New Threads

We find it's often helpful to connect students with others on their vacation scheme. That way you can get an early opportunity to get to know students and discuss the scheme. So feel free to post your scheme, dates (and location, if relevant) below.

Thank you to Varis from The Student Room for providing some excellent vacation scheme application tips. This year, Varis has secured vacation schemes at Clifford Chance, White & Case, Gibson Dunn, HSF, Travers Smith, Sidley Austin and Davis Polk.

"I think the application process is very much a 'game' in which it may be useful to think about each component of the application process and break it down to better prepare for it.

Writing the application - I think here, I cannot speak with certain authority in how one should write their application. There are many elements that make an application good, such as being well written, having no spell or grammatical mistakes, having a clear structure, being well researched and evidenced when you make a point, being substantive rather than superficial with points (don't recount quotable marketing material if you aren't able to contextualise it or personalise the point), etc.

I personally have found great success from my 'style' when writing very concisely. The pros of this style means that due to the lack of adjectives and conciseness of my writing, I am able to really get in a lot of information within the word count. However, the drawbacks of this style means that my vacation scheme applications are very dry to read and at times lacks a nice linking narrative or flow between each paragraph or point.

I also know other people who take a very personal, emotive and colorful writing approach and have found similarish success (Although I have found this to be in the minority of cases). Perhaps it is very much down to the firm and the graduate recruitment's preference. But to that, I can only say it would be quite difficult to swap from style to style just to optimise your vacation scheme application due to the fundamental differences each approach takes and the uncertainty in how much 'better' your application would become if you took X approach over Y. The application process is ultimately a very personal journey and it is imperative that the person applying is able to feel comfortable and confident in what they've done. It is much harder to copy someone else's style, get rejected despite that, and improve in light of that rejection.

For the Assessment Centres / Interviews - I think breaking down and researching what type of assessments you will face is crucial to success. I personally perform poorly under pressure and I make up for that weakness by providing myself as much comfort and certainty when going into an assessment centre. If you're going to Clifford Chance, for example, you can definitely do a lot to prepare yourself by practicing case studies, practicing answering competency questions and reading commercial news stories. For Sidley Austin, you perhaps should place more focus on understanding your application, the experiences you've had, and being able to articulate all the points that may flow out of your application and experiences so that you are not caught off guard.

Broadly speaking, there are therefore different categories of interviews and assessments. Commercial case study-centric interviews, competency focused interviews, strength based focus interviews, written interpretation exercises, legal case study-centric interviews, ethics and morality based interviews, application-focused interviews, etc. There are also styles, whether it is conversational, robotic and to the point, etc. Identifying which of these components will be relevant for your assessment centre and preparing accordingly will place you in the strongest position to remain calm, prepared and allow you to execute well.

In terms of things I wished I knew beforehand - I think the importance of a person's network should not be understated. Being able to find out specific details of a case study, or interview, or types of questions being asked for any component of the vacation scheme application process is greatly advantageous. Although this perhaps goes against the idea of being tested purely on your own individual merit, it is certainly a very useful thing that people do in practice. Thus, get out there and ask people who are better than you for help! I found myself struggling in my first year to secure vacation schemes and only until I was able to let people see all my strengths and weaknesses was I able to really get proper, tailored and useful advise.

Because the vacation scheme application process is so personal, people often like to lie or hide their weaknesses. Everyone wants to appear to be perfect candidate, even to people who have no bearing on our success. If you are not able to tell someone about your low grades, or personal and vulnerable areas, it is very hard to actually get meaningful help.

As for the rest of the tips and tricks, there is a plethora of 'good advice' out there. Although, insofar as it is actually taken to heart and applied, that is another story."

Thank you Varis!

(Reminder: These are posts I'm copying that Jaysen made in The Student Room)

Should I knock on doors?

Your supervisor/trainee buddy will generally give you work, so I wouldn't worry too much, unless (a) you've been told to, (b) you've run out of things to do, or (c) you're at Jones Day.

You’ll have a tour of the department you’re sitting in on the first day – that’s when I’d usually mention that I’d be happy to take on any work from others. You can also offer to take on work - if you have capacity - if lawyers come into the office.

It’s a bit strange because you’re on a scheme with many highly-qualified students, so I know it often feels like you need to go above and beyond everyone else. But I’d think of standing out this way – just focus on doing well in each activity you do. That means work really hard on every task you’re given; be friendly to every person you meet, from the IT staff to the secretaries to other students; and ask genuine questions during department talks. I think it’s better to get good reports from a smaller number of people you do interact with than spreading yourself thin or working endlessly to get the attention of senior lawyers.

(Reminder: These are posts I'm copying that Jaysen made in The Student Room)

Pretty hard.

There was one vacation scheme where a partner set me a huge task (at least I thought it was huge, but he didn’t seem to notice!), where I had to write a report about an ancient law for every country the firm had an office in. I was worried that this was going to take up too much time and I wouldn’t be able to work for other people (this was at a firm where that was important), so I ended up getting in early and working on the weekend. Although note, that was an unusual vac scheme and you shouldn't find yourself working on the weekend or late nights.

