The European Commission has decided to pursue an investigation to assess whether BMW, Daimler and the VW Group (comprising Volkswagen, Audi, and Porsche) colluded to avoid competition on the development of cleaner emissions technology.

The foundation stone of the EU antitrust rules is Article 101 of the Treaty on the Functioning of the European Union – the article plainly prohibits “all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market”.

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WHAT HAPPENED?

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The first inspections were carried out almost a year ago, on October 23, 2017 – the Commission has confirmed that those raids on the premises of German manufacturers were in relation to the cleaner emissions collusion scandal that has just surfaced.

According to the press statement from the European Commission, there are suspicions that the five automakers agreed to avoid competition on the development and roll-out of technology to clean the emissions of petrol and diesel passenger cars. The technology examined includes selective catalytic reduction (“SCR”) systems to reduce harmful nitrogen oxides emissions from passenger cars with diesel engines; and “Otto” particulate filters (“OPF”) to reduce harmful particulate matter emissions from passenger cars with petrol engines.

As the manufacturers’ respective websites and other sources reveal, these technologies have only recently been introduced, and their introduction is normally limited to the high-end of the carmakers’ fleet. BMW, for example, made the SCR catalytic converter (part of its BluePerformance Technology package) a standard feature of all BMW diesel models in March 2018 – it was reportedly a £995 option on some diesel passenger cars before then. Mercedes-Benz used the Otto Particulate Filters in its S500 (a premium vehicle costing nearly £100,000) and has promised to introduce the technology to other models from 2018. Although unsurprising in hindsight, Volkswagen also introduced the same technology to its petrol vehicles last May, 2018.

Although the details of the potential collusion have not been disclosed by the Commission, the press statement mentions that the five automakers “may have violated EU antitrust rules that prohibit cartels and restrictive business practices, including agreements to limit or control technical development”. The almost concurrent rolling out of the cleaner emissions technology by the manufacturers in question could, for example, have been a product of collusion aimed at delaying the development and/or introduction of the cleaner emissions technologies, although this is merely a guess, amid the lack of further information.

Although this -potential- wrongdoing comes in the wake of the Dieselgate scandal, the Commission took extra care to clarify that “at this stage, there is no indication that the parties coordinated with each other in relation to the use of illegal defeat devices to cheat regulatory testing”.

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WAS IT ALL ILLEGAL?

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No. As the Commission clarifies, there were other topics discussed during these “Circle of Five” meetings. Among other issues, the automakers discussed things like the speed at which their respective cruise control systems should operate, the speed at which convertible cars’ roofs open and close, and potential cooperation in improving testing procedures for car safety (the European Crash test, known as the EURO NCAP.

These discussions could have also constituted anti-competitive behaviour, although the Commission is not investigating that behaviour at the moment. Anti-competitive behaviour could be found if, for example, the automakers agreed to improve their cruise control systems and pass the costs for this improvement to the buyers, by agreeing on the pricing of their advanced cruise control systems (thus depriving the consumer of their right to a competitive market).

It should be noted that according to the European anti-trust rules, competing parties are allowed to discuss and/or cooperate to improve the quality of their products. What is not acceptable, though, is the collusion to stifle technical development and/or rolling out of improved technology.

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WHAT COULD HAPPEN?

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European competition

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Since taking over in 2014, Margrethe Vestager, the European Commissioner for Competition, has not held back when it comes to investigating possible collusion between competitors. Most notably, she has spearheaded the investigation efforts that led to nearly $4 billion of fines imposed on truck makers (Volvo/Renault, MAN, Daimler, Iveco, DAF, and Scania) after the notorious, 14-year long cartel they participated in was uncovered.

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The Commission is armed with a powerful weapon: the fine imposed for each infringement, if collusion is proven, could amount to up to 10 percent of each company’s annual turnover. Mercedes Benz, for example, could be fined up to €16.43 billion, representing a 10 percent cut of their 2017 turnover of €164.3 billion. Just for perspective, the net profit of the Daimler group for 2017 was €10.9 billion – which means the Commission could impose a fine that is higher than the group’s annual profit. Although this may sound like a “ceiling” fine, which is rarely imposed, the European Commission has taken a hard stance against wrongdoers: SCANIA, the Swedish truck maker that was found guilty of participating in the truck cartel, refused to settle, thus losing any access to the leniency programme and/or the “settlement” discount of 10 percent. In 2017, it was fined €880 million, representing approximately 8% of global turnover for the year – indicatively, the net profit of SCANIA for 2017 was approximately €850 million.

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WHAT SHOULD HAPPEN?

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Last May, 2018, the Commission referred France, Germany, and the United Kingdom to the Court of Justice of the EU for failure to respect limit values for nitrogen dioxide (NO2). If the collusion is proven, it will become clear that a large percentage of European buyers of passenger cars were, in one way or another, deprived of their right to cleaner emissions technology – one of the devices included in the purported cartel is SCR, a system that can massively reduce emissions of nitrogen dioxide.

The five investigated automakers command approximately 40% of the European car market – it is evident that their contribution to the passenger car-related pollution is similarly high. If the investigation leads to the imposition of fines, it will be reassuring to see the proceeds used to further encourage the uptake of zero emissions cars. Admittedly, the European Union does not earmark the proceeds from fines for particular purposes: as carmakers selling cars in Europe will have to conform to much stricter CO2 emissions standards from 2020 though, the creation of an additional pool of money to fund new EV infrastructure and zero-emission vehicle purchase incentives could be facilitated through the collection of large amounts of money as fines.

It remains to be seen whether collusion will be proved and to what extent the manufacturers will fall victims to the wrath of the antitrust authorities of the European Union.

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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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If you’re anything like me and have been desperately trawling through law firm brochures in a
hopeless attempt to differentiate between them (spoiler alert: they’re basically all the same),
then you’ve certainly come across these three little words. Branded across pages in fancy
calligraphy, all law firms now seem to have a section dedicated to boasting just how ‘diverse’
and ‘inclusive’ they are.

But what does this mean exactly? Are they just phrases to tick off HR’s checklist? And more
importantly – what exactly is diversity and inclusion? Is it for women? Are men at a
disadvantage? Is it for people of colour? Do these policies discriminate against white people?
All of these are very valid questions – diversity and inclusion is shrouded in mystery and often
people are too scared to ask what they really mean in fear of being branded as ignorant. No
fear! Here is a handy guide for all you need to know so you don’t have to be that person at the
law fair awkwardly umming and ahhing at the HR person.

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What is diversity and inclusion (D&I)?

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Introduction

Having D&I policies essentially means that law firms have publicly committed to promote and
improve opportunities for people in the legal profession regardless of their background. This
mostly translates as aiming to recruit and retain those who are not represented in the law
profession (such as people of colour, LGBT+ people and disabled people). However, there are
numerous ways in which diversity and inclusion can be incorporated within a firm: such as
through inclusion networks, the publishing of a diversity profile and publishing annual reports to
monitor success.

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Who does it apply to?
(D&I)?

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D&I policies apply to those who are not typically represented in the legal profession. Have a
look at the partners (or even associates) in any law firm and take three guesses as to what they
look like. Yep, that’s right: almost certainly male, white and straight. Law has traditionally been
an old boy’s club – particularly for barristers – and it’s no surprise that women, ethnic minorities,
LGBT+ people and those from lower socio-economic backgrounds can hardly get a foot in the
door. It’s a valid question to ask why this is though, and although there isn’t one singular
answer, the idea of structural barriers can help us understand why.

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What are these structural barriers?

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Research has found that masculine working patterns (having to work until the early morning isn’t
ideal for parents – especially mothers) and bias against ethnic minorities are two of the biggest
structural impediments that face lawyers. Gender bias means that female solicitors still experience an income gap, are less likely to make partnership and exit the profession earlier
than their male counterparts. For BAME lawyers, a real problem has been the ‘cultural values’
that law firms promote. To put this in simpler terms – law firms often recruit on the basis of a
‘high value’, ‘elite’ image which their solicitors are supposed to embody. Entering the hallowed
ground of elite law firms (read: magic circle) is contingent on mastering these cultural values
which often discriminate against BAME and lower socio-economic groups. For instance, for
many South Asian women, a high flying career as a lawyer can often deem you as less worthy
of marriage because it is not ‘family friendly’ – a real issue which is often disregarded by law
firms.

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Isn’t this just reverse racism/sexism?

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No.
No, no no. D&I policies exist to aid those who are in need. Although there has been dramatic
progress in terms of admission of women and people of colour, they still lag behind significantly
in terms of career progress. D&I policies don’t just recruit people on the basis of their skin colour
or gender – you still need to be a teamworker/leader/full of
tenacity/independent/charismatic/[insert one of the million other qualities that law firms ask for].
No one is being hired just because they are a woman or an ethnic minority. I wish! It would save
me hours of applications.

