team? Why is that important?
130. Describe a team that you were in, that was not performing well together, how did you fix it?
131. When have you had a setback? How did you overcome this setback? When did you take constructive criticism?
132. How do you think things will change in that time, what are the challenges currently facing the legal industry, and the wider business world in general?
133. How did you motivate your team, as this is a skill most lawyers need?
134. Tell me about a time when something went wrong and how you resolved it?
135. Unlike your above example, tell me about a time when you had to deal with a problem you didn’t foresee/a curve ball issue?
136. Tell me about a time when you had to deal with someone’s different opinion?
137. Tell me about a time when you had many priorities/deadlines and how you met them?
138. When have you worked in a team where others contributed and what was their contribution? What were your own?
139. When has a deadline changed and how did you deal with that and why did that come about?
140. When did you have to convince someone or a group to go your direction and were there any difficult members?
141. If you hosted a dinner who would you invite?
142. Tell me about a time when you added value to a team?

General Commercial Awareness:

143. Do you follow the business press? What’s caught your eye recently?
144. In terms of that story – what do you think a lawyer’s role would be?
145. What are your main ways of following the news?
146. Do you read the Financial Times? Which sections do you read? What do you do when you come across sections you don’t understand?
147. Do you know what’s on the front page of the FT today?
148. What caused the financial crisis?
149. Do you think bankers are to blame?
150. How do we stop it happening again?
151. What part would laws and commercial law firms play in a corporate acquisition?
152. What about an IPO?
153. What is an IPO?
154. When is an IPO a good idea?
155. What’s the difference between an IPO and venture capital?
156. What is private equity?
157. How do privacy equity firms raise money?
158. Why do companies merge?
159. What’s the difference between contract and tort? [law]
160. If you could change any law, what would you change?
161. What are the different ways a business can raise money?
162. What are the differences between equity and debt funding?
163. What is leverage?
164. What do you see as the main challenges facing commercial law firms today? How about our law firm?
165. Why are so many commercial law firms merging in recent years?
166. How can our law firm maintain a competitive advantage in this environment?
167. Tell me about a recent legal story that you’ve been keeping up to date with?
168. Which of our offices would you close down and why?
169. What are the needs and challenges of national retailers? How has e-commerce affected traditional retailers?
170. What does commercial awareness mean to you? How does it apply to commercial law firms?
171. What are the current issues affecting the banking and finance sector?
172. How does the state of the economy affect banking and finance work for commercial law firms?
173. What company is doing well at the moment?
174. Should we have left the EU?
175. How do you think Brexit will impact our clients?
176. Why is the UK trying to carve out a special agreement for its financial services sector?
177. What problems will businesses have if the UK does not secure passporting rights?
178. Should Facebook and Google be subject to more regulations?
179. What do you think about the GDPR? Do you think it will be good or bad for businesses? How will it impact commercial law firms?
180. What do you think about the growth of AI? Is that good or bad for business?
181. Why are you interested in emerging markets?
182. Are there any difficulties for businesses trying to operate there?
183. Do you think Donald Trump is right to be imposing tariffs on China? [Counter argument, don’t you think…?]
184. How do you think that will impact businesses? And commercial law firms?
185. Do you think the Federal Reserve should raise interest rates at a faster rate?
186. What is the impact of rising interest rates? What are the advantages and disadvantages of rising interest rates? Do you think interest rates are effective in influencing the economy?
187. What are the benefits of the Sainsbury’s-Asda merger? Why are they merging?
188. Name a deal we have done.
189. What role did our law firm have on the deal?
190. What were the implications and outcome of the transaction?
191. Which practice areas were involved?
192. Why was the deal significant for the parties?
193. What was the significance on the wider industry? Impact on the market?
194. What do we mean by “goodwill” in the context of an acquisition?
195. Tell me why you chose this topic as your topic of interest in your application?
196. Before initiating court proceedings what do you think is important to flag to the client?

Scenarios and ethical questions:

197. Imagine that you’ve made plans to meet a close friend, one that you rarely see. On your way out the office, you notice that the trainee solicitor in your department is flooded with work. It’s likely that she’ll be working all night. Do you do anything before you leave?

198. Imagine you are completing a piece of work for a partner but you are falling behind schedule. It’s not an urgent piece of work but you promised that you’d submit it before the end of the day. You don’t think you’ll finish it on time. What do you do?

199. Is it ever acceptable to lie to a client?

200. Are private equity firms unethical? Should they be allowed to buy a business and sell its assets?

201. You are sitting alone in your office. Outside, you overhear a trainee solicitor rudely talking to a secretary. The secretary is upset. Do you do anything?

202. You are having a busy day. A partner comes in to give you work. He says the deadline is tight. How do you handle that situation?

203. A senior partner at your law firm comes into your office to give you some work. You are trying to keep up, but he leaves before you get a chance to clarify the details. You have a fair idea of what to do but you are a little confused by one of the parts of the task. What do you do?

204. A client comes to you for advice. He is a high net worth individual. He tells you that his close friend has asked him to invest £200,000 for a business venture. He wants to know what questions he should ask his friend to make sure he makes a safe investment. What do you tell him?

205. You are working on a project with a client. The client sends an email to your team berating your poor attention to detail. You notice that it was the client who made the mistake. What do you do?

206. If your colleague was slacking at work because of personal issues that . they didn’t want to share with their boss, what would you do?

207. What would you do if your boss removed you from a project you’d been working on for a long time?

Data, Technology and AI:

208. What is cyber security?
209. Why is cyber security becoming more important for businesses and law firms?
210. Why do hackers target law firms?
211. What is the impact of hacking law firms?
212. How can law firms protect themselves?
213. What is the GDPR? Why does it matter for businesses?
214. How does the GDPR impact law firms?
215. How is the rise of legal technology and AI impacting law firms?
216. Should law firms care about legal technology? Why?
217. What does the law firm of the future look like?
218. Does technology threaten the future of the legal profession?
219. Should we regulate social media? Why?
220. Should social media sites be forced to remove “harmful” video footage?

Law Firms As A Business:

221. How do you think we remain competitive?
222. What are the biggest challenges facing the legal sector and how do you find out information about that?
223. How have clients and their expectations changed?
224. What is the “billable hour”?
225. Name a law firm that is a general partnership rather than a limited liability partnership?
226. What is a Swiss verein?
227. Which law firm has made a big splash in the London market, attracting lawyers from rival law firms?
228. Which law firm recently saw a former tax partner go to jail?
229. Name a law firm that listed on the stock exchange?
230. What is a lateral hire?
231. What is realisation?
232. What are billable hours?
233. Which of the magic circle law firms is known for being atypical?
234. What is the largest law firm by revenue?
235. What is profit per equity partner?
236. What is the difference between offshoring and nearshoring?
237. What is a law firm’s biggest expense?
238. What is leverage in a law firm?
239. What is an alternative business structure?

Mergers and Acquisitions, Finance & Insolvency:

240. Name three reasons why a company would acquire another company.
241. What is a share purchase?
242. What is an asset purchase?
243. Name three ways a company can raise finance for an acquisition.
244. What would a lender need to know before it provides finance to a buyer?
245. What are the differences between warranties and representations?
246. What could a law firm do if the parties wanted to begin negotiations for an acquisition, but they weren’t sure if they would receive regulatory approval?
247. A commercial law firm is advising a company that wants to buy the luxury chocolatier, Hotel Chocolat. Which legal departments will be involved during the due diligence process?
248. Why might intellectual property be important in the acquisition of Hotel Chocolat?
249. Pharma & Co wants to buy a rival company’s healthcare business. The healthcare business is just one of the many businesses that the rival company has, but Pharma & Co is not interested in those businesses. How should Pharma & Co structure the acquisition?
250. What is generally a safer asset to invest in: bonds or shares?
251. What is the name of a UK government bond?
252. What is generally a safer asset to invest in: bonds or shares?
253. What is the name of a UK government bond?
254. What does ETF stand for?
255. What do we call the date a bond becomes due for repayment of the principal?
256. What is the difference between net profit and gross profit?
257. What is a balance sheet?
258. What is synergy?
259. What is the difference between a horizontal and vertical merger?
260. What is a letter of intent?
261. What is the role of lawyers in M&A?
262. What is goodwill?
263. What are earn outs in M&A?
264. What is an advantage of an asset purchase?
265. What is a non-compete clause in M&A?
266. How can a company finance an M&A deal?
267. Why would a seller want exclusivity in an M&A deal?
268. What is the role of the CMA in an M&A deal?
269. What is a financial sponsor?
270. What is administration?
271. What is a derivative?
272. What is securitisation?
273. How is a merger different from an acquisition?
274. How do we define insolvency?
275. What is the difference between insolvency and bankruptcy?
276. What do we call the party that money is owed to? What about the party that owes money to us?
277. What is a joint venture?
278. What is a revolving credit facility?
279. When would you use an overdraft?
280. What is a syndicated loan?
281. You are the buyer. During due diligence, you discover an employee for the target company was unhappy and threatened the company with an unfair dismissal. What do you do?
282. Name the order you should repay money back to on insolvency:
– Fixed charge holder
– Floating charge holder
– Unsecured creditor
– Shareholder

Business 101:

283. What is a shareholder?
284. What does MVP stand for?
285. ‘Revenue is vanity, profit is sanity, but cash is king’ – what does this mean?
286. What is a monopoly?
287. Directors of a company have duties to their:
– Shareholders
– Creditors
– Employees
– Stakeholders

288. What is a stakeholder?
289.
What is a board of directors?
290. What do we mean by piercing the corporate veil?
291. What are ordinary shares?
292. What are pre emption rights?
293. What are preference shares?
294. What two reasons make a limited company more attractive than a partnership?
– Limited liability
– Separate legal personality
– Public nature of financial information
– Joint and several liability between partners

295. What are the articles of association?
296. What is a limited company?
297. What is a partnership?
298. True or false: it’s unlawful for companies to own shares in other companies

Current Affairs & the Economy:

299. Which tech company recently issued a dividend?
300. Who has said they might buy back WeWork?
301. What is generative AI?
302. Which US official recently lost a high-profile defamation case?
303. What is the current UK interest rate?
304. Why does rising interest rates impact law firms?
305. Why are companies finding it hard to exit?
306. What are the options to exit for a private equity fund?
307. What are continuation funds?
308. What is greenwashing?
309. What are sustainability-linked loans?
310. Which energy company is suing a climate activist group?

Contract law:

311. What are conditions precedent?
312. What is a covenant?
313. What is the difference between a representation and warranty?
314. What is the definitions clause?
315. A contract is breached. What are you suing for?
316. What do we mean when we say there is a gap between exchange and completion?
317. What does MAC stand for?
318. What is a force majeure clause?
319. What is a change of control clause?
320. What is unfair dismissal?
321. What is assignment?

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In 2013, President Xi Jinping officially announced China’s Belt & Road Initiative (the “BRI”, then known as the “One Belt One Road” or “OBOR”). The BRI is a proposal to revive the Silk Road and Maritime Silk Road that were established during the Han Dynasty of ancient China: the “Belt” refers to the overland links between China to Central Asia and Europe, while the “Road” refers to the maritime routes connecting Asia, the Indian Ocean, Africa, Europe, and the Middle East.
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Mamie
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Mamie HamshereTCLA Writer
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Title Author
On the surface, the BRI is essentially a major investment and infrastructure push by China to facilitate trade and international relationships through roads, railways, gas and oil pipelines into the West. China describes it as an economic and development strategy that would strengthen connectivity with the rest of the world. Criticism of the BRI however alludes to the alleged “unofficial” drivers behind the initiative. Such critics argue that the BRI is a way for China to increase its “soft” power, political influence and even military expansion abroad. Others argue that the BRI is locking vulnerable countries into a “debt-trap”.

And yet, as many as 74 countries have officially signed up to the BRI, accounting for two thirds of the world’s population. A further 80 or so countries and international organisations have participated, even if they have not officially endorsed the initiative, spanning across Europe, Asia, Middle East, Latin America and Africa. A whopping $3.67 trillion (£2.87 trillion) has already been invested. Then, on 23 March earlier this year, Italy became the first G7 country to formally endorse the BRI. The two countries signed a Memorandum of Understanding and 29 deals amounting to $2.8 billion (£2.15 billion) worth of projects. This was a major boost to China’s BRI – or as critics might say, a symbolic victory for a country looking to secure a bigger role in the West.
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Drivers behind the Belt & Road Initiative

The primary goal of the BRI is to create trading routes and to expand business and supply opportunities. The overland portion of the BRI encompasses new trans-Eurasia road and rail routes, and the success of this “Belt” thus far means that products can now be transported overland for 65% of the cost of shipping by air and a quarter of the time to ship by sea. The maritime portion of the BRI on the other hand focuses on maritime hubs and ports of entry into key markets. Italy’s northeastern Port of Trieste for example, has been described as China’s gateway to Europe, while its southern Port of Palermo could become a crucial point of connection for China into Africa.

There are of course motives behind this ambition.

For example, China is facing a number of problems at home. Its economy is weakening and the government is desperately trying to avert a slowdown. The BRI is therefore a stimulus package designed to create infrastructure opportunities and facilitate expansion abroad by Chinese businesses. The initiative is also intended to strengthen China’s Renminbi and transform it into a global currency (although, 6 years on, the dollar still dominates the majority of BRI projects and economists are questioning the success of this plan1). Furthermore, China is struggling with production over-capacity. The BRI would allow for a relocation of manufacturing capacity – as opposed to exports – which would diversify trade, mitigate rising labour costs within China, and even alleviate pollution issues.