For another US firm, we had lots of assessments during the scheme, so I had to balance this with vacation scheme work. In that case, it was about being efficient and using my time wisely. We also had a client pitch and a TC interview on the last day, so I’d come home and work on those or stay late.

But it’s important to work hard on the right things i.e. the areas you think you need to work on. For me, that meant preparing questions, pushing myself in presentations or putting in the effort at a networking events.

It also means different things for different firms. For one of the other schemes, it would have looked bad if I stayed late. As I mentioned, I’d advise against working late unless you really have work to do (and can’t push it to the next day). Please don’t be the guy who used a sleeping pod on a scheme – especially when partners needed to use them!

Whilst you’re not always working hard in terms of actual tasks, vacation schemes are pretty intense. It’s a new environment where you have to be switched on all the time and I think it’s important to mentally prepare yourself for the two weeks - clear out as much of your schedule as you can and devote your time to it – after those two weeks, you can then relax.

Feel free to post your own thoughts on this question here too

(Reminder: These are posts I'm copying that Jaysen made in The Student Room)

The final interview will have some overlap with the vacation scheme interview – they’ll be looking to see your motivation/experience/commercial awareness. But now that you’ve been there for two weeks, it tends to focus more on how you found the scheme. So they’ll dig into your personality to see if you’re a good fit. It’s a bit tedious but I would suggest keeping a work log during the scheme and filling it with as much information as possible – who you worked with, who was the client, what you did, what you learned, how it fits into the bigger picture etc. Then when it comes to the interview, you’ll be able to use evidence to justify why you want to work at the firm. You’ll also be able to discuss what you did well and any areas you feel you could have done better – which tend to be popular questions post-vacation scheme.

We'll be posting a complete interview guide soon that runs through the most popular questions asked at interview.

(Reminder: These are posts I'm copying that Jaysen made in The Student Room)

How to do well on the scheme?

It’s going to be a little scary, but remember – the firm has decided that you’re a good candidate; that’s why you’re on the vacation scheme. Even then, you don’t have to get everything right; schemes tend to be about not shooting yourself in the foot rather than being the perfect candidate. That means handling situations appropriately (communicating if there’s an issue), conducting yourself professionally (especially on the socials) and being friendly (it’s very obvious when you’re trying to be competitive).

Vacation schemes are exhausting. Or at least, that was my experience. It’s not so much the tasks, but going from uni life to a day of work was harder than I thought. It’s a new environment where you have to be switched on all day, so it helps to mentally prepare for that. I’d suggest preparing as much as you can in advance e.g. your outfit, travel routes and times (don’t do what I did and turn up late to your first day), and track what you’re doing each day – that’ll help for your TC interview if it’s held on the last day of the scheme.

If you’re getting set quite a few tasks, you’ll have to practice managing expectations. It’s good to get into the habit of asking when the trainee/associate/partner needs the work by. If you don’t think you’ll get it done on time, the best thing you can do is speak to whoever set you the work – it’s much better to give them notice than rush a piece of work or miss a deadline completely. Likewise if someone tries to set you work when you’re at full capacity, briefly let them know what you’ve got to do at the moment and check whether you can do it after. Proofread your work, many times. Make sure there are no typos or obvious errors – print it and read it over if necessary. Otherwise, it looks sloppy.

There will be times when you’re not sure what to do in a task, that’s fine, just relay that back appropriately. Prepare informed questions and ask the person who set you the work if you can run through it with them (instead of just saying you’re lost). Or, if you get stuck and want to know if you’re on the right track, you can use your trainee buddy. Explain what work you’ve been given and don't be afraid to ask for advice, or whether the partner likes the work in a particular format – this is something we also do in practice, and it’s something your trainee/supervisor will respect.

When a trainee/associate/partner sets you a task, it often doesn’t make complete sense until you start it, so make good notes – that can be a lifesaver. It might also be helpful to re-write your notes once you’re back at your desk/after your conversation with the lawyer – that can help you to understand what’s going on and flag up any immediate issues which you might want to ask. It’s quite hard to balance listening and note taking, which for me, led to some of my notes not making sense at all!

I'd suggest updating a to-do list each morning and evening. I found this to be essential for keeping track of different workloads/assessments/meetings during the day. This can combine as a work log. Some firms have their own for you to fill out, but otherwise this is useful when it comes to the TC interview, so you can easily run through what you’ve been working on.

The final interview will have some overlap with the vacation scheme interview – they’ll be looking to see your motivation/experience/commercial awareness. But now that you’ve been there for two weeks, it tends to focus more on how you found the scheme. So they’ll dig into your personality to see if you’re a good fit. It’s a bit tedious but I would suggest keeping a work log during the scheme and filling it with as much information as possible – who you worked with, who was the client, what you did, what you learned, how it fits into the bigger picture etc. Then when it comes to the interview, you’ll be able to use evidence to justify why you want to work at the firm. You’ll also be able to discuss what you did well and any areas you feel you could have done better – which tend to be popular questions post-vacation scheme.

I came across a possible TC interview question "explain currency exchange rates" - would you mind providing a little guidance/help on how to answer this?