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Do D&I policies actually work?

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Ah. The million dollar question. One of the most important things to realise about D&I policies is
that they are not meant to be a short term solution – the point is to reap their benefits in 10, 20
years time. D&I aims to recruit and support those who are currently non-represented until they
can be fully represented in the future. Bookmark this article and check back in 20 years time to
see how diverse the partners are in a firm. Only time can tell.

However, D&I policies should not be treated as a perfect solution to all a firm’s problems. Often,
sadly, they are used as buzzwords – hoping to earn brownie points, firms emblazon their
brochures and presentations with these two words in a ‘Look At Us! We’re So Goddamn
Progressive!
’ manner whilst actually doing nothing of value. Without naming any names, last
year at my university’s law careers fair, I asked a trainee solicitor what their D&I policy was. He
gave me a bit of a disgruntled look (it was fairly obvious he didn’t really want to be at the fair
talking to all these – god forbid – chatty uni students) and was silent for a few moments before
casually replying:

“Well, I couldn’t tell you specifically what our policies are but whenever I look around the office,
not everyone is white…so….yeah”.

Reader, when I tell you I nearly gave up my hopes of being a lawyer there and resigned myself
to a job in Consultancy, I would not be exaggerating (well okay, perhaps not Consultancy. I stilldon’t fully know what they do). Hearing statements like this is more than discouraging – it’s a
kick in the face.

For D&I policies to work, it’s not enough to just recruit under-represented people – they need to
be integrated into the firm and supported in their career: if you don’t offer flexible working time,
disabled access, understand different cultural norms and how they impact people, then you risk
losing some fantastic talent. For years and years, law firms have only hired what they have
known – D&I offers an opportunity to move past tradition and give a lifeline to some of the future
greats of the industry

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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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With tech companies preaching the advantages of artificial intelligence, cloud technology and machine learning, the term ‘blockchain’ has also been bandied around in a bid to enhance productivity.

Blockchain has been considered “one of the most disruptive innovations since the advent of the Internet” with global business benefits estimated at US$21 billion by 2021.

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Kaveesha Thayalan
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Yet – what exactly is it?

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Blockchain explained

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To put it simply, blockchain is a chain of digital blocks which contain data. When data is recorded, a ‘hash’ is created; this identifies the unique contents of the block akin to a fingerprint. When a new block is added to the chain, it contains its own hash and the hash of the previous block to ensure a connected chain. The record of data is shared across all nodes (participants) and is not centrally stored in any single location. Across various industries, the use of blockchain technology to record data is gaining prominence primarily due to its security, efficiency, and potential cost savings.

Trust and security

Information on a blockchain is immutable and secure due to its hash function. A change of one block’s contents would change its hash and disrupt the subsequent blocks which still contain the previous hash. For the change to be accepted, the hash of all subsequent blocks would need to be recalculated.

The distribution of the record of information amongst all its nodes (participants) furthers immutability. Compared to a traditional ledger system, no node enjoys special rights to make a unilateral change to the record. Any changes to the chain will require a consensus from other participants that the change is valid so that that it is recognised in the ledger. This characteristic hinders a centralised hacking attack as corruption of data requires a simultaneous change to all the blocks in the chain.

This self-auditing process increases trust in the system due to the transparency, verifiability, and immutability of data which overcomes issues of hackability and manipulation that persist in traditional digital systems.

Efficiency

The use of blockchain is also considered more efficient due to the accuracy and speed at which information can be input and transmitted which arises from a decentralised authority. A decentralised authority results from the consensus-based system of storing information. Without a central authority to verify information or complete transactions, risks and error-rates can be minimised. This increases the speed which decisions can be made, and information authenticated. By eliminating third-party intermediaries, verification and transfer of data can be completed more efficiently. To capitalise on this, Maersk and IBM created TradeLens Blockchain Shipping solution which moved its global supply chain on to a blockchain network and increased the efficiency of moving goods across the 234 participating marine gateways.

Cost savings

The increase in efficiency creates cost-savings for implementers as it reduces the cost of connections and transactions. Compared to a traditional recording system, it requires minimal overhead costs with fewer intermediaries to manage as the transfer and verification of data is completely automated. As a result, companies can avoid paying staff to input and verify data. In the investment market, it is estimated that the switch to using blockchain from a laborious paper system could save asset managers US$2.7bn.

Application

The use of blockchain is currently trialled across various sectors, from energy to agricultural industries. Looking to the legal market, firms are experimenting with blockchain to maximise its benefits. In an industry which is centred around identifying and mitigating significant risks, trust is paramount between firm and client. Blockchain has the power to strengthen firms’ relationships with clients due to the transparency and accuracy of data collection and use. The application of blockchain could also minimise the need for simple administrative tasks such as data gathering and verification, thereby reducing overhead costs and financial outgoings while improving cash conversion.

Firms are independently implementing blockchain technology within their operations. For instance, K&L Gates has invested in Chainvine to decentralise the company’s data system in order to create a secure and permanent blockchain ledger system. Chainvine also aims to create ‘intelligent commodities’ to enable more efficient recording of asset data. Several other firms including Herbert Smith Freehills, Freshfields, Kennedys, Fieldfisher and Hogan Lovells are also dedicating resources to exploring the potential applications of blockchain within their firms.

Firms are also working together to establish a common blockchain system within the legal services market. In February, ten law firms joined R3’s legal blockchain research community, ‘Legal Centre of Excellence’ (LCoE); Ashurst, Baker McKenzie, Clifford Chance, Crowell & Moring, Fasken, Holland & Knight, Perkins Coie, Shearman & Sterling, Stroock, and White & Case. The collective participation of law firms is paramount to ensuring the widespread adoption of the technology.

Smart contracts

A key application of blockchain in this market is through smart contracts. Smart contracts are essentially contracts that are drafted through code. These automatically trigger an action once an event has been marked as completed. This can be illustrated simply with a property sale agreement; once conditional events are fulfilled (e.g. the payment is made), the smart contract will automatically trigger the transfer of property to the buyer on the property register. In this ‘living contract’, once a conditional event is identified, trusted data sources called Oracles track the progress of the real-life event and enable the performance of the contract. Oracles are supplied by third parties and can constitute a multitude of official and trusted sources.

Smart contracts benefit from certainty that is entirely self-contained in the code. Contracts are made more efficient with the speed at which an exchange of value is enabled due to trustless execution. There is no need for an external authority to authorise a subsequent action after the fulfilment of the event as it is completed automatically. The security embedded in a blockchain transactions also reduces fraud and improves data accuracy.

One of the most prominent developers of smart contracts is Ethereum. Assets can be traded on the Ethereum platform with the use of Ether or other cryptocurrencies built on Ethereum. Using the Solidity code, individuals can self-serve by coding their own contracts on the platform. Specifically, in the legal market, R3’s Corda is another platform on which smart contracts could be built. Chainvine’s development of ‘intelligent commodities’ would also advance the development of a smart contract platform to enable efficient transactions of assets.

Considerations

However, amongst all the praise, it is important to consider potential risks of present smart contract applications.

First, smart contracts are difficult to code correctly. Due to its immutable nature; once written, the contract is irreversible. If the data input is inaccurate, this would create a cascading effect across the performance of the contract. Smart contracts might not be suitable for complex transactions due to the various uncertainties of contractual terms in a complex agreement which make coding difficult. Contracts would need to be drafted unambiguously and without any room for interpretation to ensure the parties’ intentions are accurately fulfilled. Traditional ambiguous terms such as “reasonable efforts” would need to be expressly defined as codes cannot interpret language. The LCoE recognises this problem and is currently working towards linking data to associated legal prose to ensure code is rooted in law. However, until this is established, smart contracts are limited to simple transactions.

Second, the legal nature of smart contracts is disputable. In common law systems, establishing a contract requires offer and acceptance, intention to create legal relations, considerations, and certainty. Without human intervention in smart contracts, parties’ intentions to create legal relations are uncertain as coded performance is automatic. This would be a significant issue with “follow on” contracts if performance of a previous contract automatically creates a subsequent contract without the awareness of parties. Ideas of consent and agreement through signing would need to be redefined to give legal status to smart contracts. Additionally, special attention needs to be given to contracts established in markets with strict regulations. For instance, financial regulations would need to be coded into the required contracts in order to achieve legal compliance and operational continuity. Presently, the legal nature of smart contracts is uncertain and greater legislative guidance is required to ensure blockchain commands translate into legal obligations.