Further theories of China’s motivations are more alarming. The USA has reported that China is using the BRI for military and naval expansion, arguing that BRI projects have been selected in places of geostrategic influence2. China rebukes this as “Western propaganda”. Vice President of the USA, Mike Pence, has also argued that China is using “debt diplomacy” to leverage influence. Those in agreement with Pence point to Sri Lanka’s Chinese- funded Hambantota port. In late 2017 Sri Lanka was unable to repay its debt to China and consequently gave control of the port to China on a 99-year lease.
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Opportunities

As an investment project, the BRI provides for a number of opportunities and advantages. These include:

Regions with high infrastructure needs such as Southeast Asia, Central Asia and Africa which will be a key target of the BRI.

Investment, construction and sponsor opportunities for the core elements of the BRI including roads, rail, ports, energy and the water sector. CMS’s survey of Chinese and international respondents concludes that ports in particular are emerging as the top investment sector.3

Growth and development in commodities, goods and commerce sectors (although a recent Reuters article argues that there is little evidence thus far that has proved increased demand for global commodities as a result of the BRI).4

Projects are unlikely to be “standalone” and instead each infrastructure project or transport route depends on the network around it. This will create a “value chain” meaning that each project will continue to provide ongoing opportunities.

Chinese banks have been set up for the sole purpose of financing and supporting BRI projects, including the Asian Infrastructure Investment Bank (“AIIB”) and the Silk Road Fund (“SRF”). These have the backing of the Chinese government as well as international ones – the AIIB has 93 member states – and aim to facilitate raising funds on global capital markets.

The political imperative on Chinese businesses to make the BRI a success (on October 2017 the BRI was written into the Communist Party of China’s constitution).

Urban development in key Eurasia hubs – and particularly those that are well-connected to trans-Eurasia routes. Chinese cities with their own China-Europe direct train are becoming increasingly attractive for business and investment.

Business and investment reciprocity with China. Historically, China has been heavily criticised for its slow progress in opening up to foreign investment and business. However, its commitment to the BRI seems to have coincided with a shift in this regard, especially as world leaders such as France’s Emmanuel Macron demand “reciprocity” and “balanced and fair trade” when dealing with China.5 Although France has not formally endorsed the BRI as Italy has done, in March France and China signed 15 deals worth a total of €40 billion (£34.4 billion). These include two major offshore wind farms in Dongtai, China, in a deal worth €1 billion (£860 million) between China Energy Investment Corporation and France’s EDF Energy. This is a major first step for EDF Energy entering the Chinese market. In addition, China recently passed its new Foreign Investment Law which aims to ease concerns and demonstrate an openness to foreign businesses. Critics, however, have pointed out that this new law does not go far enough in actually addressing such concerns and in addition have argued that it’s more a general guideline than an enforceable and clear set of rules. Ultimately, foreign businesses still appear to be largely under the Communist Party of China’s control when operating in China.
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Introduction

Challenges

It is clear therefore that the BRI comes with just as many challenges as it does opportunities, with such challenges varying between the political, economic, legal, commercial and geographical. The results from CMS’s survey into the greatest risks to BRI-related investments showed that over 83% considered ‘Political’ to be a top risk, over 80% considered ‘Macroeconomic’ to be a top risk, and over 60% considered ‘Environmental and Natural Disasters’ to be a top risk.6

Indeed, as of February this year, 14% (234/1674) of Chinese-invested BRI projects since 2013 have encountered problems.7 For example:

The BRI operates in a large number of countries and jurisdictions each with different standards such as engineering and construction standards, tax laws, regulatory frameworks, tender procurement laws, competition regulation and cultural issues. This means that there is no one-size-fits-all framework for BRI projects and transactions.

In addition to the above, local laws may affect the financing of the project. For example, foreign exchange controls or different regulations that affect the enforcement of securities.

National and local governments are usually heavily involved with projects and infrastructure. This can raise political challenges and means that any deal can be subject to government influence or ruling. For example, in 2017 the Nepalese government halted plans for a hydroelectric plant by Budhi-Gandhaki and China’s Gezhouba Group amid criticisms over the tender process.

The BRI is an especially political topic, given the strained relationship between China and the USA. China is already an economic superpower, and the world is cautiously waiting to see if it can take the USA’s spot as a world superpower. 8 With the USA’s strong rhetoric denouncing the BRI, states that would otherwise freely participate in the BRI find themselves stuck between China and the USA. Panama, for example, which was previously open to Chinese investment, has maintained a more nuanced position to manoeuvre its relationship between the two powers. It’s Vice President, Ms de Alvarado, commented carefully on the “debt diplomacy” criticism and noted that Panama is “not dependent on companies coming and financing our projects [but] countries that are vulnerable because their economies are weak, because they do not have a sound system to ensure that steps are taken considering their own interests, would be in a different situation.\”9

Environmental issues and natural disasters. A large number of the countries in which BRI operates are vulnerable to environmental disasters and problems. This can impede infrastructure deals, construction and ongoing operation.

• Emerging countries especially pose a variety of challenges. Often these jurisdictions have complex legal frameworks that are difficult to navigate. For example, Indonesia’s new Public Private Partnership (“PPP”) scheme encountered various regulatory discrepancies and conflicting laws. Emerging countries are also subject to political volatility, demonstrations and protests, histories of corruption and lack of existing infrastructure.

National security concerns are growing particularly in relation to Chinese businesses and Chinese technology. Huawei, Hikvision and Alibaba are some of those that have received lots of media and global attention.

Projects, generally, are subject to various challenges such as those above, as well as performance delays and public opposition. Furthermore, the complexity of projects mean that they involve numerous parties and numerous contractual arrangements between financiers, off-takers, construction contractors, consultants, lawyers, investors, and state-owned enterprises.
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Introduction
Part 2: \”Italy\’s Bet\” will be released in due course. Stay tuned!

References

1 https://ftalphaville.ft.com/2018/12/18/1545130791000/The-Belt-and-Road-s-dollar-problem/

2 https://www.cnbc.com/2018/12/24/china-belt-and-road-reported-military-implications.html

3 https://cms.law/en/SGP/Publication/Above-and-Beyond-Belt-and-Road-Initiative-investment-and-risk-outlook

4 https://www.reuters.com/article/us-column-russell-silkroad-commodities/chinas-bri-should-be-positive-for-commodities-but-evidence-is-elusive-russell-idUSKCN1S5165

5 https://www.european-views.com/2019/03/macron-demands-reciprocity-from-xi-on-chinas-belt-and-road-initiative/

6 https://cms.law/en/SGP/Publication/Above-and-Beyond-Belt-and-Road-Initiative-investment-and-risk-outlook

7 https://www.ft.com/content/fa3ca8ce-835c-11e8-a29d-73e3d454535d

8 https://www.bloomberg.com/graphics/2018-china-superpower/

9 https://www.bbc.co.uk/news/business-45961761
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Introduction
Mamie is an English Literature graduate from the University of Leeds who is now pursuing a career as a commercial solicitor. Mamie is drawn to the intellectual, international and complex challenges this career will provide. She is an ambitious learner and enjoys broadening her knowledge and developing her skills – some of her many motivations for joining TCLA’s commercial knowledge writers team. Mamie has been working as a paralegal for over a year, during which she has specialised in GDPR for a major telecommunications company. Having now secured a couple of vacation schemes, she is excited for what’s to come.
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Making the most of your training contract

Training contract success

A conversation with Lewis Malkin

Lewis Malkin is a third-seat trainee at Baker McKenzie. You might remember him from our last conversation:”How I Secured Six Vacation Schemes“.

In this episode of Trainee Talk, Lewis discusses:

  • What makes vacation scheme candidates at his firm stand out
  • How to prepare for your training contract
  • How to make a good first impression with your team
  • How to manage your workload
  • The importance of being proactive on your training contract

Once again, we hope you enjoy listening to it as much as we enjoyed recording it.

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Listen to the full interview using the SoundCloud player below.

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Interview Transcript

Jaysen [00:00:00]

Hi, everyone. Welcome to the next episode of Trainee Talk from The Corporate Law Academy.  I’m Jaysen, and for this episode, I’ll be your host.

Now, for this episode, we’re back with Lewis Malkin, a trainee at Baker McKenzie. We last spoke to Lewis in a previous episode of Trainee Talk, just before his training contract. So, if you haven’t heard that already, I encourage you to listen to that first. So, Lewis, welcome to the podcast.

Lewis [00:00:24]

Hi, everyone.

Jaysen [00:00:25]

This is actually our second attempt to record this episode and Lewis was kind enough to offer to speak again. So, in this episode, we’re going to spend time talking about your training contract, from the initial few days to how to make the most out of your training contract.

But, actually, before we get to that, I just want to touch on something you said to me recently, because it might be useful for candidates with upcoming vacation schemes. So, as I understand it, you recently had vacation schemers at Bakers. I just wanted to ask, while it’s fresh on your mind, what do you think makes a good vacation schemer?

Lewis [00:00:58]

I was buddies with two quite different types of candidates, and it’s quite noticeable the kind of levels of where they’re at. One of them had actually, ironically, listened to my podcast; it was the first thing she mentioned to me when she met me! So, it’s good to hear that it’s going to good use and the tool is helping people towards getting vacation schemes, and she got the training contract off the back of it.

I think the main qualities of a good vacation schemer are someone who comes obviously prepared, so they already know a lot about the firm, they know what departments they’re interested in and what they want to get out of it. And it means that they’re aware of some of the familiar things in [the] department they’re working in. So, I’m in my third seat, and I now sit in EU, Competition and Trade, and, obviously, that’s very topical. We do a lot of Brexit work, we do a lot of competition merger filings, a lot of trade compliance, and that’s something that people — especially coming out of university — they may not be too familiar with. Because, I can understand that people do EU competition modules, but I’m not sure to what level of depth they go into and how that translates into everyday kind of work, especially involving transactions. What I was really impressed by this one vacation schemer, was that she was already aware of some of these concepts that we were talking about — about trade cartels and listed export controls — and that was something that straightaway struck me. So, it was that level of preparedness of what the firm does, but also what you’ll be doing specifically within that week.

I think the second thing that made her quite a good vacation schemer was, by being aware of what was going on, she already had an idea of what work she wanted to get involved in. And so that kind of made my life a lot easier because I could help her navigate and speak to the people and work with the people that she wanted to. So then it means that you’re already kind of navigating your week as to what work you can get involved in. And, at the end of the day, what I always say to nearly all people I am buddies with for a vacation scheme, is that you’re there to try and get a training contract. Of course, you’ll be doing bits of work, and it’s important to do them right. But, at the end of the day, it will come down most of the time to that interview and the work that you do. And, it’s quite hard to […]stress enough the importance of the interview — but the reason why I’m getting onto this point is because, actually, the work that you get involved in and the preparedness that you have going into that vacation scheme [means] you can control the work you do — and, by doing that, you can control what you talk about in your interview.

I think what I said in the first podcast I did with you, Jaysen, was that your interviews are max forty-five minutes to an hour. You can control a lot of that time and one of the question [sets] you get asked most of the time, at the end of the training contract interview, if you’ve just done a vacation scheme, is: “What work have you done? What have you been involved in? Tell us about why you found it interesting?” And so, if you think about it, if you come in being prepared, and you already know what type of work you want to do, and you have someone who’s going to help you find that work and do that work well, [then] most of your interview is already pretty much done and the hard stuff is already out [of] the way.

So, I think, to summarise, the two things are: someone who shows an interest in what they do and researched it to a really high level of detail, obviously does the work well; you can’t get away if you do rubbish work, it’s hard to justify them getting a training contract because you’ll be working with that person day in, day out. But, it’s also someone who from doing all that work and being that level of prepared is able to understand the end game and able to control it as much as they can.

Jaysen [00:05:11]

That’s fantastic advice. One thing this reminded me of is that a candidate was recently rejected from a vacation scheme and the feedback she received was that she did really well with the work and the assessments, but what let her down was her lack of confidence. Would you have any advice for candidates about that? Because obviously they’re going to be very nervous. Especially if it’s their first vacation scheme, some candidates maybe feel more out of place than others, as well. Do you have any advice about how you can come across, make a good first impression, especially to you as a trainee?

Lewis [00:05:52]

I think everyone has a different kind of first impression and how they go about it. But I think someone who knows what they want to get out of it, but is also truthful about their own limitations. For example, I suffer from quite severe dyslexia, so that hampers me as a trainee, and I often have to spend extra time, a lot [more] extra time, probably, than others, checking my work and checking the level of detail required, because the way my brain works it wouldn’t be the same as someone else. That’s quite a niche example, but when I change seats I usually have that conversation with my supervisor and I say to them: “You know, this is something I know is my limitation and I want to work on.” And, to be honest, if you had that conversation with your trainee buddy you can say: “Well, I’m slightly nervous about this, or I’m not too confident on this.” They already start to understand who you are as a person and no one’s going to turn around to you and say: “Ah, that’s rubbish, you shouldn’t be getting a training contract, you can’t do this.” No, it’s not. We’re all human at the end of the day and I think if you can show that level of human side to begin with, it can make you into quite a personable character — because, at the end of the day, the people who are giving you feedback will be the ones who you know are promoting your cause.

In terms of confidence, to go back to the example [of] the individual you spoke about, I think confidence is hard to get, especially in the work you do, because the tasks you get in a vacation scheme can be so sporadic and it can be just because they need help at that moment from someone who can lend a hand. I think the best thing to do is ask for feedback as much as possible and just do the work to the best of your ability. And hopefully by doing that, your confidence will start to gain anyway. I think the work I did during my vacation schemes was very sporadic. But, as you can probably hear from the first podcast, I did quite a few of them. So, by the end I kind of knew what a trainee’s job was anyway, because I had so many vacation scheme tasks.