Anyone currently doing the LPC and how are you finding it?

Hey everyone,

It's an exciting day for us today because it's our two-week anniversary since we launched the website. (I know two weeks isn't something people normally celebrate but it feels like our first milestone!).

We also had an idea.

Rather than having sneaky updates that no-one knows about, we thought it would be a good idea to keep you guys updated on exactly what we're doing at the moment. So we'll be posting our updates on this page once or twice a week. Oh, and if there's anything you like or don't like anything please feel free to comment here or in our suggestions thread.

Thank-yous

I have a couple of thank-yous to give out first. A few of you have messaged me recently because you've received training contract offers. I won't tag you as I'm not sure if you want it to be public news but you know who you are. It's always a pleasure to hear when you do, so thank you - it makes my day to hear news like that! Please stick around too! In the near future, we'll be building resources for future trainees.

On that note, thank you to all our future trainees @Amy Hillier and current trainees @Nicole Shroff @Rayhaan V for taking the time to give out advice and answer questions. I know you all have busy schedules, which is why it has been so pleasing to see your thoughtful and detailed answers.

Now, onto the page:

What we're working on:

• Updating the law firm insights page. These are still being worked on so apologies for the clunky wording. Next on the list is Shearman & Sterling - thanks to @Denisa Olaru for the suggestion.
• Application reviews and mock interviews: I have been impressed with the applications I've seen over the last week, there are some very diverse candidates here!
• Getting funding/expanding! We're currently talking to an organisation that shares a similar mission (hence why I'm up at this time working on a business summary ).

Short-term coming soon:

• We have a few more lawyers who will be joining us soon to answer questions. One of them is an associate from Cooley. He works in the emerging companies practice group and directly advises founders and investors of start-ups and tech companies, from formation to exit (@Jonty - this seems right up your street!).
• A new guide to law firms where we break down how they function as a business, how they make money and how lawyers manage risk (thanks @GD1995 for the suggestion!).

Medium to long-term:

• I'll keep that a surprise for now but lots of exciting stuff!

Best,

J

Do you have any advice on how to do well for the following assessments for TC?

- research and drafting task;
- business simulation group exercise;
- partners interview involving preprepared presentation;

I really want to be as prepared as possible and your insight would really help!

What’s going on?

On 1 March 2018, Trump proposed a 25% tariff on steel and a 10% tariff on aluminium imports. It’s supposed to be aimed at China - for a long time, China has been exporting excess capacity at low prices. This has been undercutting the US steel and aluminium sector who can’t compete and causing job losses and factory closures.

Business

Damage to trade:

• Whilst the tariffs are supposed to be aimed at China, Canada and Mexico will be hit worse. They export a lot more to the US – 86% of Canada’s steel exports and 88% of Canada’s aluminium exports head to the country. To put this into context, China doesn't factor into the top 10 for the US. [Last night, Trump suggested he may exempt Canada and Mexico but it remains to be seen what he'll do].
• Since it was announced, global carmakers, big exporters like Boeing, US machinery (and others in construction), oil producers (steel is used for drilling), mining companies and US defence companies have seen a fall in their share prices. A rise in tariffs will increase the cost of raw materials and make it more expensive to export their goods. General Motors, for example, saw its shares fall 8.5%, the worst weekly fall in over two years.
• The tariffs are likely to cause a fall in investment by those affected. For example, Electrolux, Europe's largest home appliance maker has put a planned 250m investment on hold. The company had planned to invest in its US plant but is waiting to see the impact on the market and whether it could affect the competitiveness of US operations.
• Canada, Mexico and the EU have threatened retaliatory tariffs. If this becomes a trade war, the impact will be far-reaching. Foreign manufacturers will face rising costs and falling profits, they'll cut jobs and global growth will slow. This will also spread to other sectors and countries. For example, a Deloitte spokesperson suggested it would cost 20,000 jobs across construction, mining and retail in the Australian economy. Meanwhile, Germany has a lot of car manufacturers and exports a lot more than it imports – should Trump decide to tax cars from the EU it would hurt both US and foreign carmakers. Higher prices will then pass onto consumers and that can cut spending.

Interest rates:

• Higher tariffs push up inflation because it raises the cost of raw materials. If there’s a risk of inflation rising too much, that could encourage the Fed to raise interest rates faster than normal.
• On the other hand, if the Fed is concerned about a slowdown to the US economy, it could reduce the pace of an interest rate rise.
• Tariffs influenced Canada's decision to keep interest rates the same this week - one of the reasons being trade uncertainties.
• The European Central Bank (ECB) is also meeting today and it’s likely that the ECB president, Mario Draghi, will be questioned on the tariffs.

China-US relations:

• Trump has been targeting China for some time now. In January, America imposed duties on the import of solar cells. China responded by targeting US exports of sorghum (animal feed). If this escalates, trade between the two countries could be harmed.
• Trump has also been vocal about China’s alleged IP theft. He’s said in the past that a fine will be coming soon. So this could be part of a package of measures against the country.
• The US (and EU) have also become more concerned about Chinese takeovers of US companies. This came to a head very recently as the Committee on Foreign Investment in the United States (CFIUS) intervened in Broadcom’s bid to acquire chipmaker Qualcomm, The regulator cited national security concerns – that it could leave the US open for China to ‘expand its influence’ on the development of 5G technology. It looks like Broadcom want to push ahead but this may stop the deal. Had this gone ahead it would have been the largest-ever debt financing package.