Third, smart contracts might create data privacy issues. A strong selling point of smart contracts is its immutable security. However, this is at odds with current General Data Protection Regulations which implemented a right to be forgotten and data migration. The permanent record of sensitive personal data would be problematic, especially since transactions are largely transparent. To minimise privacy disruptions, the blockchain would need to be altered to limit visibility of transactions only to “trusted” nodes. Total removal of data would be difficult on a blockchain and technology-based solutions need to be developed to bring smart contracts in line with data regulations.

Fourth, a smart contract’s inherent security is undermined if there is a bug in the code. In 2016, the Decentralised Autonomous Organisation (DAO) hacking attack resulted in the loss of 15% of all Ether in circulation at that time (3.6 million Ether). To prevent more funds from being lost, a “soft-fork” proposal was put forward which essentially froze assets and prevented Ether from moving out of the DAO. In this case, the fork approach was a one-time fix to this particular vulnerability. To improve security in smart contracts, several tech companies are developing security infrastructure to prevent similar DAO incidences. For instance, Quantstamp is developing a security-auditing protocol which enables peer-submitted verification software and “Bug Finders”. However, this labour intensive idea undermines the speed and efficiencies of blockchain. With any code, it can be argued that bugs are inevitable due to human error. Until scalable security can be guaranteed, smart contracts could create unnecessary risk and liability issues for firms.

Future

Regardless of the aforementioned considerations, the blockchain craze within the legal industry does not seem to be slowing down. In fact, firms are increasingly exploring the application of blockchain so as not to lose innovation points in a highly competitive environment. While smart contracts have the power to cut lawyers out of the picture, firms could remain relevant by evolving their services.

Smart contracts cannot be drafted without the legal knowledge which underpin legal compliance. Regulations would need to be considered to ensure coded contracts can be performed. Legal drafting would still be required before contracts can be made into code. Lawyers would also need to identify and carve out clauses of a contract which require greater flexibility and human interpretation, such as force majeure events. As a result, the legal profession might move towards a more advisory role, focussing on value-added services which require creativity and innovative thinking. Moreover, establishing strong client relationships cannot be automated and lawyers will remain paramount in managing clients and their individual requests.

Conclusion

Blockchain could very well be the long-awaited disruption to the largely stagnant legal industry. It is argued that the use of blockchain could consolidate legal services and erode firms’ margins as services could be delivered at a fifth of current costs. In line with Richard Susskind’s predictions, the commodification of legal services could be executed through disruptive blockchain applications such as Dapps which facilitate commercial smart contracts without the need for law firms. In a “more-for-less” future, ignoring blockchain is likely to be corporate suicide and law firms should innovate or risk irrelevance.

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Kaveesha is a member of TCLA’s writing team. She recently completed her LLM in Intellectual Property Law at Queen Mary, University of London.

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

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NIO: Why did Tesla’s Chinese competitor fail to impress NYSE?

September 13, 2018

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NIO could be considered the Chinese counterpart of Tesla: it started from zero, it only builds electric vehicles, and it is very interested in autonomous driving. The Chinese carmaker has filed for an IPO on New York’s Stock Exchange: despite setting its target price at $1.8bn, the pricing gave a share price of $6.26, raising total funding of approximately $1bn. Despite its average performance on the first day of trading, potentially encouraged by an “Underperform” rating by Bernstein, the stock fared strongly on its second day of trading, adding over 70% to its price. Such fluctuation makes one wonder: in the most important stock exchange in the world, what could be the reasons behind such a lukewarm welcome to NIO?

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THE TESLA EFFECT IS FADING

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Tesla started as a crazy idea – it gained momentum as it started delivering functional, working vehicles to its customers. In order for a stock to be long-term sustainable, though, the company has to tick two boxes: the business needs to become profitable at some point and the leadership needs to be serious about driving the change from “ideas” to “implementation”. While Tesla may be on its way to profitability and Elon Musk seems to have toned down his brash attitude (which led to the notorious rejection of “boring, bonehead questions” during a conference call with analysts last May), the markets seem to be turning increasingly skeptical of Tesla’s ability to pull through.

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Admittedly, there are valid reasons for this skepticism. The main driver of sales for Tesla, the US market, is changing: Tesla has sold its 200,000th EV, which means future Tesla buyers will not be entitled to the $7,500 federal credit – they will receive $3,750 until next June, and just $1,875 until the end of 2019; after which point the incentive will be eliminated. Additionally, the electric vehicle revolution is just starting, which means one thing for Tesla: not only will its EVs become more -relatively- expensive for the average American, but they will now have to compete against other automakers’ EVs, which are just starting to hit the markets (and will receive the full $7,500 incentive until they reach 200,000 sales). Finally, leadership at Tesla is suffering in various ways. Elon Musk, the undoubtedly charismatic CEO of the Californian automaker, is showing as much volatility as Tesla’s stock price: after performing almost flawlessly at the last earnings call in August, Elon was seen smoking a joint on Joe Rogan’s live web show. As if Elon’s unpredictability is not enough, Tesla executives are abandoning the “electric ship” in heaps – Dave Morton, the company’s Chief Accounting Officer resigned after just one month at Tesla; today, another high-profile finance executive, Justin McAnear, announced his departure.

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Furthermore, it has been eight years since Tesla’s own IPO and the market is undoubtedly more suspicious of companies burning through cash and overpromising: NIO has only delivered one vehicle, the NIO ES8. The Chinese automaker claims it has pre-sold more than 10,000 units, although it has only delivered 2,000 units so far; most of the pre-reservations are backed by a refundable deposit, which is not really a guarantee of a closed sale.

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IS THERE A MARKET FOR NIO’S CARS?

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The ES8, which is marketed as a direct competitor to Tesla’s Model X has a starting price of around $60,000 (after incentives), which is approximately half of what one would have to pay for a Model X in China. Although the ES8 may be outselling Tesla’s Model X, NIO has no proposition for the lower end of the market – where Tesla’s Model 3 seems to be king. A smaller SUV by NIO, the ES6, is expected to sell for a slightly lower price than Model 3 in China, but its sales/production have not started yet and there are no promises as to when it will eventually hit the market. Much like Tesla, NIO is burning through cash at a fast rate: in the first half of 2018, the company experienced net losses of over $500m. Although in the cash-intensive, automotive industry, negative cash flows upfront are not damning, the markets seem uncomfortable about placing another Tesla-like bet.

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Furthermore, another issue with NIO’s range is that its prices may be too high for a Chinese automaker, yet not low enough to counteract the potential influx of similarly priced offerings from foreign automakers, particularly those having established plants in China.

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Mercedes Benz, for example, sells the long-wheelbase version of E-Class for approximately $60,000 in China – the vehicle is manufactured locally. The classic E-Class (short wheelbase), available in the West, has a starting price of approximately $53,000 in the United States. Given that the Chinese version has a longer wheelbase and is better equipped than the base version in the US, it becomes evident that major automakers with the capacity to produce their electric vehicles locally, can price their cars almost as competitively as they do in the United States. Given that Mercedes Benz and BMW will be producing some of their EQC and iX3 SUVs in China, I would not be surprised to see a luxury electric SUV from a major German automaker offered at a similar price to the ES8. Given the relative lack of expertise and the clouds around the high-volume production capacity of NIO (see below), it is reasonable that the markets expressed doubts about the Chinese automaker’s ability to compete with the behemoths of the automotive industry in the mid-high price luxury SUV markets.

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Not to be ignored, NIO is, at the moment, unable to compete in the budget market, which is expectedly home to the best selling electric vehicles in China. BAIC, a state-owned automaker, is the maker of EC180, an electric city-hatchback with a range of 100 miles / 160km which sells for approximately $19,000, and, depending on the purchase location, it can cost the buyer a mere $7,500 after incentives.

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Admittedly, if the only market in which NIO is operating will soon be crowded with potentially similarly-priced, luxury vehicles from very well established manufacturers, one can explain why the market hesitates to support the Chinese automaker’s vision of profitability.

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NIO IS NOT TESLA.

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A fundamental piece of the Tesla puzzle is its Apple-like approach to making hardware and software: the cars and their software are both produced by the Californian EV giant. Although this may have led Elon Musk to sleep deprivation, it has also allowed the Californian automaker absolute control over the production of their cars. Production is slow? Build a high-tech tent-factory to ramp it up. Automated manufacturing is not working as it should? Break it down and let humans do -part of- the job.