Just to summarise, I think you’ve just got to be honest with the person you’re working with; you’ve got to be realistic about your own ability; and just do the work the best you can.

Jaysen [00:08:37]

 I think you have really good advice when it comes to applications and vacation schemes, but let’s move on to talk a bit about your training contract. So, can you just remind us — I actually didn’t realize you’ve now moved into your third seat, so you’re not on secondment any more — can you just remind us where you are now and what seats you’ve done?

Lewis [00:08:57]

I’m in my third seat and I’m now sitting in EU, Competition and Trade, and that specifically focuses on a lot of competition work, where in corporate transactions it can be quite sporadic. So, you could be doing a lot of merger filings, ensuring that effectively a merger or a corporate transaction doesn’t breach EU competition law, and which is effectively designed around making a competitive market and not having individual companies monopolise certain markets. I’ve been doing quite a lot of that kind of work. The department also does a lot of broader competition advice and anti-competitive stuff, so vertical agreements and horizontal agreements between parties, which, if you studied EU law, I won’t bore you with the details now, but you can look up online and it’s quite interesting work. We also do trade, so that could be a lot of sanctions work and cartels, which is obviously very interesting because, usually, when things like that come up someone’s done something bad and it’s about working with the clients to minimise damage, and often you have to work with them and go to the relevant commission and authorities to try and limit the damage that can be done to your client. The fines are massive and can really make or break a company sometimes.

The final part is we do a lot of investigations work. So that falls under the umbrella of different competition law and can be holding interviews with two companies who may have formed a cartel. It’s quite an interesting seat because you get the level of corporate to also the litigation side, which I haven’t really experienced yet, and it’s something obviously very interesting.

But, to go back to your original question, so my first seat was in Energy, Mining, and Infrastructure, which is a subdivision of corporate that specialises in working with companies that are focussed in the energy sector. So, the department kind of splits itself between project finance, which is the funding of these massive infrastructure projects, or just the mergers and acquisitions side: so the buying and selling of those companies. After my first seat, I went on secondment to a client at Macquarie. Macquarie is obviously an Australian bank, but within them they have a division called MIRA. And MIRA focuses on the investment in real assets, so they’re almost like a private equity fund in that they get investors from all around the world. They have six funds at the moment, and they invest in different long-term infrastructure assets which will give you quite good returns over a longer period than a private equity firm usually would. That was obviously a very different experience, but because they had these funds set up and the life of the fund is usually about 10/15 years, they need to invest the money because these funds can be six billion euros. They’re massive amounts of money and they have a deal team in there which is always hunting for the next bid, always hunting for the next structure. And they go up against different similar funds. So, it has been quite a spread, quite a corporate [focus], now thinking back on it. But still, it has been really different types of work which I’ve been really lucky to experience.

Jaysen [00:12:34]

In my experience, it’s quite rare to get a secondment in your second seat. How did you manage to do that? Was it an application process? What was it based on?

Lewis [00:12:46]

We have an application process at Bakers and, I actually, I always knew that I wanted this secondment. I was familiar with it before I even joined and [knew] that we had a rolling one. I think I looked at all our clients, and I knew it was a corporate secondment, and I think I just started quite early on working with the relevant partner — who is a relationship partner with Macquarie — and having conversations early on about my interest. There was an application process, and I think it was like a one-page application. But a lot of my application was basically saying that I’ve worked with this company before; I find them really interesting; I think I learned a lot and the deal team sounds fantastic to work with. So, it’s not a complex application that you need to show some really high levels of detail, but I think the reason why I got it was because, in the background, I’d already been working with the half, not very subtly suggesting that I wanted to do it.

Jaysen [00:13:50]

Wow, so you went to this partner, you approached him? Presumably he was in your department, was he?

Lewis [00:13:56]

He was actually in our private equity department, but it’s quite odd because he does a lot of infrastructure private equity. So, I’d been working with an associate in my department who works with him across the department, and he was like: “Well, if you’re interested, go speak to him.” So, I went and spoke to him. I got ten minutes in his diary and told him that was what I wanted to do.

Jaysen [00:14:19]

Fantastic. It shows what you can get when you’re proactive about these things!

Lewis [00:14:23]

A hundred percent. I think one big advice I’d say throughout my training contract has been: If you don’t ask, you don’t get. I don’t think anyone will think it’s cheeky to ask for opportunities — because, if you just sit there, you can’t expect everything to fall into your lap, especially when it comes to client secondments. Or whether it’s like associate transfer programmes, which my firm does, where an associate would go abroad for a year; or international secondments. These things you’ve got to kind of make them happen for yourself.

Jaysen [00:14:53]

Let’s go back a little bit. When you first started your training contract, how did you go about making a good impression to your supervisor and the rest of the department?

Lewis [00:15:03]

I think because I already had a job before, at the firm, I already had an idea of what level of detail they were kind of expecting. And, I think it’s about showing that you can apply the right amount of detail and attention to the work you do. But, I think it goes beyond it; it’s understanding, as a business, how the firm operates, and if you can show these small levels of detail. So, for example, say you get given a task: Your supervisor is giving you an SPA, a Share Purchase Agreement, just to review, and you slapped it on your desk. You don’t really know what the transaction is, you don’t really know what’s going on; and they don’t really have the time to tell you what’s going on, which sometimes happens, sometimes doesn’t. Most people are usually pretty good at it, but in that situation, what I do is — if I wasn’t able to speak to the partner about the deal because he was too busy — I’ll go try to work out who the associates [who] have been working on it are, and try and get some time in their diary. Also, research your client: What is this big transaction? Why are they doing it? And that’s just the more commercial element of understanding what’s going on, that doesn’t require any legal knowledge. That just requires a bit of proactiveness to try and get to grips with the client and what it’s involved in.

And then, when it comes to obviously proofing an SPA, there are different ways you do it. There are different clauses you need to focus on, but that comes with experience and that’s not something you can be expected to pick up straightaway. But I think once you start to get involved in those big transactional documents early on, you start to understand how the whole process works. And then, even if you’re in meetings and you’re able just to start speaking up about “Oh, I’ve been working on this part of the transaction” or “I’ve been working with this document and I see now how this document feeds into the rest of it and how our bids are going to be produced” I think those are the kind of things that start to leave good impressions, because people can understand you’re picking up on how the whole process works within that department. I think to also leave good impressions with your supervisors, as I said, I told my supervisor early on that I suffer from dyslexia and said to him that sometimes tasks take me longer than other people. I think by having that conversation early on with him I was able to straightaway set his expectations of my expectations.

I think it’s quite important to show that you’re not this one hundred percent fantastic trainee; you’re not the finished article because you won’t be. No one’s perfect. But you can show, by having that conversation, you can show that you’re interested in improving a certain area which you don’t think you’re good at. I remember my supervisor honed in on really particular things all the time, and he was like: “I know I can do it because I know you want to improve that area”, and it was a pain in the backside sometimes, it got really frustrating! But it’s the way you’ve got to improve, and if you show that you want to improve, that’s one of the main things you can do to impress them. I think you’ve also got to work with different partners because there’s no point just working with one supervisor all the time. You’ve got to experience the rest of the department, because when they sit down to make a decision as to who they’re going to pick as their next trainee or as their next associate, when it comes to the end of your training contract, you’ve got to have enough people fighting your corner.

Jaysen [00:18:18]

So, you’re doing most of your work for your supervisor, but then you want to do work from other types of people, and that, to a certain extent, is what candidates on vacation schemes do as well.

Lewis [00:18:29]

Yeah.

Jaysen [00:18:29]

But, how do you go about finding that balance, not taking too much work on and just managing your workload?

Lewis [00:18:36]

I think you’ve just got to be honest a lot of the time. Every day, I write a list of all the work I know I’ve got to do. I’ll write two lists on Monday; usually, it’ll be the day and then it’ll be the week. And I’ll use my calendar, because I’ll know what’s coming up and what’s on the horizon, and what’s going to take up a lot of my time. I think you’ve just got to have a few conversations sometimes with your supervisor, and be like: “I’ve got this one, I know I want to do this. Do you think that’s realistic?” Because your supervisor is going to have a hell of a lot better understanding of how long stuff’s going to take you, especially at the beginning of your training contract, and how much time you can afford to allocate to other stuff. I think it depends what relationship you have with your supervisor, because some people have really close ones and all their workflow comes through them. But, some trainees sometimes end up having a quiet associate, or someone who isn’t that proactive, and then they have to go out hunting for work.

You’ve got to be aware of when the busy times are happening. I remember a couple of times when it was like an 80-hour week and it was horrendous! That did involve a Sunday as well, thankfully. So, it wasn’t just spread across five days. But I remember I was really slammed and I was pretty tired going into work and trying to do my work to the best of my ability that I could do. But, at the end of the day, I was still knackered. You can’t take away from that fact. And I still had the head of the department come to me, asking me to do stuff, and it got to a point where I just had to turn around to him and say: “I can’t take this on. I really would like to. Hopefully, if it comes up again please do consider me.” Now, if that doesn’t work, maybe go speak to your supervisor and they’ll have a conversation with that person because no-one’s there to work you to ridiculous levels. The best departments are the ones which spread their workload evenly across their associates and the juniors. But, sometimes that doesn’t happen. Sometimes, you know, people have to work harder than others because that’s just the way it works.

But, I think, even if you can’t do work, it’s about still showing that level of interest, or saying: “Oh, maybe I could do half and this other person could do the other half.” It’s just about finding a solution and not just saying no. It was quite hard at the beginning to get that balance right because you’re not able to understand how long most things will take. So, as I said, it’s important to have those conversations with people who are more experienced than you, early on. And then, as my training contract has gone on, I’ve been more accurate in knowing how long things are going to take me.

Jaysen [00:21:03]

A few trainees, they were actually quite active on TCLA, and they started their training contracts around, I think it was March now, and one of the concerns they had, too, was that they were struggling to find work. And also they were worried about leaving too early. So they were leaving about six or seven, and they were feeling like: “Okay, the other trainees in the department, they’re leaving much later than I am, maybe I’m not making a great first impression.” What would you say to that?

Lewis [00:21:33]

I think you should go when you can!

Jaysen [00:21:34]

That’s what I said!

Lewis [00:21:36]

Yeah, I think you should go when you can. It took me ages. It took me until my first two seats, until when I got my first two marks — because we get given marks for how we perform during our seat — so, really only about a month-and-a-half ago, did I start to feel really settled in my belief that if you’re doing something wrong or you’re not doing good enough, you will get told it. I have a firm belief that there will never be a situation where you do a bad piece of work for someone and they don’t have anything to say about it, or if they have something to say about it, but they choose just to sit on it. I think it is easy to get into that mindset that you think: “Oh, my god. Someone hasn’t replied to my email that I sent yesterday and therefore it must be the fact that it was rubbish.” I don’t think that’s how people work. I think people have different workloads. I think you’ve just got to have faith that if you’re doing something wrong, or if you’re not working hard enough, people will get on you.

There’s high times when I’m really busy. There’s times when, for example, last week I ended up leaving work one day at 2 a.m. and working until 11:00 most nights. That wasn’t a very good week last week. But, you know, this week I managed to say to my supervisor: “Look, I’ve been working pretty hard. I’m going to leave at 5:30 today”, and I just got up and left. I think you’ve got to realise that it’s easy to say it in the concept now, obviously having a training contract and being part of it, but it is just a job at the end of the day, and you need to have a life outside of it. And, if you don’t, you know, I’ve already seen it in trainees who just take on too much work because they’re afraid that they’re not doing enough and they’re doing more than enough. You’ve got to strike a balance. I’ve seen people get too overwhelmed and too stressed. So, take the time when you can to have a life outside of work and enjoy it, especially with the sun coming up! I mean, go outside! Spend as much time as you can: I think it’s really important to do that.

Jaysen [00:23:54]

I remember this is something you talked about the last time we tried to record this. I think it is definitely worth emphasising. It is such an important point that I don’t think many candidates hear from people in the profession. It’s coming out a bit more now, but just the importance of self-reflection and making sure that you do find your own kind of balance and say no to work if you’re too busy, and leave when you actually need to leave, if there’s no work to do.

Lewis [00:24:20]

I think especially as a trainee, because as a trainee you have a bit of a honeymoon period in the sense that you get protected a lot, and I’ve seen associates above me working ridiculous hours. And I think it only gets worse. So, I think you’ve got to take the time whilst you can, to enjoy your job but also enjoy your life outside of it as well.

Jaysen [00:24:42]

Was there ever a point early in your training contract where you were questioning whether this was right for you? Whether this was the right profession to be in?

Lewis [00:24:50]

I think I’ve done that a couple of times throughout my training contract, and I think it would be mad if people haven’t. If you feel you’ve gone through the training contract and not considered it — maybe not mad, that’s the wrong choice of word — but I’d be quite surprised, because, I think, when you’re in the position of applying for training contracts you have this belief that is seen as: This is this holy grail of a job. And, I think, it’s wrong to not suggest that it isn’t — I think it’s a fantastic job and I really enjoy what I do — but when you, when you’re on the other side and you’re trying to apply, and so you get rejected a few times, it seems like this amazing suits-like job that you’ll never get to. And, once you get it, you realise that, actually, you know, there’s good parts to it and there’s bad parts to it.

