Call for commercial awareness topics!

[Jake Rickman]

Hi Jake, had you had any thoughts on the decision of HMG to grant new oil licences in the North Sea?

Personally I feel that campaign groups will try and find a way to challenge the grant of the licences, particularly with regards to any impact assessments (downstream affects of projects could potentially be included depending on the outcome of the case before the UKSC). I also think the financing of projects could potentially be difficult as lenders put pressure on to make greener choices, as well as investor pressure on oil majors to invest in renewables.

However a future labour gov may be in trouble if it tried to cancel licences granted, potentially facing claims under investment law.

For law firms I think they would be complicated projects to work on, the above would have to be factored into advice to potential developers. It would be high billing work due to the complexity involved and potential challenge, but potentially damaging to the reputation of a firm who took on the work, particularly firms who have been pushing ‘green’ credentials

Hey Alex,

I think you raise some good points.

I suspect you're right that environmental campaign groups will see how they can challenge the government's decision. However, it is not readily apparent to me on what grounds they may do so... Are there express restrictions on the ability of the government to permit further hydrocarbon exploration and exploitation in the North Sea? I would be surprised if that's the case. (Though I must confess I do not know that legal specifics surrounding the 2030 and 2050 climate targets...). I suppose that the threat of future challenges as to the authority of the government to grant further licenses would be material risk to businesses that obtain these licenses and commence exploration and extraction activities.

I personally see this first and foremost as a political issue: the Conservatives have evidently found a new wedge issue — climate and environmental protection issues — and seem to be latching onto it as a way to bolster their poll standings. It is hard to read these developments outside of their narrow victory in Uxbridge, which the talking heads have attributed to voters there rejecting London's ULEZ expansion. Likewise, in the past week, the Tories have also diluted carbon pricing mechanism designed to make it expensive to pollute in the UK.

This runs contrary to the consensus that aggressive action is necessary to mitigate the severe effects of climate change, but from a purely commercial and financial perspective, it is hard to argue with the fact that short-term demand for oil and gas persists: we saw what happened when we emerged from the lockdowns and the supply chains could not facilitate the surging demand for oil and gas. This sent prices up, which Russia's invasion of Ukraine made a lot worse. (The PM I think has couched these new licenses in the context of "energy security", i.e., minimising reliance on Russian gas, which does have some merit).

So to your point about Labour trying to unwind these anti-Green initiatives, I think they would face political and commercial difficulties in doing so. I am not sure what you mean by "facing claims under investment law", but there probably would be a legal argument or two to challenge any attempt.

I agree with your point that there is lender and investor pressure on the majors arising from environmental concerns, which is influencing market decisions and outcomes at least to some degree. At the same time, as I have alluded to in other posts and articles, many of these same lenders and investors have a hard time staying away from oil & gas when the cycle swings in their favour...

Always a good thing to consider how this impacts on law firms. I find it helpful to think about which practice groups a development like this engages. In this case, there are loads. I must say that I have not seen much in the way of firms shying away from oil & gas work due to sustained criticism. But maybe that will change or be different in this particular case?

 

[ADKM]

Your points raise some philosophical and existential questions. Assuming you intend to workshop this for an application/interview question, I would suggest distilling these ideas down, because it is quite a lot of content to cover in ~250 words or a couple of minutes.

A few thoughts:

• While the connection between the existential threat of AI which Nolan discusses in the FT article and the commercial world is an interesting point of conversation, I am not sure that it has much relevance in an application/interview setting. That is, it feels a little academic and abstract.
  
  
• I also would argue that only a small number of commercial law firm practice groups will have any hand in drafting whatever future laws emerge to govern AI, so the relevance for commercial law seems a bit spurious. They are more likely to advise regulators and commercial parties on the effects of new laws, rather than drafting them outright.
  
  
• As far as substance to discuss in an interview, I am not sure I follow you when you draw a connection between the regulations governing AI (or the lack of regulation) and the volume of M&A/PE transactions. However, this is an interesting point and one that I have not seen covered anywhere else. Can you explain a bit more what you mean with this? If your point is that there will be loads of new businesses that offer AI solutions, which will translate to more deals as they get purchased by larger companies, I would probably agree. This seems like a good point to develop further.

As a bit of feedback, my strategy for discussing commercial news in an interview setting is to keep things as simple as possible by focusing on only a couple of themes. Your points here cover loads of different commercial themes: AI, deal volumes, regulation, the role of private practice law firms in drafting legislation... You simply will not have enough time in an interview or word count in an application question to make a strong conclusion that this is tangibly relevant to law firms. I would really just focus on a single aspect of AI. I think the most fruitful one would be its role in growing transaction volumes.

--

Speaking more conversationally, I think I agree with Nolan that AI does raise serious existential concerns. However, in my opinion, the problem with new technology is that it is hard to cut through the noise. This raises another point, which is that I personally find that the talk around AI to be overly-sensational (similar to how all the buzz around crypto and blockchain was last year before the crypto market collapsed.