Protectionism:

• The departure of Trump's economic adviser, Gary Cohn has made many worry about a change in policy direction.
• It’s worrying that Trump is willing to use national security to justify his protectionist policies, especially when it’s hitting the US’s closest allies. That could lead other countries to use national security to justify import restrictions.
• NAFTA is currently being re-negotiated. That’s an agreement of free trade between Canada, Mexico and the US. Trump has linked the issue of exempting Canada and Mexico from tariffs on these negotiations. If he pulls out of NAFTA, tariffs will be raised between these countries. And this wouldn't be unprecedented because he has pulled out of TPP, which would have created the largest economic bloc in the world. Many companies have organised much of their business around NAFTA including supply chains and trading relationships. If this ends, the effects will ripple across many industries.

Conclusions

I think Trump proposed tariffs in this way to help his negotiations with NAFTA. But it'll probably prompt China to act faster - so Trump has effectively killed many birds with one stone. He also gets to show to his voters that he’s fighting for US industries and show the world he's tough on trade. If Trump really wanted to target China he could have easily exempted Canada and Mexico (that’s what happened in 2002 when Bush tried to raise tariffs). I’m sure he’ll exempt them soon, but for now, it’s a nice play.

The impact on the market has actually been quite muted despite the headlines. The dollar fell but rebounded quickly and US stocks haven’t been hit that much. It suggests that (1) the market thinks the impact is limited (that Trump will exempt Mexico and Canada or that US policies will offset the impact), (2) the market doesn’t think Trump will actually do it, or (3) the market is simply less responsive to Trump (it’s been rallying despite a number of scandals in the White House).

I don’t think we’ll see a trade war, but I imagine we’ll see more protectionist measures from the US. That won’t be great for world trade, but there is some rebalancing that needs to be done in the market.

I'll send over the impact on law firms shortly .

Hey everyone

To help the commercial awareness side of things, we had an idea. Each week we'll be taking in suggestions for a commercial awareness article. A maximum of 4 topics will get put into a poll which you can then vote on. We'll then write an article on the highest voted topic.

To kick us off, please post your suggestions in this thread. Tomorrow evening we will decide which topics to put in a poll.

Hey all,

I just spoke to a student (thanks @Nick) and wanted to extend this offer to the rest of you. I'll be holding office hours each Wednesday from 8-9pm. If you'd like advice on your applications, interviews or vacation schemes, you can schedule a call at 15-minute call at one of the following time slots:

• 20:00
• 20:15
• 20:30
• 20:45

If you'd like to book a slot, please send me a private message with your preferred time, telephone number and any details that you think would be relevant.

Best,

Jaysen

Hi All,

So I have picked the above topic for the ‘what issue have you been following in the press and how will it affect us’ (the firm in question has a strong reputation representing pharma companies hence the link between M&A and the pharma industry) and I am having difficulties on how to start dividing my answer in a way that 1)answers the questions and 2)highlights the problems,solutions and my personal opinion to my proposed topic. I have started it off with something along the lines of...


Following my time shadowing the M&A and tax department at X Y Z firm, the impact of US tax reform on the pharmaceutical industry has caught my interest. This tax reform would significantly impact (list out the problems) and then from here onwards I don’t know how to proceed with my answer.

Any advice?

Thanks

Hi All,

For those of you concerned about whether applying for a straight TC is really worth it, I came across this page which notes the VS conversion rates for different firms

https://www.allaboutlaw.co.uk/law-c...ation-schemes-are-they-really-half-the-battle

I hope this helps!

Hey guys, I'm still finishing up the first of the Law Insights page (I'm hoping to finish it tomorrow). In the meantime, I'll post a few short articles I did on popular commercial-awareness interview questions. This one is about how a company can raise money. I go into more detail in the M&A guide, but I appreciate this might be a little more practical.

If a company wants to raise money, there are two broad options: equity or debt.

Equity

The owners of a company are called shareholders. They invest money in a company in return for shares – like pieces of ownership. A company can have one share owned by one shareholder. Larger companies can have millions of shares across thousands of shareholders.

A company must run big decisions by its shareholders in a vote. For most companies, one share gives you one vote. So the more shares you have, the more influence you have over a company.

Equity finance means selling more shares in a company for capital. If you’ve watched Dragons Den, that’s exactly what people are doing on there: they ask for say £100,000, in return for a 20% stake in their business. Public companies do this on a much larger scale, in what’s known as an Initial Public Offering or IPO.

Debt

I'll concentrate on the two big ways of raising finance through debt: a loan or a bond.

Loans

This is pretty simple, a company borrows a fixed sum, usually from a bank. It pays the bank back in instalments, with interest, over an agreed length of time.

Bonds

Think of these as a loan split up into many chunks but instead of a bank, there's a group of investors.