And, I think throughout my training contract, I thought: “Oh, you know, I find this interesting when I should actually be doing something like this.” And I think it’s important to think about it because, in your training contract, you’re obviously there to try get a job after, but it’s almost like it’s like a two-year vacation scheme; you’re working out what parts of law you find interesting, and do you find it interesting enough to do it? Not forever, but for a much longer period of time? And, I think, what I’ve tried to keep in mind throughout my training contract is that there are other jobs out there; law is not the be-all and end-all of everything. But it’s a fantastic job. If you find something which, I think, I have found, it’s something I find really, really interesting and something I think I want to do as an associate, and more because I get up and I enjoy it. There’s always parts I don’t like, but I like it more than anything else out there at the moment. That’s not to say that, in five years’ time, we could be doing a podcast and I would [not] have gone completely out the profession! Don’t be afraid. Don’t just sit there and say, after two months of your training contract, you sit there and you’re not too sure this is for you, or you think tasks you are getting given are pretty boring or quite standard or not really not that interesting. Then, I think, you just need to take that time out to reflect — and don’t worry, because other people are having that thought process, too.

Jaysen [00:26:57]

One of the reasons our last podcast was – so, that was our most popular recording of the year — you’re just very authentic when you talk about [your experiences]. I haven’t come across many trainees that, at least when speaking to candidates, where they’re open — to an extent they can be — but just open that law is just a profession, that things are good, at the moment, but it’s also okay if you find that things aren’t so good, especially when candidates go into the profession seeing this job as the most amazing thing ever, and they’re lucky to have it. It’s also important to note that you know there is another side of things: It’s okay to have bad days and it’s okay to talk about that.

Lewis [00:27:32]

Definitely. I think also, you know, law isn’t for everyone and I think that’s the great thing about a training contract. As I say the same with interviews, it’s a two-way street. You’ve got to work out if this firm is right for you. But I think a training contract is more you working out whether this job is for you. It’s a bigger question. Whereas the training contract interview is almost like, well, it’s a two-year thing to work out my training as a lawyer, but will I actually want to be a lawyer at the end of it? And I think it’s quite a surreal experience. But you do have to remember that, you know, you are a valuable asset. You are clearly good enough to be a lawyer if you get offered a training contract. You’re clearly capable enough of doing it. So, then it’s actually just about working out, well: Should I? Do I really want to do it? Do I really want to be a lawyer for a foreseeable amount of time? Do I find the work interesting enough? And I think it has taken me until about now to really work that out. And I think going on secondment is very different, as well, because going on my secondment in my second seat, I’d already almost opened up my eyes as to what other jobs are out there, like in-house teams and stuff like that, and that was an interesting experience because it made me feel that I was starting to consider the other things that were available and more, and the other jobs that were available. And I think you should take these opportunities when you can to have those moments to reflect, especially during a training contract, because I spoke to a few people who go in-house and they say, you know, the reason why they did it was because they got used to feeling unhappy with the work they were doing and they thought that was just normal — but actually they had a moment when they realised actually that’s not how work should be.

It sounds like a very sombre process, but I think it’s just about having your eyes as wide open as possible throughout the whole of your training contract, and making sure no doors are shut. And you can find doors that you never thought were there, especially from the example that I said about asking questions about going on secondment. You can create your own opportunities. I think that’s the most important tip I would have for any person going through their training contract, is to have your eyes as wide open as possible.

Jaysen [00:29:49]

How is the work that you did on secondment different to what you’re doing now?

Lewis [00:29:54]

I think it’s better to compare it to my first seat, because they’re both more corporate-focussed. I think the level of responsibility is significantly higher on secondment, so I didn’t really have anyone supervising my work, which, to begin with, was my idea of an absolute hell — because I think in your first seat you work with your supervisor and the people you’re working with, and the way the work flows is, it’ll go to the associate and the associate will then delegate it to the trainee, and there is a clear structure of responsibility. So, you’ll hand it then back to your associate, who may just have a few things to say, make a few comments, and then you send it out to the client, but there’s always that level of supervision. And I did still have a supervisor when I was on secondment, but he wasn’t going to check my work every day, and I think that’s quite hard to get your head around. But I think it really helped me improve as a lawyer, because I then realised that I was responsible for everything and I had to have justified reasons for why I was doing certain things. I think it’s also a bit different when you go on secondment, in that I was dealing a lot more with bigger transactional documents, which I probably wouldn’t have seen as much in my corporate seat. For example, it’ll be like NDA’s, SPA’s, Shareholder Agreements, that kind of stuff I’d be marking up myself. And it’s quite overwhelming to begin with, because you’re still not one hundred percent sure what the most important things are to focus on, but you’ve got a better idea. I actually, I think I learned so much through being given that level of responsibility — and you almost have these sink or swim moments. There are the times when I’d be negotiating points with other lawyers on the other side: it could be like senior associates and I’d be a trainee, and I just have to give off this impression that I wasn’t really a trainee, and it’s quite a weird experience.

I remember my first call I was negotiating, I think it was an engagement letter, and then the other side on the phone they said: “Are you a trainee? Because you sound like you’re a trainee.”

I was like: “Oh, no! The cat’s out the bag!”

It was quite a surreal experience. But, you know, you get more confidence as you go. So, really, I’d say the work differs in the levels of responsibility you get and the exposure to bigger documents, which you probably wouldn’t ever get to work on; also, the random nature of requests. I mean, I think, people in-house when they say they have like a deal team, like a banking team, they would never really have worked with lawyers. I think they believe that all lawyers have answers to all the questions and that we know everything! They just come back with questions on areas of law like employment. I got an employment contract and I was like: “I’ve never done employment law in my life! I’ve got no idea!” And you’ve just got to work through the problem. And, to be fair, most the time if you really need them, you end up going to law firms anyway, so it’s about working with them.

That actually leads me into the final thing. I think the way it differs is that you’re setting the deadlines, so you’re not working to the client’s timelines because you’re the client. It’s quite weird having that level of power, really. But through that experience, you’re able to notice what makes a good law firm or why the client will go back to the law firm. And, usually, it’s because of the levels of quality of their work, their ability to understand the business, and their ability just to work with them through the problem and be there whenever they need them.

Jaysen [00:33:19]

That’s interesting. Just to the point you mentioned before: The first deal I completed, I was, obviously, a first-seat trainee, and there was an associate on the other side. And after, I mean, I could tell that she knew, but she didn’t say anything throughout the whole deal until, right at the end, where she gave me a call and congratulated me for getting through my first deal — and she could just tell!  I thought I was pulling it off well, but I imagine she could tell!

Lewis [00:33:44]

The Great Pretender.

Jaysen [00:33:46]

Yeah, exactly! Well, I think, what I eventually started to learn — I think, most of the time, I just didn’t know what I was doing — but it became a case of, sort of like, faking it, making it seem like I knew what I was doing. Being honest if I wasn’t sure, but also, it’s okay to do stuff with a little bit of anxiety or uncertainty, but just getting on with it anyway, and then things usually do resolve themselves.

Jaysen [00:34:10]

You’re obviously on a secondment at a really early stage with very little supervision. How did you handle that uncertainty?

Lewis [00:34:21]

There was luckily a trainee who had been there before me, so I was able to speak to her with a few questions I had, and she just kind of reconfirmed what I thought. And she said: “You know, I’ve been through that similar experience. And, you know, it does get easier over time.”

If there’s something you feel really uncomfortable doing or you’re really not sure, then you’ve got to make the time to ask the relevant people the right questions and try and do it in a way that doesn’t bother them too much. So, go with a list of questions and say: “Hey, this is what I think I’m doing, I focussed a lot on this.” And, don’t be bullied by other people’s deadlines, because, actually, when you’re on an in-house legal team you can set the deadlines quite a lot. So, give yourself that space to not jump to anything when you feel really uncertain. And just be honest with yourself when you think that, say, you don’t feel comfortable, or you don’t really know. There’s no issue in turning around to deal teams and saying, “Look, I need to go and get this signed off by this person” or “I need to speak to this person because I don’t feel comfortable signing off for now.” And they’ll completely understand.

So, I think it’s just about being realistic with your own knowledge and expectations. As you say, not faking it until, or I think you do, I think especially in-house you need to give off this level that you know exactly what’s going on and just biding yourself enough time to work out what needs to be done. And that’s a massive skill in itself. And, it’s not just useful for being on secondment: It’s useful for your training contract as a whole. But I feel like once you’ve mastered that art, it can become a lot easier.

Jaysen [00:35:57]

Has anyone, either at the firm or on secondment, served as a role model to you, or a mentor?

Lewis [00:36:03]

My first supervisor, I had a conversation with him the other day about my training contract, and I said, you know, well whatever happens, whatever department I go into, I’d still like him to be my mentor. And he was more than happy to do it.

I think the reason why he was a role model for me is because he never sweats the small stuff. He understands that the small stuff needs to be done, but he is someone who is able to understand the value of a transaction and really wants to push the department that he’s in forward, as much as possible. And he’s just a, you know, the transactions he works on, he’s a seriously impressive guy. He really knows his stuff. I sat in his room for six months and the way he speaks to his clients is a way that I would like to be as a partner, if I was to become a partner. Just the way he really understands what relationships need to be made, you know, what their concerns are. And he’s able to do it by having a two-minute conversation and really get to the grips of what they’re asking. But, he’s also a role model because he’s just had a newborn baby. He really values his family time as well, and he knows that when he goes home he sometimes has to work, but he sometimes will turn around to me and say: “Look, go home. You know, you need as much family time as I do.” And it’s odd to have that as a role model. But, for me, it is quite important to have that person who understands, to go back to it: the idea that law is just a job, at the end of the day. There’s stuff outside of it as well.

Jaysen [00:37:38]

Slightly different type of question… But what do you normally do for lunch?

Lewis [00:37:39]

I actually met up with my friend the other day and he said I need to start coming down for lunch with the trainees more! So, I usually make my own lunch; it’s really sad, Jaysen!  We do have a good canteen, but I like going home, even if it’s really late at night, and cooking my dinner or cooking my lunch for the next day, because that’s something I can control. I always try to go to the gym, because that’s something I like to control. That’s “me” time. That’s what I do. And that’s the way I unwind. I probably will start to when it’s quieted down a little bit more, I will go and eat with the trainees in the canteen — but with my own lunch or, you know, if it’s a really busy day I’ll have lunch at my desk. But, yeah, as I said: I think I like having that control outside of my [work] life, the small things that I can dictate in my day.

Jaysen [00:38:47]

I also did that, and I used to think if I ate at my desk, I could end up leaving earlier. But that never ended up happening! It wouldn’t have made a difference.

Lewis [00:38:56]

Exactly! I think you can end up waiting around for a lot of people to reply to you, and so you could still be sitting there anyway.

Jaysen [00:39:04]

One thing I did struggle with: I used to go to the gym a lot before I started work, and then, at least — you know I was only there for a few months — but for those few months I struggled to find time to put the gym in there or structure my time around it. So, when do you go? How do you make sure you get that time?

Lewis [00:39:22]

I usually do it in the morning before work. And I’ve been lucky the last couple of weeks: I can go in the evening, sometimes. But some days you can’t do it. Sometimes, you’re just there until late and you can’t. But I get really jitty if I haven’t gone, and I actually feel it makes me work worse. So, sometimes I’ve turned around to my supervisor and just been like, “Look, it’s eight o’clock in the evening. I want to go. Do you mind if I just go home? I’ll go to the gym and I’ll log back on in an hour.” And ninety-nine percent of the time they’ll say: “That’s fine.”

So, I think that if you can have those conversations with your supervisors early on and say: “This is one thing that I like to do with my day. Do you mind if I do it?” then most people won’t have a problem with it. It’s just something that I have a firm rule on. And my old supervisor actually had the same rule. He said if you want to go play sport or if you want to go do that in the evenings, as long as you log back on. And, I think, once you’ve done it a couple of times, you create a level of trust and they understand that you’ll definitely do it and you don’t let them down, then, most of the time, they won’t have a problem with it.

Jaysen [00:40:24]

And, presumably, you’re also just checking your phone while you’re at the gym to make sure no emails come for you.

Lewis [00:40:29]

Exactly. So, I’ll have it on me. So, if anyone ever really needs to contact me, which they have done sometimes on the running machine — I’ve had some slightly awkward conversations! And, also, when I’m at the gym, I can see what’s coming in, so I can work out: Oh, actually, thank God I’m going home, because the problem’s already sorted itself out, or we don’t actually need to do that anymore. So, at least I didn’t spend an hour waiting at work to get an email. At least I went off and, you know, did something I wanted to do with my day.

Jaysen [00:41:01] Well, the last time we recorded this, I remember you had to go back into the office. That was like a Friday at, it must be like seven maybe, maybe after?

Lewis [00:41:08]

Yeah, that wasn’t a good day!

Jaysen [00:41:13]

Does it ever feel competitive with the other trainees? Do you ever feel like there is some sense of, you know, everyone’s trying to impress? Because, obviously, everyone wants to make sure they get taken on after their training contract.

Lewis [00:41:25]

Yeah, I think I think it’s hard to get away from that fact, because, unfortunately, everyone is in it for themselves. It sounds very Hunger-Games-esque, but it’s not like that. I think you need to realise that, at the end of the day, you’re there because you want to get a job at the end of it. And there’s nothing wrong with feeling like that. I think some people can go about it in completely the wrong way. So, I would never just completely take all the work from a trainee because I wanted to impress more. Because, I think, you eventually get found out if you have that… I shouldn’t really say it, but kind of “snaky” behaviour. I think you have to go about it in the right way. Say a trainee came up to me and said: “I’m really slammed and I’ve taken on too much work, can you help?” I’ll always help them. I won’t be like: “Well, you know, that’s your fault for taking on all that work!” Because I think that can just end up being a really negative environment to work in. As I say, you need to be aware that you’re there to get a job and you need to make sure that you do the best you can to get a job that you want, because other people will be doing the same thing. But that doesn’t mean that you have to be a complete… I won’t say the word!