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NIO, on the other hand, does not have its own factory. Instead, it has partnered up with Jianghuai Automobile Co., or as it is widely known, JAC, which produces NIO’s cars in its own factories in China. The companies struck a deal in 2016 for the production of NIO’s ES8, and despite rumours to the contrary, they recently reaffirmed their commitment to working together to produce NIO’s lower-cost ES6. With that said, JAC has recently unveiled the first product of its partnership with Volkswagen: the SOL E20X. Given that JAC will now be producing another SUV apart from the ES6, there may be questions about its ability to achieve the target production (NIO aims to achieve 60,000 sales/year with the ES6) and maintain the same quality levels it previously delivered with the ES8 (which has sold approximately 2,000 units so far). Although NIO is rumoured to be opening its own factory by 2020, the ES6, which has the potential to establish NIO as a credible threat (similarly to what Model 3 did for Tesla) will be produced by JAC. Even the NYSE filing document, as The Verge accurately notes, states that NIO’s “ability to develop and manufacture a car of sufficient quality and appeal to customers on schedule and on a large scale is unproven and still evolving.”

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BAD TIMING?

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Finally, the timing of NIO’s IPO may be slightly unfortunate. Volvo, the Swedish automotive giant was gearing for an IPO this year but it has put it off for the time being. The reason? As Volvo’s CEO recently told Reuters, Volvo has come to the conclusion that “the timing is not optimal for an IPO right now”. The trade wars between the U.S. and China, as well as the escalation of tension between Washington, DC and the European Union are causing potential investors some discomfort. Although NIO may be less exposed to the trade wars, and potentially even benefitting from increased Chinese tariffs on US imports, investors are potentially uncomfortable buying into a company that may be forced to only sell its vehicles in China. Although the Chinese market is the fastest growing EV market in the world, will it be enough, if NIO has to face competition from foreign automakers that have established factories locally?

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Will the market place a bet on NIO and increase its market cap, or will the low-initial-price enthusiasm of today’s trading wear off? Time can only tell.

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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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The Trade War Timeline 2018

 

China US shaking hands trade war

 

US imposes tariffs on solar panels and washing machines: Trump imposes tariffs of 30% on imported solar panels and 20% on imported washing machines in his first strike against China.

4 February 2018China launches investigation into animal feed: China began an anti-dumping and anti-subsidy investigation into imports of sorghum, an animal feed, from the US.

16 February 2018 US national security report released: The US government releases a report that finds steel and aluminium imports threaten US national security under Section 232 of the Trade Expansion Act of 1962. The act lets the president impose restrictions on imports for national security reasons.

1 March 2018US imposes steel and aluminium tariffs: Donald Trump announces tariffs of 25% on steel and 10% on aluminium imports.

8 March 2018Canada and Mexico exempted from tariffs: Donald Trump signs an order to impose the steel and aluminium tariffs after 15 days. He temporarily exempts Canada and Mexico pending the renegotiation talks of the North Atlantic Free Trade Agreement (NAFTA).

22 March 2018China unfair trade report: Donald Trump exempts the European Union, Brazil, South Korea, Argentina and Australia from the steel and aluminium tariffs until 1 May 2018. The US government also releases a report that finds China has been conducting unfair trade practices in order to acquire US intellectual property and technological expertise under Section 301 of the Trade Act of 1974. This act grants the US President the power to impose tariffs and suspend trade agreements against unfair trade practices.

23 March 2018 Steel and aluminium tariffs come into force: Donald Trump’s steel and aluminium tariffs come into effect together with exemptions for certain countries.

2 April 2018 China’s first retaliatory tariffs : China imposes retaliatory tariffs on about $3 billion worth of US imports including pork, fruits and nuts, and steel pipes.

3 April 2018 The US responds to China’s first retaliation: The US government releases a list of 1,333 Chinese products, which could be subject to tariffs of 25%.

4 April 2018China releases its own list: China releases its own list of 106 products, which could be subject to tariffs of 25%.

5 April 2018 Trump escalates the dispute: Donald Trump asks trade officials to consider imposing $100bn in additional tariffs on Chinese goods.

30 April 2018 Tariff exemptions extended by US: The US government extends the steel and aluminium tariff exemptions for the European Union, Canada and Mexico until 1 June 2018.

19 May 2018 A ceasefire is reached: China and the US announce they have reached a ceasefire.

29 May 2018The US breaks the ceasefire: The US government announces it will impose tariffs on $50 billion of goods from China. It also announces limits on Chinese investment in high-tech industries.

1 June 2018 Steel and aluminium exemptions end: The exemptions provided to the European Union, Canada and Mexico are lifted. Their steel and aluminium exports to the US are subject to tariffs.

15 June 2018 The US proposes tariffs on $34 billion worth of Chinese goods: The US Trade Representative releases a revised list of products to be subject to 25% tariffs.

15 June 2018China proposes retaliatory measures: China issues an updated retaliation list for its 25% tariffs.

22 June 2018 The EU retaliates to steel and aluminium tariffs: The European Union slaps retaliatory tariffs on the US, covering $3.2bn worth of US products.

22 June 2018 Donald Trump responds to the EU retaliation: Trump threatens a 20% tariff on all US imports of cars assembled in the European Union.

1 July 2018Canada retaliates to steel and aluminium tariffs : Canada imposes retaliatory tariffs on US products totalling $12.8bn worth of US products.

6 July 2018 The US imposes its next round of tariffs: The US imposes tariffs on $34 billion worth of Chinese goods.

10 July 2018The US proposes tariffs on more goods: The US announces plans to impose 10% tariffs on another $200 billion worth of Chinese goods.

Convert your vacation scheme into a training contract

A conversation with Rosie Watterson

 

We caught up with Rosie Watterson, the founder of the blog Apply.Shine.Win, to discuss how you can convert your vacation scheme into a training contract offer.  We’ve transcribed our interview below. (Note: It has been lightly edited.)

Rosie is a future trainee solicitor at Herbert Smith Freehills. She studied History at Queen’s University Belfast, and has recently completed the GDL at BPP in Leeds.

 

Rosie Watterson interview
Rosie Watterson, Future Trainee at Herbert Smith Freehills

What advice would you give to students looking to stand out during their vacation scheme?

One of the things that’s really important — and I’ve written about it in my blog before — is keeping a work diary of what you do. Because at the beginning of the scheme, you do a lot of stuff that you don’t quite understand. If you’re trying to write down what you’ve done, that’ll prompt you to ask questions like: Who is this for? What’s the point of this work? What does the client want? And also broader questions that explain why you’re doing it.

That’s really important if you’re on, say, a three-week scheme, because by the end of it, you’ve moved to a different department and you’ve met so many new people. It’s quite hard to remember all the work you did at the beginning of the scheme, and definitely hard to remember all of it in detail.

So I think it’s good to write it down. Then read over it again, and go back and ask the supervisor that you were working with, just so you can talk them through the work you did. But make sure you understand it, and that you can explain it to people, because there’s a good chance in an interview that you’ll have to explain what work you’ve done to a partner who’s from a completely different department.

And always make sure you’re looking at it at a deeper level: Why am I doing this? How does it benefit the client? How does that benefit the firm? What ultimate result do they want?  By the end, you’ll have a very thorough list of everything you’ve worked on, and it’ll be a lot easier to highlight your achievements to either your supervisor or the person you’re doing your training contract interview with.

So, in the final training contract interview, students may be asked about what they did during their vacation scheme?

Explaining technical topics on your vacation scheme white board
“Make sure you understand it, and that you can explain it to people, because there’s a good chance in an interview that you’ll have to explain what work you’ve done.”

That’s right. I’ve mentioned before in one of my blogs: during my vacation scheme, I was in the TMT department and then I sat in a different department after that. So, it was a three-week scheme. And in my interview, my interviewer asked me to describe something I’d worked on in the first week. And I said the word “mainframe” (of a computer). And she got me to explain what I meant by that.

If I hadn’t kept that journal and then written about it and then re-read it and gone over it, then I would have had absolutely no idea. I came out of that interview and ran straight up to a TMT associate that I was close with, and I was like: “Is this right?”

So, yes, for me, it’s definitely worth doing. And even technical terms, just write them down in a really simple way that in three weeks’ time you’ll still understand.

I would just add for students — don’t mention something just because it’s technical and you want to impress, because, as you mentioned, sometimes an interviewer will ask you to explain what it means.

Yes, I think that is a bit of an honesty test. They might think you have no idea what the mainframe of a computer is, and then they can ask you: “What is the mainframe of a computer?” And if you come out confidently with rubbish, then they know you’re quite willing to talk about something that you know nothing about, in a convincing way, and that’s obviously not what clients want you to do.

It’s better to say: “I’m not actually 100% sure. My understanding is XYZ. However, I would prefer if I could go back and do a bit more research to get the answer to you.” It’s okay not to know. I think it was perhaps a bit of that is a test as well, to just see if I was going to make something up so I didn’t have to admit I didn’t know.

Agreed! It’s important to remember that interviewers don’t expect students to be the complete picture. They understand students are still learning.

Yes, they expect you to understand what you’ve done and why.

I often hear from students who find it hard to put themselves out there during their vacation schemes, perhaps because they’re shy. Do you have any thoughts on that?

