#38 The Legal Profession This Week - The Imminent Counter-cyclical Boom; Legal Technology Roles​

By Dheepa​

The Imminent Counter-cyclical Boom

While the surge in M&A work from the past year continues, many law firm leaders are preparing for a rise in counter-cyclical work. Counter-cyclical work refers to areas that are inversely correlated to the economy. For law firms, these are areas like insolvency, restructuring and litigation that are most profitable when the wider economic environment is unfavourable.

Rising inflation rates across the US, UK and other economic powerhouses is the key reason for the anticipated increase in workload across these areas. US inflation rates rose to a 40-year high in November while UK inflation rates are expected to rise over 5% in the coming months. To curb this, both countries have shifted to a more aggressive withdrawal of the pandemic support measures introduced in 2020. This includes a much faster end to bond buyback programmes in the US and a rise in UK interest rates for the first time in three years. For law firm clients, the combination of these measures means an overall reduction in cash liquidity and more difficulty in fulfilling their debt obligations. This will lead to a heightened demand for advice on restructuring existing debt and create room for potential insolvency filings.

Litigation and disputes work is also expected to rise later this year. In a statement to Law.com, Baker McKenzie’s managing partner foresees current developments mirroring the 2008 financial crisis which saw many large scale debt and fraud claims.

Legal Technology Roles - A Law Graduates New Frontier?

Last week, legal influencer Eve Cornwell announced her departure from commercial law. On LinkedIn, she explained that she is pivoting into a product manager role in a legal tech startup, CreateIQ, backed by her former employer Linklaters.

Her announcement poses interesting new possibilities for law firms. Some legal influencers build their online presence based on the difficulty of securing a junior role in some of the world’s best law firms. Their content, which ranges from application tips to day in the life videos undeniably introduces a wider talent pool to a career in corporate law. Law firms also benefit; this is cost-free marketing in a highly competitive graduate recruitment market. Besides Linklaters, firms like Clifford Chance and Baker McKenzie have also benefited from the content produced by legal influencers among their own ranks (Financial Times).

Does Eve’s pivot into the legal tech sphere break the allure of corporate law? Arguably not. Her new role will still benefit firms that are pushing investmentinto legal technology, services and operations. 2021 alone saw three firms introduce brand new legal operations graduate schemes with clear opportunities for progression into managerial roles. However, with the possibility of Eve sharing life in her new career on social media, perhaps more law graduates may seriously start to consider the increasingly available non-traditional opportunities within BigLaw.

‘Business as usual’ – the notable deals and cases which went ahead this week:

CMS is advising M&C Saatchi on a takeover bid from investment vehicle AdvancedAdvT. According to The Lawyer, the CMS corporate team has extensive experience advising on takeover bids of this kind, including experience advising British software company Blue Prism on a takeover bidding war last year.

Clifford Chance acted for Natwest on a money laundering charge brought by the Financial Conduct Authority (FCA). The bank has been forced to pay £4.3m for the costs incurred by the FCA in addition to a £265m fine. The judgement is the FCA’s first successful criminal conviction of a bank for breaching money laundering regulations.


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