A company issues bonds to investors in return for money. Investors get the right to receive interest payments at regular intervals during the life of the bond. At a certain date, the bond ‘matures’ and the company pays the original sum back to investors.

Equity v debt

Generally speaking, if it’s a company with a healthy cash-flow and profits, debt is cheaper than equity; selling a stake in a business is a significant long-term cost. If a company is small and at risk of defaulting on payments, equity finance is much safer. You can also check out the comparison attached.

Is anyone else a big fan of podcasts? I'm a bit obsessive over them

Some of my current favourites:

• Hardcore history by Dan Harris
• How I built this by NPR
• Tim Ferris
• Waking up by Sam Harris
• Startup school radio by Y Combinator (you can see I like startup stuff!)
• Joe Rogan

And then when I'm feeling like I should be studying:

• Planet Money by NPR
• Freakonomics radio
• Economist/FT
• Bloomberg Surveillance
• BBC World Business Report

Hey guys!

A quick explanation of what's going on on the law insights section. We were actually going to postpone our website launch until we finished this page, but it turned out to be a much bigger task than we imagined, hence the coming soon cover at the moment.

Here's the thought process behind the law insights page:

• The most common issue I see is that students find it hard to tell the difference between law firms. I don't blame you guys, it is really difficult and that's an odd thing - I don't think you should be choosing your firms without knowing what to expect.
• In other words, we'd rather you guys send good applications based on your genuine understanding of different law firms, rather than forcing artificial answers that sound good.
• So, we'll be sharing our thoughts on what makes each law firm different. We'll be comparing practice area strengths, geographical spread, training and culture, innovation and technology, starting with the magic circle.
• Hopefully, that'll also help your applications and interviews, so you can really drill down why you're applying to different law firms and tailor your answers.
• Finally, we've been collecting interview experiences from future trainees and trainees at different law firms. So you'll also find that by each firm. The idea isn't to tell you what the interview questions are (we'll block that out), but to give you a better idea of what to expect. That way, we hope you'll feel a little less nervous and a little more prepared, so you can excel at interviews.

I'm hoping to get the draft of the first firm done either tonight or tomorrow. I'll be posting the law firms up one by one, so keep an eye on the page! And of course, if you have any requests or comments, please let me know.

Hey everyone,

I'll be updating you guys on these forums so you can see what we're working on a the moment. A few of you have made suggestions already, and that's been super helpful.

I'd like to stress that the purpose of this site is to help you guys get into the top corporate law firms. We've got a nice network of lawyers to help out and lots of advice to share, but that's no good if we're not doing the right things. So, if there's anything you think we could be doing better or any features you'd like to see, please post it below. We'll chat with you and see what we can do .

Best,
Nicole

Hi everyone . This will be a guide at some point, but until then I thought I'd post Jaysen's article here. It was written some time ago (shortly after the referendum), which we then sent out on the mailing list. So keep an eye out for part 2, which will be more updated.
"Merry Christmas All,


This popular interview question is difficult. There's plenty of information on the topic and it can be easy to spend hours getting bogged down in irrelevant detail. It tests your ability to form a coherent and structured answer and you'll be expected to have opinions and back these up with evidence. The interviewer will challenge your assertions or ask you to be your own devil's advocate.

This article is intended to be a high-level overview of some of the most important consequences of Brexit for law firms. This is the first of two parts; it was written early 2017 to assess the progressive impact of the referendum. Part 2 will compare how things have developed since and what we can expect for 2018.

The loss of passporting rights


Office relocations

Whilst many law firms have offices across the EU, a client wishing to transfer its headquarters to Frankfurt, Paris or Dublin may be unhappy dealing with a satellite office. Law firms may struggle to pitch themselves as a one-stop-shop to new firms or retain existing clients unless they can develop their presence in European financial districts. Some law firms, including DLA Piper and Pinsent Masons have already made plans to position offices in Ireland to practice EU and UK law, and this is likely to be a key business strategy for law firms over the next five years.

The uncertainty of Brexit negotiations in the short term was initially predicted to decrease the volume, value and scale of transactions that commercial law firms undertake, particularly in departments which tend to thrive in a bull market, including M&A, private equity and capital markets. The volatility of the market conditions make the UK an unattractive destination for companies to raise funding. After the vote, Pure Gym Group, Misys, Biffa and O2 either deferred or cancelled their proposed IPOs. The loss of the ability to passport prospectuses may continue to drive down IPO activity if there is no mutual recognition or the cost of dual listings increase. The total value of UK M&A activity is predicted to fall from $340bn in 2016 to $125bn in 2017 due to Brexit uncertainty and this fall in transactional work may decrease law firm revenue.

What can law firms do?

Commercial law firms are likely to increase investment in countercyclical practice areas to offset a drop in commercial activity. This includes bolstering their restructuring and insolvency practices or introducing new regulatory departments. Those law firms which are especially reliant on the UK and EU may look to merge or invest in the US or emerging growth markets in order to diversify their risk. In Legal Week's survey, 69% of partners expected revenues for the top 50 firms to fall over the next five years and 82% predicted law firm redundancies in the next two.