Jaysen [00:42:39]

We have some candidates now that… so they’ve secured their training contracts, they aren’t due to start just yet, and I know the last time we spoke to you, you had a little bit of time before you were about to start your training contract; what do you think candidates should be doing? Should they be preparing really hard? Should they take a break? If they should be preparing, what should they be doing before their training contract? Or [do you have] any advice just about that?

Lewis [00:43:03]

They should definitely take some time off, because they won’t be getting that time, that level of time, again, usually. I say the same things to my friends who change jobs. I usually tell them to tell the job you’re going to that you’re starting a bit later, so you can have a little bit of a break. Because, you know, you could go travel, you could do a hobby, you could do whatever you want. But it’s important to get that relaxation time before you start, because, I think, the first couple of months when you’re at work, you’re always anxious and that can take its toll on you and become quite tiring, quite early, quite quickly.

With me, we had two weeks of training before we started our proper training contracts and we didn’t find out what seat we were in until the end of the second week. So, it wasn’t really like I could do that much preparation. But if you know that you’re going to a certain department, I’d say read about the people you want to work with, stay up-to-date with the news and what you find interesting, because that can already start the way you want to shape your six months in that department. I personally would try to switch off as much as you can, because you’ll be switched on at work. Enjoy the time while you can.

Jaysen [00:44:18]

Before you started your competition department, did you go through that as well? Did you research competition or did you just go for it?

Lewis [00:44:26]

We had really intense training, which was really helpful. But for the last two weeks, I did read up on that area of law specifically, because I thought it was something I was really interested in anyway. And it was my preference seat — so we get one preference seat during our training contract — it was one that I knew I really was always gonna be interested in. So, yeah, I did a bit more research into it.

Jaysen [00:44:53]

One final question: Knowing what you know now, is there anything that you found surprising about your training contract or anything worth highlighting?

Lewis [00:45:04]

There are good sides and bad sides to it! Some of the work can be really, really interesting and very topical. And the level of personal relationships you create at such an early stage of your training contract with your peers and other companies, I found to be really surprising. I thought that was a bit of a myth, but you actually do, you actually start to feel really integral to building a client relationship. And I found that side really interesting, as well as specific parts of the law.

But, you know, yes, the work can also be quite mundane and quite boring, but, as it can be with all jobs, I think you get over that pretty quickly. I really like the people I work with and I’ve found that also, not surprising, but the amount I’ve enjoyed working with some people in a team environment has… I thought it was more of a cliché usually, that teamwork aspect. But, you know, it really does end up having people working late and together and you do really get into a team spirit kind of vibe. And I’ve enjoyed that a lot more than I thought I would.

As I’ve said throughout the interview, I’ve been surprised about the amount of opportunities you can create for yourself if you ask the right questions and you’re proactive. I think that’s definitely another thing I’d once again stress. I think [what] people should take away from listening to this is that you can shape your training contract in whatever way you really want to — bar picking the seats. You can work with the people that you want to, and as long as you’re proactive about doing it, you can come out with a job and have had a wonderful two years. It’s really important to do that.

I’ve been just surprised about how willing people are to help you as well. If you show a level of interest in an area and you’re willing to push that forward, most of the time nearly anyone is ready to support you doing that.

Jaysen [00:46:54]

Fantastic. That’s a nice positive way to end this episode. Thank you, Lewis. Your interviews are always very refreshing. The feedback we had from the last podcast was amazing, so I’m sure it would be similar for this one.

Lewis [00:47:09]

Yeah, well, next time, in my fourth seat, I hope to go abroad, so maybe the next time we do this it’ll be from another country. I can let you know what it’s like working in a foreign jurisdiction.

Jaysen [00:47:25]

We get to track your progress to associate and beyond!

Lewis [00:47:28]

Exactly. We shall see!

Liked this episode? Check out the rest of our podcast episodes here.

Africa: Should businesses and law firms still be investing in this emerging market? In simple terms an emerging market is a country which is shifting away from their traditional economy and developing their productive capacity. However, it is difficult to come up with a comprehensive definition, so emerging markets are typically defined by five key characteristics.

Lower than average per capita income (less than $4.035)

Rapid economic growth

Highly volatile – stemming from natural disasters (especially if reliant on agriculture), external price shocks and domestic policy instability

Less mature capital markets (in comparison to developed economies)

Higher than average return for investment

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Oliver Gilliand
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Oliver GillilandTCLA Writer
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Why are businesses and law firms drawn to Africa?

Economic Growth: According to a PWC survey, the primary driver of investor interest in African markets is the continents rapid economic growth, forecast at 3.2% this year and 3.5% for the next (up from 2.4% the previous). The top performing economies of the continent being Ethiopia with growth of 8.5%, Ivory Coast with 7.4% and Rwanda at 7.2%. Although this growth is not the high double-digit growth we used to see, it is still substantially higher than many of the BRICS economies. For instance, Brazil experienced merely 1.3% growth in 2017-8 and Russia at 1.5%. High economic growth is attractive to an investor primarily as it is an indicator of increased market demand, so there is an incentive to invest in order to satisfy this increased demand and capitalize on the potential profits.

Population Growth: Closely linked to economic growth is Africa’s growing population, set to grow 50% by 2030 to 1.5 billion. Moreover, Africa has a rapidly growing middle class. This is attractive for business as there is an increased consumer base with more disposable income to sell goods and services to.

Natural Resources: Natural resources are abundant in Africa; it’s estimated to contain 90% of the entire world supply of platinum and cobalt, half of the world\’s gold supply, two-thirds of world manganese and 35% of the world\’s uranium. It also accounts for nearly 75% of the world\’s coltan, an important mineral used in many electronic devices. This is a big deal for investors as much of these resources are untapped and in need of investment to be fully utilised. For example, in fully explored countries the average square kilometre of territory has beneath it $114,000 of known subsoil assets, whereas in sub-Saharan Africa this is merely $23,000. This is unlikely to be due to merely a difference what is actually there, but rather represents a rich untapped market and potential for future rapid economic growth.

The New Low-Cost Manufacturing Hub of the World: China’s long-lasting reputation as the world’s factory has dwindled in recent years. The labour pool has shrunk as a result of a generation under the one-child policy and hourly manufacturing wages rose by 12% annually since 2001. According to Justin Yifu Lin, a former chief economist at the World Bank, “China is on the verge of graduating from low-skilled manufacturing jobs… That will free up nearly 100 million labour-intensive manufacturing jobs, enough to more than quadruple manufacturing employment in low-income countries”. Africa, on the other hand, is experiencing a population boom set to reach 2 billion by 2050, and is projected to be the largest global labour pool. Equally, labour-cost is low across Africa, for instance a low-skilled factory worker in Ethiopia costs about 25% of the pay of a comparable Chinese worker. Africa seems to be the natural destination for low-cost manufacturing jobs being priced out in China. This is highlighted by the fact China has significantly increased its manufacturing investment in Africa, most recently having announced it will be investing $60 billion in financial support to Africa at the China-Africa Cooperation Forum.

Increasingly favourable regulation: Another factor is Africa’s constantly improving regulatory landscape. According to this year’s Doing Business Report a record number of 83 regulatory reforms were made across 36 of 48 economies in Sub-Saharan Africa. This represents the largest ever number of reforms recorded by the report and 31% of global regulatory reforms.
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So where should law firms be investing? – An overview of the Continent\’s Legal Market

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As a result of the sheer size of the continent there is no obvious central hub to invest into be connected to the entirety of African business. This means the most appropriate location to invest in Africa will ultimately depend on the individual firms’ specialties. In the North African legal market, Morocco has taken great strides to become an international financial centre through passing favourable business laws, tax incentives and simplified visa and work permit procedures. This has led firms like Baker McKenzie, DLA Piper, Dentons and Clifford Chance to set up offices there.

The Tunisian, Libyan and Egyptian legal markets are less attractive now. Tunisia is still recovering from the Jasmine Revolution, while Egypt is dominated by local firms make it extremely difficult to break into.

The Sub-Saharan legal market is renowned for its rich natural resources but is taking steps to develop its telecoms and financial services. In West Africa, many firms have been drawn to Abidjan as it is the headquarters for many businesses including the African Development Bank, while Cameroon could be a hot destination for IP specialists as the African Intellectual Property Organisation is based in Yaounde.

The South African Market is considered the most mature. What differentiates this legal market is the well-established infrastructure which is lacking across most of the continent. On top of this there are high levels of PE and M&A activity, attractive levels of FDI, growing technology and telecoms industries, strong capital markets (home to Africa’s biggest lender Standard Bank Group) and the traditional natural resource sector saw massive growth in 2018. However, the legal market is saturated particularly in Johannesburg, which makes it a difficult market to tap into. For instance, international heavyweights such as DLA Piper, Hogan Lovells, Allen & Overy, Baker McKenzie all have offices there. Not only this, but prospective firms have to consider the competition from the ‘Big Five’ which are considered the most sought-after firms in South Africa – Bowman Gilfilan, Cliffe Dekker Hofmeyr, ENSafrica, Norton Rose Fulbright and Webber Wentzel.
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Introduction

Country Focus: Angola

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Angola is set to become an attractive destination for law firms seeking to invest in Africa. It has experienced huge economic growth in the last decade, propelled mainly by its huge oil exports and ranks today as the third largest economy in sub-Saharan Africa. The country has shifted away from civil war and now enjoys relative political stability, increasingly favourable regulations and a wealth of investment opportunities.

Strengths

Relative political stability: Angola has regained relative political stability since the 27-year civil war ended in 2002, shifting from -1.5 to 0.29 on the World Banks political stability index. This has been enhanced by an established parliamentary system and limitation of presidential terms introduced in 2010, removing the old direct popular vote. Although, the World Bank ranked Angola 20th on its political stability index across Africa, it has not experienced the same level of violent protests as other African countries and is continuously improving. For instance, Cameroonian President Paul Biya’s re-election bid admits a constitutional crisis in the Anglophone regions escalated tensions, while, Tongolese citizens continue to protest for the end of the 50-year Gnassingbe dynasty.

Rich Natural Resources: Angola is a member of OPEC and the second largest producer of oil in sub-Saharan Africa and the fourth largest diamond exporter. Moreover, there are several untapped mineral sources including, manganese, copper, gold, granite and marble, which could have huge potential for long-term economic development. For instance, the government estimated that over 5,000 cubic metres of marble could be extracted annually.

Population: Angola has the third largest market in sub-Saharan Africa at 29,784,193.

Increasingly Favourable Regulation: Angola has recently revised the notorious Private Investment Law, to boost investment. This law previously required foreign investors to grant a 35% share in the capital of the company to Angolan companies or citizens. The revision has completely removed this requirement, which will make the country far more attractive to invest as businesses can retain their entire share capital.

Weaknesses

Oil Dependency: Angola’s oil exports account for 95% of its exports and 45% of it’s GDP, meaning it is currently incredibly dependent on oil for economic growth and in turn is vulnerable to price fluctuations.

The Workforce: Angola’s workforce is mainly unskilled and has an unemployment rate of 26%, which sustains a high rate of poverty. While unemployment is not necessarily a problem for business, as this simply represents easy access to labour resources, the main issue is that the workers need training. Moreover, the problem is exacerbated by restrictive employment laws, as fixed-term contracts are disallowed and the minimum wage of $126 is one of the highest across Africa.

Transport infrastructure: Angola’s poor infrastructure is a major obstacle for investment and diversification of the economy, ranking 127/140 in 2017-18 for overall quality of infrastructure. This is problematic, as infrastructure is reliant on reliable delivery and manufacturers are also at high risk of losing their goods in transit.

Underdeveloped capital markets: Currently Angola does not have a stock exchange, which is a major gap in its economy. Stock markets are crucial for businesses looking to raise capital through selling shares, meaning financing options are severely limited in Angola, holding back non-oil growth.

Corruption:A deterrence from investment in Angola has been the plague of corruption that has swept the nation. It currently ranks ask one of the most corrupt nations in the world, at 163/167 on the Corruption Perception Index. This has manifested itself in varying forms, from a lack of transparency and political corruption to embezzlement of public resources and entrenched patronage systems. Corruption generally deters investment, as it creates uncertainty of investment outcomes and decreases the expected returns. However, the new president Joao Lourenco has recently pledged to fight the “cancer of corruption” and has taken some big steps already by dismantling his predecessors’ families influence over key sectors of the Angolan economy. For instance, he fired the previous president’s daughter Dos Santos, the chairwoman of the state oil producer and dismissed his son Jose Filomeno, as head of the country’s sovereign wealth fund. Jose was later arrested for money-laundering, embezzlement and fraud, following an investigation concerning a suspicious $500 million overseas transfer from the country’s own sovereign wealth fund.

Opportunities

Renewable energy projects: Renewable energy projects are currently gaining a lot of traction across Africa. This is largely due to the projected tripling of African energy demand by 2030 and an increasing concern over the damage of carbon emissions. The environmental concern is highlighted by the fact that all but three countries in Africa have ratified the Paris Agreement. Moreover, access to power is crucial to the national development of nearly all African nations, as nearly 600 million residents do not have access to electricity.