This is my opinion, but all the talk about how "disruptive" AI is poised to be really seems like speculation. It may be the case that it puts everyone out of a job, but I think the more likely outcome is that over the next 10-15 years, it modulates how office workers do their jobs, similar to how personal computing has changed the business world over the past few decades. (Though I recognise the importance of law firms investing in AI capabilities because if they do not, they risk being left behind).

Hi Jake. Thanks for your opinion. They offer so much more insight. Also, thank you for your interview tips, I shall keep this in mind for the future.

I do agree with what you have to say. In fact, the point you picked up about AI affecting deal volumes is one that caught me eye particularly when there have been interesting developments in this realm. For example, Nvidia agreeing to become an anchor investor for Arm is a news I recently came across. In one of my previous applications, I mentioned Nvidia’s growth when it crossed $1 trillion in market cap. It indicates that market players/potential investors can enter into collaborations with Nvidia to understand more about Generative AI chips (apparently Nvidia is the only company that manufactures these chips, correct me if I’m wrong though!). So I can see the link between this news and AI deal volumes (might not be substantial, but a possibility nonetheless) which means work for M&A/PE lawyers.

Apologies if my wording about the regulation aspect was unclear but I agree with what you said about lawyers advising on the regulatory aspect of AI rather than outrightly drafting them. FYI, the FTC has pulled up OpenAI regarding the ambiguity of information coming out of ChatGPT, so your argument makes much more sense.

The IMF have said the global economic outlook looks slightly better (I’m presuming BoE, Fed & ECB) may make few more interest rate hikes in the coming weeks before we can see a substantial improvement. Regardless, this slight positive outlook, UK inflation going down by 7.9% and the news of PacWest and Banc of California merging along with Google exceeding expectations to hit top market cap makes the situation so much more interesting. With global M&A deal making at an all time low, these pieces tell me that borrowing costs could potentially lower in the foreseeable future increasing consumer spending. In between all this, if AI can be regulated it would make it very interesting from commercial law’s viewpoint.

Therefore, my question to you is how do you expect these pieces to affect the future? Do you think the market is headed for an uptick or are these temporary signs of growth simply just noise? Would love to know your thoughts on this!

 

[AlexJ]

Hey Alex,

I think you raise some good points.

I suspect you're right that environmental campaign groups will see how they can challenge the government's decision. However, it is not readily apparent to me on what grounds they may do so... Are there express restrictions on the ability of the government to permit further hydrocarbon exploration and exploitation in the North Sea? I would be surprised if that's the case. (Though I must confess I do not know that legal specifics surrounding the 2030 and 2050 climate targets...). I suppose that the threat of future challenges as to the authority of the government to grant further licenses would be material risk to businesses that obtain these licenses and commence exploration and extraction activities.

I personally see this first and foremost as a political issue: the Conservatives have evidently found a new wedge issue — climate and environmental protection issues — and seem to be latching onto it as a way to bolster their poll standings. It is hard to read these developments outside of their narrow victory in Uxbridge, which the talking heads have attributed to voters there rejecting London's ULEZ expansion. Likewise, in the past week, the Tories have also diluted carbon pricing mechanism designed to make it expensive to pollute in the UK.

This runs contrary to the consensus that aggressive action is necessary to mitigate the severe effects of climate change, but from a purely commercial and financial perspective, it is hard to argue with the fact that short-term demand for oil and gas persists: we saw what happened when we emerged from the lockdowns and the supply chains could not facilitate the surging demand for oil and gas. This sent prices up, which Russia's invasion of Ukraine made a lot worse. (The PM I think has couched these new licenses in the context of "energy security", i.e., minimising reliance on Russian gas, which does have some merit).

So to your point about Labour trying to unwind these anti-Green initiatives, I think they would face political and commercial difficulties in doing so. I am not sure what you mean by "facing claims under investment law", but there probably would be a legal argument or two to challenge any attempt.

I agree with your point that there is lender and investor pressure on the majors arising from environmental concerns, which is influencing market decisions and outcomes at least to some degree. At the same time, as I have alluded to in other posts and articles, many of these same lenders and investors have a hard time staying away from oil & gas when the cycle swings in their favour...

Always a good thing to consider how this impacts on law firms. I find it helpful to think about which practice groups a development like this engages. In this case, there are loads. I must say that I have not seen much in the way of firms shying away from oil & gas work due to sustained criticism. But maybe that will change or be different in this particular case?

Hi Jake, thanks for the reply. I agree that it is more of a political issue, although I am sure that projects departments across the city are taking note. It is the political football it has become which leads me to think some firms may feel its too hot to handle, rather than previously where the work perhaps hasn't hit the headlines. This is definitely not an all firms thing, I feel that certain firms have choices with how they position themselves in the market.

With regards to investors, I agree they can be fickle but I do tend to think that the tide is turning.