Law firms are likely to invest in a number of measures to develop their competitive advantage or cut their own costs in light of a fall in revenue. Law firms may also develop immigration or employment teams to reassure their existing European talent and clients against the threat of work permits and visa restrictions post-Brexit. For example, Clifford Chance and Linklaters have already begun to hire international trade law experts to advise clients

Post-Brexit trade: A positive future

If a new relationship can be forged with states outside Europe within the next two years, law firms will see a surge in previously deferred transactional activity from companies. The UK is likely to secure novel trade deals with new partners, with a rise in M&A, projects and infrastructure work across Asia. This may align with a growth in expansion activity by mid-sized firms and the recent trend of transatlantic mergers for others in order to have the scale or expertise to deal with a new post-Brexit economy.

In any case, London's low language and cultural barriers, skilled labour force and the prevalence of English law will continue to make it an attractive platform for multinational corporations to do business within the EU

That's all for now. Stay tuned for Part 2 where we re-assess these Brexit developments and look ahead to 2018.

All the best,

Jaysen"

Hey guys,

This is a very popular interview question this year so I’ve decided to do a mini-guide. I know I’ve briefly touched on these areas in other posts, but hopefully, this’ll help you to connect the dots further. I hope to release part 2 tomorrow.

Who raises interest rates?

That’s the central bank. Almost every country in the world has one. I’ll focus on two – the Bank of England in the UK and the Federal Reserve in the US. Right now, when you see the press talking about the ‘Fed’, that’s short for the Federal Reserve.

How do central banks raise interest rates?

Central banks don’t actually control the interest rate. They influence it. They do this by deciding how much money there should be in the economy. The amount of money in circulation at a given time is called the money supply. If the money supply increases, it can stimulate lending and growth, but it can also cause inflation to rise – we’ll get to that below.

If central banks want to raise the interest rate, they will reduce the money supply. There are a few ways they can do this. One way is to increase the discount rate (the base rate in the UK). The discount rate is the interest rate at which a bank can borrow from the central bank if they want a loan. If the central bank raises the discount rate, the banks tend to respond by raising the interest rates on their loans.

What’s inflation got to do with this?

In 1971, a packet of crisps cost 5p, a cinema ticket cost 30p and a house less than £6000. Why is everything more expensive? You can (generally) thank inflation for that. Inflation is where the price of goods and services rise over time.

What causes inflation?

Inflation can be caused by rising business costs. If the cost of raw materials rise, a business may increase their prices to maintain their profit margins. The central bank can also cause inflation if it prints too much money relative to the productivity in the economy. When there’s more money chasing a limited amount of goods and services, the excessive demand can push prices up.

That’s what happened to Venezuela. A quick background – Venezuela’s economy is almost entirely dependent on exporting oil. So when oil prices crashed in 2014, the government couldn’t fund its expenses. Instead of cutting its social programmes or seeking help, the government decided to print money. The thing is you can’t just print money because the value of the currency will fall. Which it did, a lot. This was a problem, not least because the country relies on imports for most of its food, which it pays for in US dollars. But even as the currency fell, the government continued to print money. To give you an idea of how bad things have become - the International Monetary Fund predicted inflation will reach 13,000 by the end of 2018.

Why do we have inflation?

You might have seen that the Bank of England and the Fed targets an inflation rate of 2%. A low and stable rate of inflation isn’t necessarily a bad thing. It causes people to spend or invest because if they don’t, their money will be worth less in the future. The central banks can also control inflation if it rises too quickly.

The opposite is true if inflation falls below zero. That’s deflation. It’s where prices fall over time. Deflation causes people to spend and invest less, because their money is worth more tomorrow than it is today. If people stop spending, prices fall even more, causing a deflationary spiral.

You can look into Japan for a recent example of this. They’ve been battling with deflation for almost 20 years. When prices start to fall, it’s hard for the central bank to fix it using interest rates. Japan did try - they introduced negative interest rates in 2016, which penalises banks for holding cash. The country also printed money on a massive scale (also known as quantitative easing). That may have worked – it’s hard to say, but the economy is almost out of deflation for good. Unfortunately, Japan also has the highest debt-to-GDP ratio in the world.

How do interest rates impact exchange rates?

Suppose the interest rate in the UK and the US is 2%. Fast forward a few months, let’s imagine the Fed raises the interest rate to 3%. Now investors can get a higher rate of return by investing in US government bonds. So, all things being equal, investors sell sterling so they can buy dollars. As there’s high demand for the dollar, its value increases.

So what?

The short answer is that it’s good for imports, bad for exports.

The longer answer: when the value of the dollar goes up, it’s cheaper for people in the US to buy goods abroad, so imports tend to rise. That’s good for US companies who import products or raw materials from overseas. It can also help foreign companies. For example, if a UK company does business in the US and generates income in dollars, its earnings will increase when it’s converted into dollars. This could lead to more foreign companies investing in the US.

But a stronger dollar affects companies which export US goods. They tend to see a fall in sales because their goods become more expensive. US multinationals with overseas businesses are also hit. A stronger dollar means companies will record lower income in its books when it’s translated into dollars.