Vacation scheme social event chatting
“…they might not give me a training contract or vacation scheme, but I want to come out of there with everyone thinking: ‘Oh, isn’t she nice?'”

The first point is not to put tons of pressure on yourself before you go into interviews. I always just focused on being likeable. I thought they might not give me a training contract or vacation scheme, but I want to come out of there with everyone thinking: “Oh, isn’t she nice?”

You can do that by going up to people and making conversation, not even about law stuff. You can ask people what they did at the weekend or whether they’ve got any pets. Just chat; that’s what people like. If you can do that, it’ll make you more comfortable, and then you’ll be able to show off your knowledge.

Is that something you did on your vacation schemes? Did you go knocking on doors to introduce yourself?

Yes, for one of the vacation schemes, there was no trainee to show you around the office. So, you just had to get up, knock on doors, and introduce yourself. The first two doors it was quite daunting; by the third door, you’re like, “This is fine.” And by the 10th door, you’re like, “I can make small talk with anyone!”

The other thing is remembering that whatever people’s title, they’re also just people. Partners are just people. Graduate recruitment managers are people. And people all want the same thing. We all want to have a nice conversation with someone about something interesting, where no one looks like they’re going to faint with terror.

Talk about yourself vacation scheme
“We all want to have a nice conversation with someone about something interesting.”

So just bearing in mind when you are chatting to people, even if they’re the CEO of a company, they’re just people and they like to be talked to like they are just people.

And, as far as confidence is concerned, realising that, yes, of course they’re further on in their career and they make more money than you, but that doesn’t mean you don’t have anything interesting or intelligent to say to them, or you don’t have anything to say that they’re interested in. They want to talk to you, too, because you’re new and interesting and from outside the firm.

So, to summarise: students should remember partners and recruiters are just people, and talk about what they’re interested in.

Yes. And, frankly, no one wants to talk about law, and everyone wants to talk about Love Island, so just bear that in mind.

So, “Watch Love Island” is the takeaway from this?

No, that’s not my advice! I think it’s terrible! But everybody does want to talk about it.

And everyone has their opinion.

Yes, so it’s okay to chat about stuff that isn’t law. If you’re a history student, you don’t know anything about law, and also they probably don’t want to spend their networking lunches talking about what they do.

I did the Jones Day vacation scheme, and I don’t know if you know the training system, but it’s non-rotational.

They don’t put you in the seat, do they?

That’s right.

That must be daunting.

It was terrifying. But as you said, knocking on the first two doors — or ten doors — was scary. But after that, it was fine. By the second week, it became much more natural.

Yes, absolutely.

I think you need to come to terms with the fact that the worst thing that can happen is you say something stupid and then don’t get a training contract… and neither of those things will kill you.

A couple of times I’ve had a few glasses of wine and said something that I found terribly embarrassing at a networking event, and I’m fine. Everything is still fine. My career is still okay.

I think you’ve got to be confident and chatty and that means if occasionally you have a foot-in-mouth moment… well, it happens to everybody.

Do you have any advice for the social events during a vacation scheme? How did you approach those situations?

I think it doesn’t matter if you’re doing something you don’t like: you just have to get stuck in, because you’re being assessed the whole time. They haven’t spent all this money on the socials not to assess you on them. And recruiters will probably say it’s not true, but it is. So, the thing is, even if you’re doing something you hate, even if it’s like netball, which I think is the most boring thing in the world, you just have to get stuck in. You just have to really go for it and look like you’re having a good time.

Vacation scheme social
“They want to know that you’ll be able to get on with your intake.”

It’s also important that you gel with the other vacation scheme students, because they want to know that you’ll be able to get on with your intake and not just get on well with the people above you — so not just the trainees and not just the associates.

And they do so many socials, and you’ve got the adrenaline going, so you’re quite up and down anyway, energy-level-wise. You just have to make sure that you go and get involved.

But if it gets to 11 oʼclock and everything’s sort of settling down, then go home. Get some sleep and watch TV, because downtime is really important and you don’t get a lot of it during vacation schemes.

Do you have any other tips for the vacation scheme?

While the real work needs to take priority, you will be assessed on any tasks that the graduate recruiters give you. So you need to designate an appropriate amount of time to it – it’s easy to forget about them and just focus on the real work. But that’s a mistake.

And, also, if the graduate recruiters arrange presentations — lunchtime networking events — don’t see them as optional, because they’re not. Often, at the beginning of schemes, everyone turns up, and by the end of schemes, everyone’s tired and busy and people start dropping out for kind of rubbish reasons. But, they’re really important to go to. Sit close to the front and ask good questions.

It just takes five minutes to prepare some questions before you go in, and to look interested even if you are not. I think those presentations are quite helpful, because, as you well know, when you do your training contract, you don’t get that many seats to decide what you want to do for the rest of your legal career. So it’s like a free pass to find out what a whole department does.

If you did find one of the presentations really interesting, it doesn’t hurt to email the person and ask if they can get a coffee and talk more about it. And that’s you showing you’re proactive and engaged and interested. And you want to get the most out of the experience. Whereas if you look bored — or I’ve seen someone be on their phone the whole time during these presentations. Or you start making excuses not to go; you start giving the impression you don’t want to be there, rightly or wrongly.

How can students prepare ‘good’ questions?

Keep on top of the business news during your vacation scheme
“Do a bit of research – just five minutes on the BBC – before you go to these presentations.”

Well, it doesn’t hurt to have some background commercial awareness, which if you’ve got a vacation scheme, you will have. Also, maybe do a bit of research – just five minutes on the BBC – before you go to these presentations, just so you can see what is going on, because they might mention something or mention one of the clients, and then you’ll already have some background knowledge.

And also just asking about what they actually do – day-to-day. What they did today; what they are working on; what they like the most; what the trainees in their department do; etc.

It’s always quite interesting to find out about people’s career progressions. Sometimes they volunteer information, like if they went on international secondments or if they worked in a different department before. I think people quite like talking about themselves — everyone does — so it definitely doesn’t hurt to get them chatting about their career. You’ll learn quite a lot from that, anyway.

I think the best questions are genuine questions, so you’re genuinely interested and you’re not just asking to look smart. If you give it some thought, about what information you would like to get out of the presentation, then you will have some questions pop into your head.

And if you think a question is stupid, it comes back to the worst-case scenario. You ask a question, maybe everyone in the room thinks: “That’s a stupid question.” Five minutes go by, and you’re the only one that can remember. So, if you’ve got a question, it’s worth asking — unless it’s something very basic you should know, like: “What is law?” “What is Uber?”

But if you’re worried about asking a common-sense question- well, you might as well . Because as the cliché goes, there are probably other people who are wondering it, and you’ll probably get some points for being the only one who asked.

How about dealing with rejection? What would you say to students about that?

I did a vacation scheme at HSF, and got it. And I did one at Bakers, and didn’t. So that was obviously pretty rubbish, to not get offered a training contract — because I thought, “Ahh, this is where I want to be.” And looking back, I’m pleased, because I think working at HSF will suit me better. But at the time, I was like: “This is terrible!”

You’ve got to give yourself time to be sad about it, because you’ve spent a lot of time doing an application, gone through the assessment centre, gone to open days and dinners, and done the whole vacation scheme. You’re allowed to be gutted about that, because you can envision yourself there and you’re not, all of a sudden. And while I don’t believe there’s one path for us all and we’re all following the right path or whatever, I do think that sometimes you can dodge a bullet.

I have had interviews with firms that, now looking back, I’m quite pleased I didn’t progress with, because I just think it would have been a pretty bad fit. And, actually, I realised that the graduate recruiters knew that at the time, and I didn’t. Whereas, now, I’m like: “Ahh, that was the right thing to happen.”

My friend said that once she was talking to a partner about rejection and he said, “I’m only sat on this side of the table because I’ve received more rejection than you.” And I thought that was quite funny, really, because it’s not something that people like talking about. But every trainee has faced rejections.

Confidence vacation scheme
“[The partner said:] ‘I’m only sat on this side of the table because I’ve received more rejection than you.'”

I tend to see it as like getting over hurdles. So, if you’re constantly falling at the application stage, it’s probably not because you’re not good enough. It’s just you’ve not quite nailed writing applications yet, and that’s okay. You just need to get feedback and improve, and once you’ve gotten over that hurdle, you can move onto doing psychometric tests. And maybe you’re no good at those — and no one is, you just need to practice them until you are. It’s a natural part of the process, and the important thing is getting feedback and focusing on improving, not beating yourself up about being rejected.

Some students get bogged down by statistics, such as how many students get recruited from vacation schemes for training contracts, and that can put them off applying to certain law firms. What would you say to that?