Angola is particularly well positioned to benefit from this increasing demand in renewables, due to a combination of its government policy and its favourable natural environment. The Angolan government is strongly committed to renewable energy and has launched a strategy to generate 70% of its power by renewables by 2025 (one of the highest in the world). As a result, the government has taken steps to enhance the attractiveness of FDI into renewables, by establishing subsidised tariffs and reforming the regulatory framework. Equally, Angola is a prime location for renewable energy projects, as mapping has identified a potential of 55GW of solar power and 18GW of hydropower in the country.

A surge in energy project demand is great news for law firms – as lawyers will be required from all manner of departments such as projects, finance, litigation and corporate to facilitate the developments. Lawyers are required for tasks such as negotiating and drafting agreements, providing regulatory advice and representing either the developers or the financiers to allocate risk in the financing of a project.

Opening of the Angolan Stock Exchange: The potential opening of the much-anticipated public stock exchange would create a wealth of opportunities for businesses and law firms. In a general sense, a public stock exchange would provide much needed alternate financing options for businesses, which would assist in diversifying the economy. This would create a long-term increase in economic activity. Equally, a public stock exchange would mean many businesses would be seeking legal advice regarding IPOs. However, the downside is that the public stock-exchange has been continuously delayed since 2002 due to inadequate corporate-governance practices and a lack of an educated financial culture. So, it is questionable whether it will ever actually materialise. Although, in 2016 Angola did begin trading in government bonds, which investors have considered an important first step.

Threats:

As the Angolan economy is so dependent on oil, falls in oil prices can be disastrous to the economic well-being on the country. This was highlighted in March 2016 when crude oil went to its lowest level in nearly a decade, causing a rapid decline in the flow of US dollars into Angola and in turn the national currency the Kwanza to depreciate by 35%. The knock-on effects of which caused food prices to rise (the price of a bag of rice increased fivefold!) and a health crisis emerged as medicine became scarce. This means a business’s success in Angola is dependent in part on a stable or rising oil price to ensure economic activity does not fall. However, the Angolan government is taking steps to reduce its oil dependency. Most significantly, the IMF recently approved a $3.7 billion fund facility to support the country’s economic reforms. This includes the National Development Plan for 2018-2022 to address “structural bottlenecks and promote human development, public sector reform, diversification and inclusive growth”. The National Development Plan aims to achieve diversification through introducing VAT, eliminating subsidies, clearing domestic arrears and undertaking structural reforms, such as restructuring state-owned enterprises and reducing corruption. This is promising for Angola’s long-term economic future, as, for instance, the fund could be used to fuel much needed investment into the countries agricultural sector. Angola has the potential to become one of the leading agricultural exporters in Africa if enough investment is made, considering only 10% of its 58 million hectares of arable land is currently being exploited. Equally, as Angola makes strives towards economic diversification it will, in turn, become a more attractive place to invest, both due to the reduced risk from oil price fluctuations and the new projects that emerge from the diversification policy.
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So How Should Law Firms Invest in Africa? – Best Friend Networks vs International Offices

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There are 5 main ways law firms can invest internationally.

Merge with a local firm;

Acquire a local firm;

Use an international hub and operate on a ‘fly in’ basis;

Establish independent new offices; or

Establish “mutually beneficial” alliances or “best friend networks”
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In the infancy of the international African legal market the work was traditionally conducted from international hubs in Paris, London and Dubai. Clients then hired local lawyers to work on the transactions. However, as the markets matured the most popular trends became the establishment of independent offices or the establishment of best friend networks.

There is no one size fits all when it comes to how firms should invest, and each method has its own sets of pros and cons. Ultimately how a firm should invest will come down to three main factors. First, where they are investing? Considering the saturation of the market, if its already dominated by local or international firms, is it worth setting up a new office? This may depend on whether the firm has existing clients, which are seeking advice in the area, making it easier to penetrate a saturated market. The capital available to the firm – law firms are generally not capital intensive and need to seriously consider whether the cost of setting up a new office is commercially viable. Second, the firm’s international strategy – is the firm seeking to establish a consistent global brand or is the firm trying to remain flexible while delivering the best possible legal service to its clients?

Best Friend networks are essentially relationships between international law firms whereby they refer work which matches their expertise. This has the big advantage of flexibility, Law firms using these networks are free to refer their work to whoever they believe is most capable, which arguably allows them to offer clients the best local advice on an issue. However, the biggest downside to this is that there is no way the firm can guarantee a consistent culture and international standard across its ‘network’ and risks bring in local dead wood from other firms. This has led many firms to favour setting up their own offices to guarantee clients a consistent service, wherever their issue may arise.
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Introduction
Oliver is a member of TCLA\’s writing team. He is a recent law graduate from the University of Nottingham.

You can reach out to Oliver in our forums by clicking here.
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Preparing for Vacation Scheme Interviews

 

What I learned securing seven vacation schemes

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You have submitted your application and completed the psychometric tests. It has been a long journey so far with hours of research and proofreading in order to hone your application and make it stand out. But it does not end there. The assessment day is the final stage before securing a vacation scheme and arguably the toughest hurdle to overcome.

Applicants will often be tested on several competencies such as communication, teamwork and analytical ability through a variety of exercises, and this will vary depending on which firm you have applied for. One guarantee is that you will always have an interview, either with graduate recruitment or a partner and an associate. Therefore, it is imperative that you really and I mean REALLY prepare for the interview. Not only is this a key way to stand out and demonstrate the competencies that the firm looks for, but you will undoubtedly make a strong case as to why you want to work at that specific firm. This is the process that many of us go through each year, with the hope of securing the all-important training contract at the firm of our choice.

This piece will outline ways, which can help you prepare for one of the most important interview questions, and one that you will always be asked: Why this law firm?

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Researching the Firm and Area of Focus

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You have most likely completed some research in order to complete your application form, but it is important to undertake extensive research on specific aspects of the firm. A good method that I have found to be useful is to focus on three aspects: work/practice areas, training, and culture of the firm.

(i) Work/Practice Areas

This is where you can really show that your interests align with the firm and the work and transactions that it handles. It is important when answering this to first explain why this practice area is of interest to you (perhaps you have attended several workshops on this or studied a corporate module at undergraduate/postgraduate level), and secondly to link it back to the specific firm. It is always great to have 2-3 practice areas (especially if the firm is a full-service firm) that you are interested in and can comfortably talk about.

For example: If you have a strong interest in private equity be sure to research any recent deals the firm has completed and understand what that means for the firm’s client and their position in the market. Also, understand which side the firm typically acts for (e.g. in private equity, if the firm represents the sponsor or the lender), and why that is of interest to you.

(ii) Training

This is another big area that law firms pride themselves on, therefore, make sure that you know the type of training programme that the firm conducts and what seats you will have the opportunity to do. Some law firms make it mandatory to complete several seats so make sure you are aware of this as well.

Some good points of focus are Mentoring Schemes that the firm conducts, if you will have a Trainee Buddy and how often there will be a formal appraisal and review of your performance at the firm. When researching these areas be sure to think about how you feel such initiatives will affect you and further your professional development.

For example: If you apply to a top US law firm, which will often have a small trainee intake (or at least smaller than most London-based firm) you will be given a great deal of responsibility. Highlight in your answer why this appeals to you and how you have already demonstrated the requisite skills e.g. adaptability, confidence and organisation, to succeed in such a high-paced environment.

(iii) Culture

This is where a candidate can really stand out. Factoring in how you think the firm’s values and culture align with your values and is somewhere where you will fit in and excel is an important part of your answer to why you want to work at that specific firm.

Law firm’s pride themselves on their culture and why they are different from other firms, therefore, it is key that you understand this and highlight this in your interview. To really get a feel for the culture of a firm, apply to open days, attend law fairs and really put yourself out there. The best ways that I have been able to understand the culture of different firms is through networking with their trainees and the graduate recruitment. That way you are able to understand if that specific law firm is the ideal place that you would like to work at.

If you make sure that you know the firm’s business well, what if offers to their trainees and what the culture of the firm is like, you will be sure to nail that answer and already give yourself an advantage in the interview process.
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Introduction
Andreas Hadjipavlis is a member of TCLA\’s writing team. He is a final year law student from the University of Nottingham. Andreas secured four vacation schemes last year and is due to complete three more this year.
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Lyft is preparing its IPO. The ridesharing giant, dwarfed only by its counterpart, Uber, is said to be eyeing a valuation between $20 and $30 billion. Uber, whose IPO will likely be happening later this year is said to be valued 4x higher, at approximately $120 billion.

As Lyft revealed its financials ahead of its upcoming IPO, it has become clear that no definitive path to achieving profitability has been carved out. Given this lack of a clear way forward, the performance of Lyft’s stock will effectively reflect the markets’ opinion of the ride-hailing market, and, by extension, of the future of mobility in general.

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CASH BLEEDING, BUT POTENTIALLY PROFITABLE?

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Both Lyft and Uber are money-losing businesses. Unsurprisingly, in the cash-burning era of Elon Musk, this is not considered a major drawback. But can Lyft leave the red and become profitable? According to Crunchbase, Lyft may be on its way to profitability. It has certainly grown over the past two years – Uber’s scandal-riddled 2018 and a huge marketing effort saw the ride-hailing company grow fivefold within two years. And although losses climbed to a net $911 million during 2018, Lyft’s overall growth meant that last years’s losses represented a much smaller percentage of its yearly revenue compared to previous years.

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Lyft Article

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https://www.ft.com/content/fdf2cf1e-39b6-11e9-b72b-2c7f526ca5d0

Source: Financial Times

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As Reuters (and Lyft’s recent filing) has revealed, Lyft experienced a staggering $911 million in losses for 2018. What may not be immediately visible, though, is that this figure is not as shockingly bad as it initially seems. Some further context is useful: Lyft’s losses for 2018 are equivalent to approximately 45 percent of its yearly revenues. It suffices to say that Lyft’s losses in 2017 and 2016 represented 70 percent ($688 million) and almost 200 percent ($682 million) of its yearly revenue respectively. Although the fact that the company is still burning through cash is not ideal, the shrinking of its losses as a percentage of its yearly revenue may be a sign that Lyft is becoming efficient enough to potentially turn a profit in the future.

Another metric that will be of interest to potential investors is that growth of the overall market. According to Goldman Sachs, the ride-hailing market is expected to grow from $36 billion today to approximately $300 billion by 2030, as its main competition, the taxi market, shrinks to a quarter of its size over the same timeframe. Apart from the erosion of the classic taxi-model, a trend against car ownership is further kindling the growth of ride-hailing. The question that will be on investors’ minds, though, is not necessarily associated with the market’s overall growth. Rather, investors should be asking whether Lyft’s current control over 30-40 percent of the U.S. ride-hailing market is sustainable, as ride-hailing is radically changed by the adoption of self-driving technologies.

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A MARKET THAT IS GROWING . . . AUTONOMOUSLY?

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A hurdle that Lyft has to overcome with regard to its potential growth is the rise of autonomous vehicles. Although not as close as people suggest, the rise of autonomy could have a detrimental effect on companies that do not promote a definitive plan towards achieving autonomy. In 2016, Lyft’s CEO, John Zimmer, claimed that most of the company’s rides would be autonomous by 2021, yet it does not seem like the friendly giant of ride-hailing is close to achieving such a feat.

Interestingly, the ride-hailing industry may be facing competition from forces that were previously unreckoned. Alphabet’s Waymo, for example, recently launched Waymo One, an autonomous ride-hailing service.

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https://www.forbes.com/sites/niallmccarthy/2019/02/22/apple-and-uber-are-trailing-in-autonomous-car-development-infographic/#61ec19b426ba

Source: Forbes.com

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Although the service is only available in Arizona at the moment, it will not be long before it is unleashed into the rest of the United States (or, the world). Furthermore, in spite of the use of a safety driver on every Waymo One ride, it is clear that Waymo is way ahead of its peers in the race towards truly driverless ride-hailing – it would not be surprising to see unmanned rides hauling passengers around within a year. Waymo has already secured a permit from California’s Department of Motor Vehicles to test unmanned vehicles, after all. With General Motors estimating the cost of drivers (for Lyft and other ride-hailing companies) at $3/mile, it is not hard to see how profitability for Lyft must be driver-free.

With autonomy dictating the pace of change (and, presumably, the level of investors’ faith in Lyft), Lyft has an uphill battle to fight. Admittedly, the direct competition is not doing much better: Uber’s Advanced Technologies Group, responsible for developing self-driving vehicles for the ride-hailing giant is not really a leader in its field: after a fatal car accident involving a pedestrian forced the company to suspend autonomous testing, Uber recently restarted its testing operations. Yet, its performance is considered abysmal compared to the frontrunners.

Lyft, whose in-house autonomous driving programme is keeping a low profile, has struck deals with various leaders of the field, such as Waymo and General Motors. In a bid to develop some in-house expertise, Lyft recently acquired Blue Vision, a London-based startup developing AR technology which is expected to help Lyft with its autonomous driving programme. But is this too little, too late? While partnering up to deliver driverless rides may seem like the logical next step for Lyft, given its seeming lack of in-house expertise, investors may ask one important question: will the deep-pocketed competition have any real incentive to partner up with Lyft or will Lyft have to rely on itself to deliver autonomous rides?

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IF NOT RIDE-HAILING, THEN WHAT?

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Lyft is a ride-hailing giant that commands 30-40 percent of the United States ride-hailing market. Interestingly though, its reach stops there.