What about the stock market?

It tends to fall. Investors worry interest rates are going to increase. If interest rates increase, it can be more expensive to borrow, which can slow down a company’s growth. Likewise, if interest rates increase, bonds become more attractive because investors will get a better return (more interest payments). So many investors sell shares to invest in bonds.

There’s also a few other reasons. Janet Yellen just left as the chairman of the Fed and her replacement, Jerome Powell was only recently sworn in. A new chairman causes uncertainty for investors, especially when the central bank has been lenient with low interest rates for so long. He’s also the first non-economist in almost 40 years.

Why are they raising interest rates this time?

First, it’s important to remember that interest rates have been really low for a long time. This was in order to stimulate growth after the financial crash.

Now the US and the UK are more than eight years into their recovery. The US economy is doing well. It’s seen wage growth and low unemployment rates. When the economy is growing and wages are growing, the Fed thinks the economy can take the rise in interest rates.

Why are people worried?

There are fears that the US economy can’t sustain an increase in interest rates. Some say it isn’t growing fast enough. Others point to the number of companies with lots of debt. Investors don’t like uncertainty either. There was a sell-off in the bond market as investors fear being locked into fixed returns.

The UK tends to follow the US in raising interest rates. This was also supported by unemployment falling to a 42 year low in December 2017. However, we’ve got Brexit to deal with, so it makes less sense to do so when the markets are already troubled.

Then there are the emerging markets. When the Fed lowered interest rates in 2008, it became cheaper to borrow in dollars and many emerging markets took out loans to build new infrastructure and expand their economies. Borrowers in emerging markets will be hurt because they have plenty of dollar-denominated debt. If interest rates rise, investors are also likely to flock to the US and sell emerging market currencies. So these markets tend to rattle at signs of a rise in interest rates.

Part 2 to follow!

Based off the interest from the other post, I thought it’d be good to begin writing up some information on this area. This is a project of passion rather than expertise, so I’d recommend, if anything does interest you, to read around the subject yourself.

This post is meant merely as a rough introduction to the world of LawTech, with more specific posts to come in the future. Apologies for it being a bit long but I thought it'd be better to have these simple introductory paragraphs in one place.

What is LawTech?

Often when the term LawTech (or LegalTech) is used it’s followed up by liberal use of buzzwords such as AI or Machine Learning. LawTech, however, doesn’t necessarily mean androids walking to client offices and interfacing with their IT system. A lot of the changes taking place right now are relatively simple automations to digitise processes that previously would have required a lot of manual labour to complete to make it easier and quicker to complete tasks.

It remains difficult to predict what is going to happen in the legal sector. Currently we’re seeing the automation of tasks within it but have yet to experience the innovations that will be the driving force behind the major changes. It is this automation v innovation that is key as the latter will be the one that truly changes the legal sector.

An easy example of the difference between the two being seen in communication. Automation of a process to make it easier to communicate between parties can be seen with mail v e-mail. Clearly, the latter has taken over as a far more efficient and faster communication process but it isn’t innovation in itself, despite being an innovative automation. Innovation can be seen in the social media networks which have completely changed how people communicate. Snapchat, Facebook, Instagram, Twitter etc are revolutionising how we stay in touch with people and how we make new connections with people.

It’s that level of innovation that the legal world is ripe for, but it isn’t here yet, so for now we can talk about what is here and speculate on what may come in the hope that the spark will grow from that.

LawTech is coming

Lawyers are not, by their nature, a technologically advanced bunch. A sector proud of it’s traditions combined with a conservative professional who looks to minimise risks doesn’t often to lead to tech innovation and it isn’t unfair to suggest the legal sector is behind the curve on modern day technology.

You don’t have to try very hard to hear stories from other professions about how, when they went to a meeting with their iPad or Laptop containing all they need, they were met by a lawyer with reams of printed documents.

A further anecdote can be heard from Richard Susskind (an important academic in this area) about how in 1996 The Law Society fundamentally rejected the idea of e-mail taking over from mail as the primary source of communication with clients. They did so on the grounds of client confidentiality – they couldn’t see how it could be possible to ensure sensitive documents could remain secure. Clearly with the bias of hindsight, we can look back to 22 years ago with amusement over this, but I also find it quite helpful to reflect on this as an example of the importance of keeping an open mind on technology within the profession.

There is no denying an overhaul is currently taking place worldwide. Richard Susskind, Bruce MacEwen, Steven Harper, Daniel Susskind, Mitch Kowalski, George Beaton and Jordan Furlong are among the notable authors and academics who predict the law sector will change more over the next two decades than the previous two centuries. Already we’ve seen shifts away from the traditional law firms with companies such as AA and BT looking to move into providing everyday legal services and Co-Op bank looking to offer legal services for customers from its bank branches. Law firms have created freelancing arms such as ‘Vario’ from Pinsent Mason or ‘Lawyers on Demand’ from Berwin Leighton Partners and MDPs (e.g. PwC) have begun to offer legal services alongside complementary ones such as accountancy or IT consultancy. The legal sector is changing rapidly and technology is going to magnify this.

Where are the needs for LawTech?