I tended to think that, when I was applying to HSF, there’s 70 training contracts and I only need one, so it doesn’t really matter how many other people apply, there are enough training contracts for me to have one.

So, say if it was only 30% of people from the vacation scheme got a training contract — well, that’s fine, because that’s enough for me to be in that category. It’s more than one, and if only one gets a training contract, then I’m still willing to bet it’ll be me. At least that’s how I saw it, and I didn’t pay much attention to stats, because I thought, you know, if I don’t get it this time, I’ll get it next time — and if I don’t get it next time, I’ll get it the time after. And if I just keep hacking away at it, I’ll be sure to get one eventually.

Vacation scheme rocket optimism
“If you keep improving, it is inevitable that you will be good enough to get a training contract.”

That’s very optimistic of you! Where did that self-confidence come from?

I suppose to a certain extent it was blind optimism, because I have no empirical evidence to base it on.

But I just thought “There are enough training contracts in the City for me to have one. And if that means that I have to spend five years going to open days, applying, and improving my technique, then so be it.”

I thought if I ’m not doing the same thing over and over again, if I ’m constantly working on my technique,  constantly improving,  re-drafting applications, learning how to write in the STAR technique, improving my interview answers…then I’d inevitably get a training contract one day. Even if  I had to have another career, if I keep doing this in my free time — eventually, one of those firms would give me a training contract.

If you keep improving, it is inevitable that you will be good enough to get a training contract: it’s just a matter of time, really, and commitment to it.

So, when I had a vacation scheme and I was worried about not getting a training contract, then I’d just think: “Well, I can do this again next year! It won’t be fun, but I’ll do it again. We’ll keep going until I finally get one.” So, I think if you just look at it as a battle of attrition between you and the City, rather than you competing with a bunch of people, then it  seems almost inevitable. And it’s quite easy to have confidence in that.

I know a student, he spent four years applying, and I remember just before the end of the year and he was saying, “If I don’t get anything this year, I’m just going to quit law and find another job.”

So close.

He was, but it was a happy ending, because he’s about to start at Freshfields!  Last year, he secured a training contract.

I was so impressed by how hard he worked. Because he didn’t have the grades, he went the extra mile to contact partners for coffee, and he managed to secure a couple of days’ work experience that way.

Yes, I think there’s a lot to be said about overcompensating. I had mitigating circumstances, but my A Levels weren’t particularly good, and I think that became a point of insecurity for me. So I worked my butt off at undergraduate to get really good marks, and was also really throwing myself into extracurriculars and law stuff, and constantly on the lookout for things that would demonstrate my commitment to law and also would look good on my CV. In a way I was fuelled by overcompensating, because I realised that I’ve got this weakness, but I don’t want it to be the reason I didn’t get a TC.

Hard work vacation scheme
“I think it does sometimes help if you’ve got a bit of a blip. Instead of looking at it as  career-ending, you just need to think, ‘Okay, well, we’ll just have to make up for that, so let’s crack on.’”

I think it does sometimes help if you’ve got a bit of a blip. Instead of looking at it as  career-ending, you just need to think, “Okay, well, we’ll just have to make up for that, so let’s crack on.”

Finally, how did you find your vacation scheme at Herbert Smith Freehills?

I found the work at Herbert Smith Freehills really interesting. When I was there, I could see myself being happy there. And the people were all friendly, chatty, outgoing, and had a good sense of humour, which is really important to me.

So, yes, I’m quite excited to start, to be honest. When they offered the training contract to me, I didn’t really have to think: I was definitely sure I wanted to work there.

No doubt you will do well. Thank you so much, Rosie. You’ve shared some excellent advice here.

 Thank you!

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We’ve compiled our best resources to help you prepare for your interviews, assessment centres and vacation schemes.

In each case, click on the image to open the resource.

Vacation Scheme Work Log

Vacation Scheme Work Log
Use this fully editable PDF to keep track of your vacation scheme workload and prepare for your final training contract interview.

 

Law Firm Overview Plan – what makes a law firm different?

Law Firm Overview Plan
Use this fillable PDF in your applications, interviews and vacation schemes to determine what makes your law firm different. You can also check out our 2018 training contract application guide.

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Competency Interview Questions Plan

Law Firm Competency Interview Questions Plan
Use this fillable PDF to prepare for the different types of competency questions at law firm interviews and assessment centres.

 

Written Case Study 1 – Legal Analysis

 

Law Firm Case Study 1 Legal Analysis PDF
Based on a real written exercise, this mock case study will help you prepare for your law firm assessment centres.

 

Written Case Study 2 – Mergers and Acquisitions

Law Firm Case Study 2 Mergers and Acquisitions PDF
Our second mock case study is based on a real mergers and acquisitions written assessment. 

 

Advice and resources for the Watson Glaser Test 

by Jessica Booker

Jess has spent 10 years working in graduate recruitment, including as trainee recruitment manager for a magic circle firm. She is the founder of Star Potential, a consultancy business which provides a range of services in early careers recruitment. She can be reached via LinkedIn or by email at [email protected] for more information.

Setting the scene

Do the test when you have a fresh mind and are at your best. Your ability will be impacted if you have had a stressful day, are tired, or have been working for a long period of time before the test. Try to do it when you are alert – for instance, I am not a morning person at all and my brain doesn’t really kick in until mid-morning. So I would never sit a test first thing in the morning, but someone else who is an early bird might find it is the best time for them.

Schedule your test into your diary, like you would a face-to-face assessment. It means you are less likely to do it when you have done everything else you need to, or worse forget to do it within the allotted timeframe you’ve been given.

Try to get rid of any distractions you can. If you are doing it online on a computer/laptop, close down all the other tabs you have open on your computer and also turn notifications off on your mobile phone. The smallest pop-up or alert can distract you and you can lose your concentration.

Completing the Watson Glaser Test

Try to be decisive with your answers. Most of these tests are multiple choice. If you are unsure what the answer is, try to eliminate those you definitely know it won’t be and then try to make a reasonable guess for the remaining answers.

Keep an eye on the time allocated but don’t worry if you don’t complete the full test in the allotted time. Many of these tests are designed so a significant proportion of people won’t complete the test. By not completing the test does not mean you have failed it and you can still do very well, although it is obviously better to try and finish it if you can.

Funny doing watson glaser test wrong

Judging your performance

Don’t assume because you have been successful/unsuccessful in one test that it means you will have the same outcome with similar tests. You don’t know how the firm is using the test as part of the selection process (some firms will use it as a sole filter, others will weigh it up against other information in your application), plus you don’t know what the norm group (who you are being benchmarked against) is nor the percentile cut off (can be as low as 20th percentile or as high as 75th percentile).

Some thoughts on practice

You can’t perfect your ability in these tests in a short space of time so there is little point practicing like crazy. You can get more comfortable and confident with them and this can enhance your abilities to do well. Long term practice can enhance your abilities, alongside developing your verbal comprehension through other activities, but you will get more benefits from the other activities (e.g. building your CV and skill set) so these things are probably more worthwhile investing time in long term than just practicing and practising tests over and over again.

Practice tests and resources

General websites (various tests):

http://www.practiceaptitudetests.com/
http://psychometric-success.com/downloads/download-practice-tests.htm
http://www.psychometric-success.com/downloads/download-practice-tests.htm
http://www.graduatewings.co.uk/try-free-tests

Watson Glaser:

https://www.assessmentday.co.uk/watson-glaser-critical-thinking.htm
http://www.linklatersgraduates.co.uk/application-process/critical-thinking-test
https://www.assessmentday.co.uk/watson-glaser-critical-thinking.htm
https://www.assessmentcentrehq.com/watson-glaser-practice-test/

Verbal reasoning:

https://www.verbalreasoningtest.org/
https://www.practiceaptitudetests.com/verbal-reasoning-tests/
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https://www.wikijob.co.uk/content/aptitude-tests/test-types/verbal-reasoning-test
https://www.assessmentday.co.uk/aptitudetests_verbal.htm

 

Common sense about law applications

Thanks to Ben Staveley for sharing his advice on training contract applications with our students. As you’ll see, Ben was a partner at Freshfields for 15 years and had a hand in recruitment. I encourage all of you to print his guide off, read it a few times, highlight it and have it by your side when writing your vacation scheme or training contract applications; it’s the best guide I’ve seen on the application process.

I came into contact with Ben after reading his book, Faultless Grammar: The busy lawyer’s reminder guide. I’d thoroughly recommend it to any of you looking to improve your writing.

Finally, you can check out our 2018 training contract application guide here.

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An interviewer reviewing training contract applications

A Guide by Ben Staveley

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Let me tell you why I’ve written this, and why you might want to read it.