The company recently acquired Motivate, becoming the largest bike-sharing provider in the United States. Although bike and scooter sharing is gaining traction in the United States, Motivate has not been a major revenue contributor for Lyft; at least, not yet. Accordingly, no specific breakdown of Motivate’s financial performance was provided, although the company reportedly made $100 million in revenue before its acquisition by Lyft. Indeed, as much steam as bike and scooter sharing schemes may be gathering, they are still part of a nascent industry that is fighting to become profitable (and often fails, as the downfall of companies like Ofo revealed).

Most importantly, what Lyft is lacking when juxtaposed with its main competitor, Uber, is a diversified portfolio. Even ignoring the need to embrace the transformational force of autonomous driving, the competition is doing more than Lyft. Indeed, while Uber is similarly active in the bike and scooter-sharing business (through Jump), it has also branched out to other lucrative businesses. Uber Eats’ booming popularity is a guarantee that Uber has more ways to grow than mere transportation; Uber Freight and Uber Elevate allow Uber to leverage its expertise in transportation further in order to remain relevant in the changing transportation landscape.

Finally, Lyft is also lacking geographically. While it commands nearly 40 percent of the North American market, it has not yet expanded to other jurisdictions. While focusing on a market that is close to becoming profitable may be considered a wise move, it also creates a dangerous situation for the ride-hailing company. The American market is almost always the go-to testing ground for companies that want to launch their new ventures. Indeed, if Waymo One is joined by other robotaxi services, one could see a future in which the first movers into the U.S. robotaxi market do to Lyft what Uber did to the taxi industry a few years ago. The danger of expanding into new geographical markets cannot be understated: Uber faced stiff competition abroad, having been sent packing in huge markets, such as Russia, China, and Germany. Then again, Uber has also reaped benefits from its international expansion: Argentina is reportedly Uber’s fastest growing market and India has been hailed as a source of “major growth”.

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A bet against change

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Lyft has filed its S-1, which means it could go public as soon as April. The transportation industry is changing: car ownership is past its peak; self-driving cars and shuttles are bound to change not only the way we move, but also the way we build cities; major cities are passing legislation encouraging greener means of transport, like bikes and scooters; and developing countries are embracing ride-hailing. Yet, in this rapidly changing market, Lyft’s IPO is a bet on things staying the same long enough for the ride-hailing company to capitalise on its U.S.-based business. Will investors give Lyft the cash it needs to further establish itself as the go-to ride-hailing solution and will the company pivot fast enough to proudly look the competition in the eye?

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Andrew Kyprianides is a Cyprus-born individual who completed his Law degree at King’s College London in 2015. After graduating from a Master’s in Public Policy at Harvard University in 2018, he decided to focus on a rapidly changing part of the commercial world: mobility. Through his website, themobility.club, Andrew explores the developments in all things directly or indirectly related to mobility – autonomous vehicles, first/last-mile transportation solutions, AI, Waymo, Cruise, Tesla, curb space data, patents, regulation, and city planning, among other things. 

themobility.club
themobility.club is a platform which allows readers to stay in touch with the latest mobility-related developments in various ways: the integrated Twitter feed provides instant updates on what is happening at the moment, the Daily articles provide an overview of what happened throughout the day, and the in-depth Spotlight articles allow a deeper understanding of the latest headlines. The weekly newsletter of themobility.club offers a quick way to stay in touch with the most important news of the week.

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Since the UK’s vote to leave the EU on 23 June 2016, the debate around the impact of Brexit on the financial services industry has largely centred around ‘passporting rights’. Financial institutions and banks, amongst others, are rightfully concerned as Brexit poses a threat to their current ability to sell financial services and products across Europe with minimal additional authorisations.

As the 29th March 2019 deadline looms, Brexit continues to cause market volatility and uncertainty. In light of this, I believe that it is important to examine how Brexit and the events leading up to it will affect debt financing transactions governed by English law.

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Estelle Kadjo
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Under English law, a contract can only be frustrated where performance is illegal, impossible or radically different to what was previously agreed by the parties. In other words, frustration typically happens when an unforeseen event or circumstance outside of the parties’ control occurs. In the context of debt financing transactions, it is unlikely that Brexit or any event leading up to it would constitute an unforeseen event or circumstance. It would be very difficult for contracting parties to claim that Brexit or any of the events leading up to it were unforeseen at the time of the transaction, particularly in respect of new transactions. However, in existing transactions with ‘unusual’ characteristics, parties may be able to rely on frustration if they can demonstrate that its requirements have been met, and Brexit has directly or indirectly frustrated the contract. Even in these ‘special’ cases, it is difficult to see how parties can successfully demonstrate that Brexit or any event leading up to it has frustrated their transaction. Therefore, what constitutes an ‘unusual’ characteristic becomes a question for the courts with the outcome decided on a case-by-case basis.

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In debt finance transactions, lenders can demand full repayment of an outstanding balance before its due date if an ‘event of default’ occurs or continues. Events of default typically include: non-payment, breaches of financial covenants, breaches of warranties, material adverse changes (MACs) and insolvency. Brexit is likely to trigger MACs for borrowers whose businesses, for example, rely on free movement of goods, capital or people. Since June 2016, it has been made clear by both Juncker and May that these freedoms will be affected. Therefore, in these scenarios debt finance lawyers acting for either borrowers or lenders will need to carefully draft and incorporate Brexit provisions into finance documents to protect their clients. Where it is clear that special Brexit provisions must be included in a debt finance document, lawyers need to ensure that an adequate definition is provided for Brexit, and its provision trigger is carefully constructed.

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There are currently no ‘standard’ Brexit provisions and I anticipate that the businesses which will be greatly affected will need provisions which cater to their specific commercial needs. Nevertheless, in the absence of an agreed political exit agreement, I believe that it is commercially unsound for parties to anticipate the form Brexit may take in debt finance documents. More importantly, it will be difficult for either contracting party to rely on a MAC it knows about when it enters into a debt finance transaction. MACs are generally very difficult for lenders to rely on, and given the significant number of debates surrounding Brexit and the long lead up to the event itself, it will be difficult for lenders and borrowers directly or indirectly affected by Brexit to feign ignorance and attempt to rely on it as a MAC.

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Brexit passporting rights

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Despite the political and economic uncertainty caused by Brexit, English law remains a viable choice for contracting parties. English contract law is largely unaffected by EU law, therefore the rights and obligations it confers upon contracting parties should remain the same. In other words, Brexit is unlikely to affect existing and new transactions governed by English law. Also, I doubt that there will be much need to change the current approach to governing law and jurisdiction clauses in debt finance documents as the UK’s exit from the EU will not erode the long-standing history, transparency and familiarity of the English common law system.

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Brexit and the events leading up to it are unlikely, in themselves, to directly impact new or existing debt financing transactions. However, Brexit and the events leading up to it have the potential to indirectly impact debt financing transactions, but these scenarios are likely to be ‘standalone’ with ‘unusual’ characteristics. In these ‘unusual’ circumstances, documents may need to be altered to incorporate carefully drafted Brexit provisions. However, legal advisers should proceed with caution, particularly in the absence of an agreed political exit arrangement between the UK and the EU.

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Estelle is a member of TCLA’s writing team. She graduated from the University of Bristol in 2016 with a Law degree. She now works as a Banking and Finance paralegal at Addleshaw Goddard LLP, while studying the Legal Practice Course (LPC) LLM part-time study programme at BPP Law School.

You can reach out to Estelle in our forums by clicking here.

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You may have heard the ‘gig economy’ being thrown around in recent articles and on the news but what does it mean? What do gigs have to do with the economy? Has there been an increase in concerts lately? Have One Direction finally gotten back together?*

Although you would be forgiven for assuming so, the gig economy actually has nothing to do with the musical type of gigs. The gig economy is defined as a labour market characterised by short term contracts or freelance work, as opposed to the traditional ‘permanent’ jobs. It gets its name from each job being an individual ‘gig’ – rather than receiving a regular salary for a long term job, workers get paid for one off jobs – aka ‘gigs’. Uber, Hermes and Deliveroo are key examples of gig economy companies.

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Sienna Hewavidana
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Proponents of the gig economy laud the flexibility and freedom it gives to workers whilst critics deride the lack of workplace protection, claiming it to take advantage of workers. There isn’t a clearcut answer as to whether the gig economy is good or bad, with both views having value. However, the rights of people in the gig economy have recently come under scrutiny by courts. Broadly speaking, disputes have centred on the difference between workers and self-employed contractors.

To go through the definitions:

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Worker

A worker generally has to carry out the work personally and is unable to send someone else in their place. They often have to wear a branded uniform.

Workers are entitled to some employment rights including:

  • the National Minimum Wage
  • holiday pay
  • protection against unlawful discrimination
  • the right to join a union
  • health and safety protection
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    Self Employed

    Self employed people are contracted to provide a service for a client. They are free to decide when, for whom and how they will do work.

    They don’t have the same employment rights as workers.

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    Gig economy companies tend to classify their operators as ‘independent contractors’. This is true in the sense that many can accept or reject work, whether through the ability to reject a passenger on Uber or take on 7 deliveries a night for Deliveroo. However, whether these ‘‘independent contractors’ are really all that independent is contentious. They are often subject to direct management and supervision about the work that they carry out.

    Here are some of the key cases involving the gig economy and employment:

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    Pimlico Plumbers

    Gary Smith worked for Pimlico Plumbers for six years until 2011 where his contract defined him as a ‘“self-employed operative”. As an operative, he was required to wear the company uniform, rented the branded van and had to work a minimum number of hours a week. However, Smith supplied his own equipment and could choose which jobs he took.

    In 2011, Smith had a heart attack and then claims that his request to go part time was denied by Pimlico Plumbers. The van he rented was taken away and he was dismissed. Pimlico Plumbers disputes that they denied his request, saying that they had asked for details of his medical condition but only received a sick note.

    This case was heard by many courts. First, in an employment tribunal, which ruled in Smith’s favour. Pimlico Plumbers appealed to the Employment Appeals Tribunal and were rejected. They didn’t stop there, and went to the Court of Appeal – which was, again, rejected. Not one to give up, in 2018, Pimlico Plumbers went all the way to the final court of appeal in England – the Supreme Court.

    The Supreme Court’s decision upheld the judgments from the lower courts, to clarify that Gary Smith was indeed a worker.

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    Uber

    Uber has long argued that, as a company, they act as an ‘intermediary’ between the driver and the user of the app – therefore the contract is technically between the driver and app user. However, in 2016 two Uber drivers, James Farrar and Yaseen Aslam, took Uber to court, arguing that they were employed by Uber rather than working for themselves. The tribunal ruled that the two drivers were indeed ‘workers’ during the time they had worked for Uber. Indeed the tribunal stated that the the terms of the contract between Uber and the drivers “did not correspond with the reality” of the relationship.

    Not taking a no for an answer (am I sensing a theme among these companies?) Uber appealed to EAT and were quickly dismissed.

    Did they stop there? What do you think? Not on your life. Uber took the case to the Court of Appeal in 2018 who, again, upheld the previous decision.

    Uber says it will appeal the decision in the Supreme Court so – who knows? Anything can happen. Well. Probably not. But we can let Uber dream.

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    Deliveroo

    You’ll be thankful to hear that the story of Deliveroo has a slightly different ending.

    In 2017, The Independent Workers of Great Britain (IWGB) union attempted to have Deliveroo drivers in Camden and Kentish Town recognised as workers. Remember, this is a hugely important step as it grants drivers those all important rights of minimum wage and sick pay – and significantly, the right to unionise. The union wanted to represent riders to order to negotiate issues of hours, pay and holiday with Deliveroo.

    However, the Central Arbitration Committee declared that since drivers have the ability to allow other riders to take their place on a delivery (to ‘substitute’) they could not be defined as workers. As mentioned before, the inability to send someone else to do your work instead of you is a key criteria of being a worker. Critics claim that Deliveroo used this differentiator as a ‘get out of jail free card’ as it changed its contract to include the substitution clause just 11 days before the CAC hearing.

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    Introduction

    [divider height=”30″ style=”default” line=”default” themecolor=”1″]Despite Deliveroo’s case, from looking at these companies, it is clear that there is a strong judicial line of cases in which gig economy operatives have been found to be workers. With the gig economy growing, it is apparent that we will soon need greater legal protections for individuals working in the gig economy, whether in the form of amending legislation or developing new law.

    **

    *The answer is still no. It’s 3 years into the hiatus and I’m still waiting boys.

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    Introduction

    Sienna is a member of TCLA’s writing team. She is a graduate of Politics and Sociology from the University of Cambridge.
    Sienna is interested in race issues, such as the issue of diversity and underrepresentation within corporate circles. She hopes to educate both herself and others on the topics.

    You can reach out to Sienna in our forums by clicking here.

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Saudi Arabia – a G20 country which sets the record for having the biggest oil reserves in the world – is increasingly being defined as one of the hottest emerging markets of the moment. What’s behind the Kingdom’s recent popularity are the numerous reforms (both social and economic) that the Saudis aim at introducing in the next decade. Their main objective is to diversify their oil-dependent economy and make it more ‘foreign investor friendly’.

Whilst entering the OPEC’s leading country might rightfully be appealing to you, reader, Saudi Arabia remains a conservative totalitarian kingdom, which lacks transparency and, when needed, gets rid of political opponents or human rights activists. Reforms must, in this case, be contextualised.