The two major areas of LawTech both revolve around the same central theme – saving money.

The first area, the commercial area, is focused on developing and selling software to law firms that will enable them to increase efficiency and productivity to react to an ever-increasing client driven pressure to perform at the lowest price possible.

Technology in this area includes systems such as technology-aided review (e.g. intelligent search analytics that allow for complex and thorough reviews of large sets of documents to select the most relevant) and smart contracts/document creators. Many companies (start-ups and established) are involved in developing competing products in this area with examples such as ThoughtRiver, RAVN and Luminance.

Law firms are also actively getting involved at early stages by investing money into inhouse technology focused research and development programs e.g. Allen & Overy’s Fuse, Denton’s NextLaw or Mishcon de Reya’s Labs. The latter works by welcoming applications from start-ups before selecting the most interesting, inviting them inhouse to work for months with the department that matches their idea most closely before finally having a presentation day to showcase the finished product. MDR then choose which start-ups to invest in.

The second major area of LawTech is focused on access to justice. Whilst I’m sure some of these companies would also look to commercially sell their products to law firms, they’re predominantly aimed at trying to ease the issues of legal aid cuts and spiralling legal costs. High expense isn’t a new thing for the law sector, Lord Bingham's favourite quote on the subject is from the 1650s; “the law is beyond remedy. It costs £10 to recover £5”. It is, however, a problem that may be addressed with better functioning technology.

Legal services such as LegalZoom and Rocket Lawyer offer commercial legal products at lower prices – contract automation tools can be accessed for low prices (either one-offs or subscriptions) and easy to use search functions allow individuals and small businesses (their primary customers) to access lawyers on fixed-rate or lower fees. The market is huge in this area; around 83% of small businesses (less than 50 employees) state they’ve had a legal problem and sought solutions to it outside of the legal industry due to the high cost otherwise involved. Evidently, figures such as this show large swathes of potential work previously going missed can now start to be accessed by companies such as those mentioned above.

Other tech solutions to Access to Justice problems have been provided in the other forms:

CrowdJustice is a simple crowdfunding website to raise money for litigation that doesn’t fall under Legal Aid.

DoNotPay, a rules-based chatbot, helps people to challenge parking tickets or helps refugees with asylum applications.

Elexirr (previously known as Lawbot), a company focused around chatbots that assist in other areas (including case prediction).

How does it affect you?

I mentioned this elsewhere recently but realistically, the partners and senior lawyers at the firms are not going to be the ones embracing this technology. They’ll benefit through you, the younger lawyers of the firms. You’ll be the ones learning how to use the technology and becoming well-versed in it now and embracing the many free events ongoing around London (and other locations) to demo software will only help you in the long run.

From a student’s point of view, it’ll only be of help to know as much as possible about the firm you’re applying to. To be able to talk about Linklaters’ investment in LawTech (such as long-standing partnerships with RAVN, trials of Kira Systems, Leverton and working with Neota Logic to mention but a few areas of investment) in any depth will be of great assistance in helping your application/interview with them to stand out and it’d be another avenue through which you can express your interest.

The last major reason for you to get into LawTech as a topic and start thinking about it is you’re where its future lies. As I mentioned before, it’s the innovation that will truly change the industry, not the automation. Before the ATM was created, customers could access their money from banks during opening hours. Now it’s a 24 hour service – that’s an example of an industry changing innovation.

Currently, we’re seeing a lot of great people creating a lot of exciting and interesting technology but it is an industry very much in its infancy. Companies are focusing on one strong idea and developing it as well as they can but the vast majority of it appears to be innovative automation. The more minds that begin thinking of possible future solutions and changes, the more likely a new and exciting legal sector will develop from it.

Tomorrow I'm going to start creating a thread surrounding current resources available for you to use to start to brush up on this area (e.g. books, websites, podcasts etc) and then in the future I'm going to begin writing up a guide to some of the tech out there. Let me know if there are any particular areas you might want to read about and I can cater the posts in that direction.

Hi there - I have a final TC interview at Ashurst next week. I'm feeling quite daunted as its 3.5 hours plus and I'm worried about very technical banking/finance or sector focused questions, particularly in the partner interview. The interview structure is:

1. Written case study in the form of a business report (how should I structure this?!)
2. HR Interview
3. Partner Interview

If anyone has any tips I would really appreciate it!

Silly me completely forgot yesterday was the last day of February. I'll keep all the March posts in this thread.

(01/03/2018)

Headlines

1. The European Commission published guidelines yesterday that will require social media sites to remove illegal content from terrorism to copyright infringement from their sites. In relation to the terrorist content they will have just one hour to remove it. [Great but I don't know how the likes of FB would be able to remove something like that within an hour!]
2. The Bank of England's Term Funding Scheme ended, which means smaller banks now have to compete harder for deposits. This was a scheme where banks could borrow at a cheaper rate provided they increased lending.
3. Spotify is going to be floating on the market in an unusual manner. It's going to live-stream its investor pitch(!). Morgan Stanley, Goldman Sachs and Allen & Co are advising and it's valued at $19.7bn. In comparison Snapchat was valued at $24 billion.

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