For over twenty years, I worked in the same law firm. It became, no thanks to me, one of the most successful law firms in the world. When I was a partner there, I was asked to join the group of partners that interviewed students who had applied for training contracts. So, to prepare for the interviews, I read lots of applications.

Later, I got even more closely involved in how the firm recruited its trainees. I became not just an interviewer, but someone who decided who should be invited to interview. To do that, I had to read all the applications the firm received, good and bad, and sort them into two piles.

The ‘no-to-interview’ pile was taller than the ‘yes-to-interview’ pile. That’s not because we liked turning people down without interviewing them. But if we’d tried to interview everyone who applied, we wouldn’t have had any time left over to advise the firm’s clients. We had to draw a line somewhere.

We used to worry sometimes about whether we were turning down, without inviting them to interview, some very talented people. If we had, we’d have been harming the firm. We’d have missed out on recruiting someone who could have been a real asset to the firm. Of course, we could never tell whether we had missed out. These possibly-talented people were the ones we had turned down. So we never saw them.

Our worrying, in other words, never led anywhere productive. In the end, we just had to get on with reading the applications as carefully as we could, to give ourselves the best chance of interviewing the right people.

I have left the firm now, but I would guess that not very much has changed. And that what that firm does is what most firms do.

If you are making any sort of application to a law firm, you want your application to end up in the ‘yes’ pile. If you read on, I’ll tell you what to do to give yourself the best chance of doing that. I’ve written it in the form of some questions you might have about the application process, with my answers.

It doesn’t matter what you are applying for – a training contract, vacation placement or a place on an open day. I’ve written about what I know best: applying to a solicitors’ firm. But you may find some of it relevant if you’re planning on applying for the bar, or even if you’re applying for something outside the law.

I hope you find this short guide helpful in supplementing the excellent advice already. It all works, it’s then over to you to do well at the interview. That’s another story.

Who’s going to read my training contract application?

Training contract applications character

Students don’t tend to spend any time worrying about this question. There’s no way of answering it for certain, of course. But that doesn’t make the question a pointless one. Whenever you write anything at all, the question ‘who’s my reader?’ is a crucial one. When you write a text to a friend, you have a picture of her in your mind. You put yourself in her shoes. You don’t tell her things she knows already. But you fill her in on things she doesn’t. This isn’t a conscious process – it happens automatically. But if you don’t have a reader in mind, you’ll find it harder to write well.

In what follows, I’m going to have a reader in mind. It will help if we give the reader a name – let’s go for Alex.

But I’ve no idea who Alex is

No, that’s right. But you know something about Alex, don’t you? You know which firm she’s from, for a start. (Actually, you don’t know whether Alex is a he or a she. I’m going to assume Alex is a she, but nothing turns on this.)

Going back to Alex’s firm – you’ve read a bit about what the firm is like: how big it is; whether it’s based in London or somewhere else; whether it likes to present itself as a cool newcomer or an established firm with a long pedigree.

You may have met someone from the firm at some recruitment event or other: maybe even Alex herself.  And even if it wasn’t Alex, what the someone said to you about the firm was likely to be “on-message”. Firms don’t tend to send mavericks to recruitment events.

But can I even tell whether Alex is a partner or someone in Human Resources?

No, you can’t know for certain – unless you’ve met her. But it would be a bit of a surprise if it were a partner who was the first to read your form. In most firms, the task of form-sifting is delegated by the partners to someone in HR, even if the partners still do the interviewing of the candidates Alex selects. It’s the person in HR you’ve got to impress first – otherwise you won’t get to meet the partners at interview.

If Alex is indeed in HR, that’s no bad thing. Because she reads so many forms, Alex is likely to be fair-minded. She’s trained herself to read your form fairly, and won’t let prejudices or preconceptions get in the way of awarding the interview slots she has available to the candidates who write the best applications.

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But I still don’t really know very much about Alex, do I?

Well, you’ve made a start. And though you may not know much about Alex personally, you can, or should, have a sense about what her day is like. On the day she reads your application, she’s not just going to be reading yours. She’s going to be reading twenty. And she knows that of those twenty applications, she would normally have room to offer, say, five interviews. That’s not an iron law. If the twenty forms she reads on Tuesday are a better than average batch, she might offer eight interviews. If Friday’s twenty are worse, two. But Alex is only human. She knows that the partners who do the interviewing will hold her to account. They don’t like spending time interviewing wholly unsuitable candidates. So she will want to be convinced in the first place that you’re not one of those.

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What does that mean, ‘totally unsuitable’? How can I be ‘totally unsuitable’?

Well, for a start, you’ll be totally unsuitable if you don’t really want to join Alex’s firm. If it’s an international commercial firm but you have no real interest in business, for instance. Or it’s an immigration law firm and you have no real interest in individual human rights. This is a time to be honest with yourself. Do I really want this job? Will I enjoy doing it? Any legal job is going to involve a lot of dedication and hard work. If what Alex’s firm does doesn’t truly excite you, why should you think that you’ll be able to commit yourself to the sustained effort you’ll need to get on? Feigned enthusiasm is no good to anyone. It probably won’t fool Alex, who is trained to spot it. If it fools her, you won’t get past the partners who interview you. And if you do, you’ll end up miserable in your ‘chosen’ career. Not very enticing, is it?

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All right. But I might just be applying for an open day or similar event to see what I think. I don’t know whether I might like it or not yet. Do I have to pretend to be more interested than I am, or might end up being?

No. Be honest. Alex respects honesty. And her antennae are highly attuned to detect its opposite. If you’ve no legal experience yet, but want to visit a firm to find out what it’s like, that’s fine. Alex is sympathetic to the Catch-22 that would prevent someone getting a first taste of the law on the grounds that they’d never tasted it before. If that’s where you are, say so. Alex will want to know why you think you might be interested – make sure you explain this.

Also, if you’re coming to think about a legal career a bit later than some, explain why. Perhaps you weren’t convinced until now, and saw yourself doing something else, but have changed your mind. That’s all right. People are allowed to change their minds. People who are straightforward about themselves are attractive. But keep in mind always that Alex will be asking herself questions about you as she reads your application. Try to anticipate those questions, and answer them.

Law firms looking for different interview backgrounds

I get the picture. But how do I make myself stand out? What will Alex be looking for?

If the firm has its own application form, you can tell a lot about what Alex will be looking for from the form itself – the questions it asks you. Although most firms look for broadly similar characteristics, each firm asks you slightly different questions when you apply.

Why is that? It’s not done to irritate you, though that may be a powerful secondary effect. The reason is that each firm takes recruitment seriously, and has a slightly different view of what qualities are the most important. So look at the questions very carefully – they give you the best insight into what characteristics or qualities the firm puts at the top of its list.

You can also learn a lot from the firm’s own website, particularly what the firm says about its recruitment process. The website may say explicitly what characteristics it is looking for in those it recruits. If so, you can bet that Alex will be looking to see whether you can convince her that you have those qualities already, or can develop them. The form will be carefully designed to let her reach a judgement on that.

Different firm qualities

OK – I get that. But you said that ‘most firms will be looking for broadly similar characteristics’ – what are they, then?

At the broadest level, most firms are looking for applicants to have three characteristics.

First, you’ll have to be bright enough to do the job. A lawyer’s job is to deal with clients’ problems. You have to be able to analyse those problems, work out how the law affects them, and suggest solutions. That isn’t straightforward. It’s beyond the clients themselves, which is why they’re paying you to give them advice.

Secondly, you’ll need determination, character and stamina. Law isn’t an easy option: clients are demanding, and firms compete with one another for work. Their business success depends on impressing clients, so firms want everyone working for them to be willing to do as much as it takes to put the job first and get it done. You can expect long hours, often unpredictable. You will need a determination to do the very best job you can, however adverse the circumstances.

Thirdly, human qualities: your job will need you to get on well with clients and colleagues. You’ll need to be able to empathise with the clients’ problems and win their trust. You need a strong ethical sense to help your clients make tricky judgements (and you’ll come across some tricky judgement calls of your own). And you need to be a supportive colleague, happy to help others in the firm who are in need of a hand.

But what about ‘commercial awareness’? Why isn’t that on your list?

It’s true that many firms – principally firms advising business clients, of course – make a point of saying that they look for commercial awareness among their recruits. This leads students, eager to develop this elusive quality, to spend hours trawling the media for business news, an effort that probably spikes in the night before an interview.

I am sceptical that this is enough to fool many interviewers. If you are genuinely interested in the business news, good luck to you. You’re probably rather an unusual student. If you’re not, you might be better thinking about some more basic questions: if this firm advises business clients on their problems, why am I interested in shaping a career around doing that? What is it about the business world that might be of interest?

If you do want to read something about ‘commercial awareness’, try a book called ‘Commercial Awareness 2015/16’, written by Chris Stoakes. Declaring an interest because he is an old friend and ex-colleague of mine, I can tell you that it is excellent.