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Camilla

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Camilla Gionso
TCLA Writer

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Introduction

Brief overview of its politics

Although claimed to be complex, Saudi Arabia political life is quite straightforward. The Kingdom of Saudi Arabia (for simplicity, “KSA”) is an absolute monarchy ruled by the Al Saud family. There is almost no participation in political life, mainly because there are no elections of national bodies. Some formal political apparatuses do exist, but the decisions that matter are always taken within the royal family and senior princes. Political parties are also outlawed. The country doesn’t have a legally binding written constitution, as the main law remains Islamic law (called Shari’a). In the end, the king embodies legislative, executive and judiciary functions. There is little to no space for political opposition, and the kingdom remains very conservative.

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Introduction

Oil: n1 economic driving force

Saudi Arabia’s economy is the largest in the gulf region, and also the only one in the region to be part of the G20 group.

It is oil that drives the economy and brings richness in the kingdom. This is because of its impressive (and also worldwide largest) oil reserves: they account for 19.1% of total global reserves (!). Petroleum accounts for approximately 87% of budget revenues, 42% of the country’s GDP, and 90% of export earnings revenue. This makes Saudi Arabia the most influential country of the OPEC.

Parenthesis on OPEC: Organization of the Petroleum Exporting Countries, founded by Saudi Arabia, Iraq, Iran, Kuwait and Venezuela. It added with time, UAE, Libya, Nigeria and Qatar. Members of OPEC make up a cartel, which has the purpose of coordinating the politics relating to production and export of oil. It is quite a powerful organization as these countries (which control over 40% of the world’s oil supply and 80% of oil reserves) can decide how much oil to export in the market, and therefore greatly influence its price.

It was indeed the discovery of oil that changed the economic situation of KSA. In 1933, when oil in the country still wasn’t discovered, Saudi Arabia granted the ‘Standard Oil Company of California’ a concession in its territory. This meant, in substance, that the American company had permission to search for oil in the Saudi territory. The same year the oil company founded the ‘Arabian American Oil Company’, (Aramco in short). They found the first oilfield in 1938.

During the 1970s and 80s control of Aramco gradually passed to the Saudi Arabian government, which eventually took over it and renamed it ‘Saudi Aramco’ in 1988. The company has today the second-largest crude oil reserves globally and is regarded as the most profitable company in the world (it was recently valued by Bloomberg $2 trillion).

Nowadays still, all Saudi oil production is controlled by state-owned Saudi Aramco (this is different in Russia or in the US for instance, where numerous companies produce and sell oil and act in their own self-interest).

Saudi Arabia’s share of oil production (almost 20%) confers the kingdom an impressive economic power, and therefore makes KSA a very influential player in the financial markets.

This is because of how oil prices work. Oil prices change daily because they are controlled by traders who bid on oil futures contracts. To make this very simple, oil future contracts are agreements to buy or sell oil at a specific date in the future for an agreed price. When deciding the price, traders, amongst other factors, look at oil demand and supply. Saudi Arabia, by withholding three or four million barrels a day of oil from the market, is in the position to drastically influence supply and therefore prices. This is what happened in 1973, when the OPEC countries stopped exporting oil to the US. In just four months, prices quadrupled. Because oil is such a high-demand economic supply, fluctuations in its price definitely have an impact on the global economy more generally.

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Introduction

The problem with oil

While petroleum exports definitely represent a big revenue for the country, many see Saudi Arabia’s dependence on it as problematic.

Problem number one is that the Saudi economy is left vulnerable to shifts in the price of oil, lowered demand, or to the disruption of demand caused by regional conflicts and the Organization of Petroleum Exporting Countries (OPEC) shifting oil production quotas. Saudi Arabia’s economy had grown very steadily due to high oil prices and output, which resulted in fiscal surpluses and very low levels of sovereign debt. However, after prices reached a peak in 2014, they have been on a roller coaster ride. They have experienced a 20% drop just last November. For an economy which almost solely relies on oil, continuous fluctuations are far from positive.

Furthermore, some also point at a longer-term problem. Oil, as most nice things, will not last forever. At the current rate of production, and without the discovery of other oilfields, petroleum in the country will last for 87 years. And even if more oilfields become available as it is currently argued, diversification of its economy calls as an urgent matter.

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Introduction

“Saudi Vision 2030”: time for a change?

To go back to my initial point, Saudis are in the process of making their economy more successful by diversifying and reforming it. Here are some reasons why Saudi Arabia could become an interesting option for investment.

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Saudi Arabia Vision 2030

Introduction

Saudi Arabia’s potential game changer is Crown Prince Mohammad bin Salman (nicknamed MBS), the de facto ruler of the country (his father the king is in fact suffering from Alzheimer’s and his 33-year-old son is now fully in charge since 2015). He was the one to initiate, in 2016, the ‘Saudi Vision 2030’ project. As you may have guessed, this consists of a number of economic reforms aimed at eliminating Saudi Arabia’s ‘addiction to oil and gas’, as well as completely transforming the country’s economy to make it more foreign investment friendly. It also plans to go ahead with some social reforms to boost the Saudi population’s employment and cultural development (women included).

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Introduction

The plan is considered a bit broad and too corpulent to be implemented in just ten years from now. It however places pivotal importance on economic reforms and initiatives.

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Introduction

I. Economic reforms

The diversification plan includes reducing the role of the public sector as driving force of the economy whilst empowering the private sector, which they want to become the new vehicle for economic growth (the so-called ‘privatisation’ plan). It also plans to grow private and foreign investment in key industries such as petrochemicals, biotechnology, automobile assembly, sectors that weren’t open to foreign investment before.

MBS has repeatedly argued that foreign investment is of crucial importance for reform in the country. In fact, when the prince decided that his plan of reforms was going to take place, foreign direct investment in Saudi Arabia was less than 1%. This is very low compared to other emerging markets. He has been on several world tours promoting business opportunities Saudi Arabia can offer the world, mentioning technology and entertainment as new opportunities.

The recent reforms to the Saudi stock market (the Tadawul) have led indexing firms to include Saudi Arabia into the mainstream of emerging markets universe. These reforms include measures to open it to foreign investors, such as new clearing and settlement processes, and rules that allow short selling and securities lending. FTSE Russell announced that the Saudi Stock Exchange will be part of the emerging markets index next March. Investors particularly like stability as well as political reforms, and MBS has been quite successful at spreading hope for a renewed economy and – at least on paper – a progressive country.

Once it is included, the Saudi bourse will be the largest bourse in the Middle East, accounting for around 2.7% of the index. This will definitely increase the possibility of foreign investment in the country, as it would be now possible for institutional investors as well as funds (pension, hedge funds etc.) to buy Tadawul’s stocks. Many investors are also drawn to invest in emerging markets as their growth potential is usually higher and continually evolving.

Some foreign friendly reforms have also been introduced when it comes to establishing a business in the country. At the moment, foreigners are required to both work in a joint venture with a Saudi firm and to obtain a licence from the State. However, since Vision 2030 was implemented, firms or businesses whose work is seen to help in any way the primary objectives of Saudi 2030 plan (diversification of KSA’s economy, development of KSA’s human resources, reinforcement of economic development etc.) are granted special privileges and incentives to work in the territory.

As Saudis foresee ‘Vision 2030’ to be quite expensive, the plan calls for the creation of a big sovereign wealth fund to be funded by an IPO of 5% of Saudi Aramco. It was this decision that caught particular worldwide attention. It was going to be the biggest IPO in history (it was supposed to raise $100 billion with just that 5%, meaning that the entire company is worth $2 trillion or more). Many of the biggest financial centres were battling to have in in their own stock market. The IPO was however delayed multiple times, and its date still remains clouded with uncertainty.

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II. Shari’a and business

Reforms are also revisiting the legal landscape too, particularly touching the laws concerning the business world. Again, this is aimed at rendering the country more accessible and transparent to foreigners.

Saudi Arabia’s legal system is based on the Shari’a (Islamic law derived from the Qu’ran and traditions of the Islamic prophet Muhammad). The business world is therefore also regulated by the Shari’a. In short, this legislation consists of a number of Islamic principles which stress the idea of fairness, with little to no space for legal precedent. This has always been a great concern for foreign investors, as many (if not all) foreign firms come from a common law system where legal precedent is fundamental. Moreover, jurisdiction is also said to be unpredictable, as judges interpret the Shari’a according to medieval texts on Islamic jurisprudence.

Some reforms have been introduced in the field, even though they don’t change the religious basis of the system. These include a new bankruptcy law, which will see a commission speeding up the processes and making it smoother. Other reforms also aim at making Saudi courts closer to the legal system abroad. Whilst in the past Saudi judges rarely enforced judgements of foreign courts, last year courts received application to enforce 163 applications to enforce foreign judgements. Finally, with the goal of eliminating the unpredictability of some court hearings, authorities have started to enforce a law that gives judges less room to use their discretion.

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III. Saudi population

Finally, MBS has put focus on the Saudi population too. The first key decision is the will to increase the employment of Saudi nationals in private sectors (known as Saudization). KSA has in fact a very young population, with over half of it being under the age of 35. This young population is the target of education reforms. Our Crown Prince wants to see Saudi universities develop into the top ones worldwide, so that young clever Saudis are not forced to abandon the country to study abroad.

Some social reforms are also on the way, especially targeted at women, who were finally allowed to drive last June. MBS has also reopened cinemas, allowed mixed audiences at concerts and in sports stadiums.

MBS’s media coverage has been, until recently, quite positive. Other heads of state have welcomed his plan of reform and economic diversification. For instance, China’s chief Xi Jinping particularly supported the Saudi plan, and during the G20 in Buenos Aires he discussed a partnership between the two countries and harmonizing the Vision 2030 with China’s BRI initiative.

On paper, Saudi Arabia has all the cards to do good and presents many opportunities for a successful foreign investment.

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Introduction

All that glitters is not gold

Despite the positive media coverage and the reformer appearance, many events suggest that crown prince MBS is not so much a reformer after all, and that the numerous reforms are just a nice façade to cover Saudi’s fragile economy and tyrannical politics.

The first aspect that may raise many concerns to the eye of the western investor lies in Saudi Arabian politics. One may argue that the space for political opposition, and for free speech more generally, is not much.

After having announced the greatest reforming plan KSA has ever experienced, MBS has also ordered what is probably the biggest ‘purge’ of the kingdom. As he felt that his country was flooded with corruption, he has ordered November last year the arrest and confinement of some of the richest men in the country said to be corrupt. They were interrogated in an hotel in the capital and, some sources say, abused or tortured before being released or incarcerated. MBS may or may not have done this in the name of corruption, but it is a thing that through this purge he has been able to get rid of high functionaries that didn’t please him and appoint 26 new judges which he probably liked more. Many are suggesting that this has been very useful to strengthen its power.

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Introduction

More recently, the positive public image that MBS was able to build began to seriously crack after the assassination of the journalist Jamal Khashoggi. After being close to the Saudi royal family for years, the Washington Post columnist had recently fell out of favour and went on a self-imposed exile in the US. He was particularly critical of the newly elected Crown Prince, who he did not see as a reformer at all. He has been brutally killed last October in the Saudi consulate in Istanbul, whilst getting some documents to get remarried.

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Khashoggi

Introduction

Whilst initially denying any knowledge or connection with Khashoggi’s fate, a month later the Saudi public prosecutor claimed that the journalist was given a lethal injection inside the consulate. Eleven people have so far been charged over the journalist death. The possibility of a connection between the reformer crown prince and the murder shed a lot of negative light on the Kingdom.

And this is not an isolated matter. There were many cases, in the past few years, which saw the arrest of human rights activists or political opponents.

Investors were prompt to dump Saudi Arabia stocks, as they were not willing to enter a country involved in what became an international crisis. The stock market is however a pillar in the Crown Prince’s plan to revamp his country’s economy, and he is probably not willing to see some foreign-relation predicaments ruin his economy. An article from the Wall Street Journal published an insight claiming how MBS had been ready to counter the sell-offs his country was experiencing, all to keep a polished image of his stock markets. They observed how the Saudi stock exchange normally discloses the stock bought by the government. Yet, recent purchases were concealed by public view after the recent crises. It was argued that this is because the Saudi government was routing its money through asset managers at Saudi financial institutions, rather than buying stock directly. These institutions don’t need to reveal their clients. Hence, to an external eye the Saudi stock exchange might look as healthy as ever, whilst in reality, it is only the government that pushes it forward.

Finally, there is also the element of transparency, and the question of whether Saudi Arabia is as prominent as it claims.

Saudi Aramco’s IPO can be taken as an example. Described as the richest IPO financial markets had ever seen, it still hasn’t taken place and has been delayed multiple times. This is raising some doubts if it will take place at all, especially because MBS had placed it at the forefront of his ‘Vision 2030’.

Firstly, there are some concerns on whether the forecast of raising $100 billion from publicly listing just 5% of the company is actually credible. This means that the entire business is worth at around $2 trillion. Many investors argue that it is an overambitious plan.

There is also the question of whether Saudis may have changed their mind. Listing Saudi Aramco on an international stock exchange (London, New York and Hong Kong were willing to have it) means that Riyadh needs to be as transparent as ever (an IPO in fact requires the company to show all his balances and cash flows). The Saudi State and Saudi Aramco’s balances are quite intertwined, so listing the oil company might mean that the state needs to be transparent about its balances too.

In substance, Saudi Arabia reforms are all there and might be working too. However, to make the country truly appealing to the foreign investor, KSA should start from a reform of its political life. More reassured investors would follow.

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Introduction

Camilla is a member of TCLA’s writing team. She is a third year social and political studies student at UCL. She is currently on her year abroad in Germany.

You can reach out to Camilla in our forums by clicking here.

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