Once I’ve identified what qualities Alex is looking for, how do I convince her I have them?

Sometimes, the application form itself will help you. Let’s say that Alex’s firm is particularly interested in tenacity. The form may give you a framework. It may say explicitly: ‘Write in no more than 250 words about a time when you have had to display tenacity in meeting a challenge.’

But sometimes forms don’t give you that hint. My old firm for example asked for a more general personal statement. But don’t let that lull you into thinking that Alex isn’t interested in the qualities you will need. She’s just looking to see if you can convince her that you have the X factor without flagging up her interest in the form of a direct question about it.

What about saying explicitly ‘I am a tenacious person’. Is that what Alex wants? It shows I’ve picked up what they are looking for

Well, yes. But it doesn’t really help that much. Alex is looking for a bit more than that. It’s a bit easy simply to identify a quality and say that you have it. Everyone can say that, and nobody says the contrary. Alex doesn’t often read ‘I am aware that the firm is looking for tenacious people. However, I tend to crumble at the first hint of adversity, and my friends say I never see anything through.’

Showing competencies in training contract applications

What Alex wants is evidence. She’s going to understand that, if you took on some role in a failing student society and ended up doubling its membership, you may have had to stick at things. Tell her about it. You don’t even need to say ‘and this demonstrated that I am a tenacious person’ – Alex will get the point.

But don’t I need to be up front about my achievements? Don’t I need to do this to stand out

You have to reach your own judgement as to how assertively you want to come across. Remember, though, that Alex will mistrust things you write that she sees as just puffing yourself up.

Don’t, for example, say that you’re ‘passionate’ about one of your subjects if what you really meant that at least you found it more interesting than something really boring you were studying at the same time. Don’t say that your fluency in French will make you an ‘invaluable asset’ to the firm’s French practice. No, it won’t. The firm will have a host of fluent French speakers who are experienced lawyers. Alex will simply think that you come across as unrealistic, or immodest, or both.

To show I’ve read the website, should I refer to some of the firm’s awards or deals that appear there?

No. Alex just cringes when she reads that. She’s not reading the form to find out about the firm she works for, which she knows far more about than you do. Amazingly enough, Alex wants to find out about you. Don’t waste space telling the firm about itself. Alex will feel she’s working in an echo chamber.

A student telling a recruiter about the firm

It’s much better to show more subtly that you’ve done your homework by mentioning characteristics about the firm that are relevant to why you’re applying to it. For example, if you are particularly interested in some areas of law that the firm practices in, why not write about that?

How much should I write?

This is sometimes a really easy question, because the firm tells you what it wants. It gives you a word limit. If there’s a word limit, that’s a maximum. Don’t exceed it. If you’re in a Word document, use the ‘word count’ tool under ‘review’ to check how many words you’ve got. If it’s longer than the word limit, cut it down. Alex will notice it if you exceed it.

Even if you haven’t got a word limit, remember how busy Alex’s day is. She will be grateful if you are concise. If you become a practising lawyer, you will have to become expert at conveying advice succinctly. Alex will react favourably if you show that you can already do this when writing about yourself.

Edit your application to see how much you can pare it down without losing any of the meaning. You may be surprised at how much you can cut out.

So I can’t just send in my CV with a covering letter?

Well, some firms may be happy with this for some positions or events. For example, they may be happy to let you apply for an open day through a CV, whilst still asking applicants for training contracts to complete a bespoke form. Whatever the firm asks you to do, do it. A lawyer needs to be careful and meticulous, and a law firm expects you to be careful and precise in the way you go about applying to become one.

If you do submit an application in the form of a CV plus a covering letter, don’t simply repeat something from your CV in the letter. Alex will resent you making her read the same thing twice. If there is some point from your CV that you want to refer to in your covering letter, fine: but if you do that, acknowledge that you are doing so (‘as you will see from my CV, I have spent time working in an IT support role’) and avoid repeating unnecessary detail.

Don’t cut and paste bits from your CV into a covering letter. Your CV will often be written in a staccato style, rather than in the full sentences you should use for a letter.

Any tips on CVs?

There is lots of good advice available from the university’s Career Destinations site about how to put together a CV. So I’m just going to say a little bit about what Alex thinks about CVs.

With a CV, Alex’s main concern is Don’t Waste My Time.

When Alex gets a CV and covering letter, you can’t tell what she’ll read first. What I used to do was glance at the CV first, before reading the covering letter. Alex may well do the same. If so, she’ll not spend very long at all – maybe less than half a minute – looking at it. What she’s trying to do is to download from it all the most important facts about you before she reads your covering letter.

That makes the CV important.  If Alex thinks that your CV is poorly-constructed, she might not get as far as reading your covering letter. And even if she does, she’s already thinking: this applicant probably isn’t for us.

So you need to concentrate on getting the information across to Alex as quickly and painlessly as you can. Make every word count.

Give me three ‘dos and don’ts’ that I can keep in mind when I make an application

All right. Some of what comes next follows from what I’ve already said.

Do:

  1. Explain – ideally right up front – why you think you might want to follow a career in law, and with that firm in particular (or a firm like it if you are not applying for a long-term position but a placement). You are not trying to flatter Alex, but to get her to understand that you’ve made a considered decision in applying to her firm
  2. Write realistically and straightforwardly about yourself. Self-knowledge is an attractive asset. Draw attention to what you think you are strongest at, but don’t be afraid to acknowledge that you are not perfect. Alex has yet to meet a perfect applicant
  3. Mention any experience you have that may be relevant. Sometimes applicants assume that Alex won’t be interested in, for example, work experience outside the law in the form of a weekend or holiday job. But she will be: it will show her that you’ve experience of turning up and applying yourself in an environment you might not have chosen if you hadn’t needed to earn some money.

A McDonalds student is chosen for a training contract interview

And don’t:

  1. Assert you have qualities without giving Alex some evidence that she can use to corroborate what you say about yourself
  2. Write in clichés. Alex sighs when she reads that you are ‘passionate’ about law, ‘relish challenges’ and spend your time ‘honing your transferable skills’. In the law, you will need to use language carefully and thoughtfully. If you use stale, third-hand expressions when you are writing about yourself, Alex won’t be convinced you will ever be able to
  3. Make mistakes in your spelling and grammar. A lawyer’s professional responsibilities involve meticulous checking of detail. Alex finds it staggering that you could imagine she will take your application seriously if you don’t take the trouble to make sure it is completely error-free.

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Some examples of what to write and what to avoid

“My name is Sean McDonald and I am a second year student at the University of Southampton studying law.”

[idea]Comment: think of Alex. Will she already have gathered this information from something you’ve already written? If so, leave it out.[/idea]

“It would be an honour to indeed join the esteemed firm of Pyne Martin. You are recognised by Chambers as among the top three firms representing local authorities for contract outsourcing work and hospital trusts for medical negligence.”

[idea]Comment: Alex is immune to the flattery, and is unimpressed.[/idea]

“I chose to study the law of medical negligence as an optional module in my second year, and came across the issues that arise for local authorities in outsourcing when I worked for Waveney DC in the summer before I came to Southampton. So I was interested to reads about Pyne Martin’s strong reputation in both these areas.”

[idea]Comment: much better. Alex knows that you have read the website, and sees why the practice areas may be of interest to you.[/idea]

“My parents always told me that I should become a lawyer because I was always getting the better of arguments with my brother and sister.”

Mistakes in training contract applications

[idea]Comment: a bit strained. Surely your thinking has developed since then? The terms that may spring to Alex’s mind include ‘shallow’, ‘conceited’ and ‘confrontational’.[/idea]

“In my second year, I have been intrigued to study a module on environmental law, which has opened my eyes to the impact that the rule of law has on the world we live in and how legal issues permeate every aspect of the lives of a country, including the state, businesses and citizens, all of who have different and sometimes conflicting interests which the law must constantly seek to accommodate and reconcile in a manner that takes account of the future as well as the present.”

[idea]Comment: too long. 87 words: you need to edit it. Burdened with cliché, and with metaphor that betray a lack of thought (how can anything ‘permeate’ an ‘aspect’?). Oh, and ‘all of who’ is ungrammatical – it should be ‘all of whom’. Try instead: ‘I have recently enjoyed studying environmental law, which exemplifies how law is far-reaching and must seek to reconcile the different interests of those it affects’ (25 words).[/idea]

Good luck for your training contract applications!

[info_box title=”” image=”” animate=””]We wish you the best of luck in your training contract applications. If you’re still struggling and would like some guidance, you can send us a final draft of your application for a review here. Or, if you have any questions, head over to The Academy and we’d be happy to help. [/info_box]