Sorry for not being clear, by investment law I meant investment treaty arbitration, specifically under the Energy Charter Treaty, where claims have been brought where oil + gas projects have been cancelled. This would be on top of the other pressures that would face a new gov.

 

[Jake Rickman]

Hi Jake, thanks for the reply. I agree that it is more of a political issue, although I am sure that projects departments across the city are taking note. It is the political football it has become which leads me to think some firms may feel its too hot to handle, rather than previously where the work perhaps hasn't hit the headlines. This is definitely not an all firms thing, I feel that certain firms have choices with how they position themselves in the market.

With regards to investors, I agree they can be fickle but I do tend to think that the tide is turning.

Sorry for not being clear, by investment law I meant investment treaty arbitration, specifically under the Energy Charter Treaty, where claims have been brought where oil + gas projects have been cancelled. This would be on top of the other pressures that would face a new gov.

You know more than I do about this! You're definitely right that the risk that this becomes a political football is almost certainly a conversation that senior lawyers advising on oil & gas and projects are having with clients and their colleagues in regulatory.

I would be curious to see how a firm like Gowling might treat this versus a firm like Akin Gump. Both are respected for their energy work, but one's origins are unabashedly owed to oil & gas whereas the other markets itself as a renewables specialist...

I will do some reading into the Energy Charter Treaty. One of my electives during my LPC was Trade & Transportation, which included a session on energy and energy law, and they had zero mention of this, so this is the first time I'm reading about it.

 

[Jake Rickman]

Hi Jake. Thanks for your opinion. They offer so much more insight. Also, thank you for your interview tips, I shall keep this in mind for the future.

I do agree with what you have to say. In fact, the point you picked up about AI affecting deal volumes is one that caught me eye particularly when there have been interesting developments in this realm. For example, Nvidia agreeing to become an anchor investor for Arm is a news I recently came across. In one of my previous applications, I mentioned Nvidia’s growth when it crossed $1 trillion in market cap. It indicates that market players/potential investors can enter into collaborations with Nvidia to understand more about Generative AI chips (apparently Nvidia is the only company that manufactures these chips, correct me if I’m wrong though!). So I can see the link between this news and AI deal volumes (might not be substantial, but a possibility nonetheless) which means work for M&A/PE lawyers.

Apologies if my wording about the regulation aspect was unclear but I agree with what you said about lawyers advising on the regulatory aspect of AI rather than outrightly drafting them. FYI, the FTC has pulled up OpenAI regarding the ambiguity of information coming out of ChatGPT, so your argument makes much more sense.

The IMF have said the global economic outlook looks slightly better (I’m presuming BoE, Fed & ECB) may make few more interest rate hikes in the coming weeks before we can see a substantial improvement. Regardless, this slight positive outlook, UK inflation going down by 7.9% and the news of PacWest and Banc of California merging along with Google exceeding expectations to hit top market cap makes the situation so much more interesting. With global M&A deal making at an all time low, these pieces tell me that borrowing costs could potentially lower in the foreseeable future increasing consumer spending. In between all this, if AI can be regulated it would make it very interesting from commercial law’s viewpoint.

Therefore, my question to you is how do you expect these pieces to affect the future? Do you think the market is headed for an uptick or are these temporary signs of growth simply just noise? Would love to know your thoughts on this!

Hey Aditya,

To your question at the end of your post: I do not think there is a way to predict the future of markets. A lot of commentators try, but at the end of the day there is no crystal ball I am aware of that let us make any prediction with much certainty. To ask if there is a recovery on the horizon presupposes that there was an economic crash, which never really materialised in the first place (to my surprise, as to be honest I would have expected a proper recession by now). But who is to say we are not on the precipice of a crash? There are indicators that we are, but also suggestions of a more resilient economy on the horizon. What if this is the new "normal"? Or would it even be new? Weren't the 1970s basically an entire decade of high inflation and no/negative growth?

Who can say?

I am prepared to predict that I don't expect any improvement to come over night. My understanding is that it will take months for inflation to fall, rather than weeks. Especially where the inflation target is 2%. It is also not clear to me what mechanisms there are in place to prevent inflation from surging ahead again even if it does fall in the short-term.

To reframe this in an interview context: you continue to raise very fascinating and vexing points. But I would struggle to thread a needle through all the points you raise precisely because the points raise more questions than they answer. (Apologies if you were not trying to raise these stories in the context of developing our commercial awareness specifically for law firm interviews but for a more general chat!)

I think there is some strength to your approach in looking at a specific deal (Nvidia/Arm) in the context of the surge in AI. If your point is that in the long-run, AI may be the catalyst for increased deals, I think that's a fair point. In the short-term, I think you might see a cluster of deals in the VC/growth equity space, as well as M&A deals by big players buying up upstarts. But is this deal volume enough to increase M&A activity across all law firm M&A practice groups? I am not entirely convinced. But I could be wrong!

 

[ADKM]

Hey Aditya,

To your question at the end of your post: I do not think there is a way to predict the future of markets. A lot of commentators try, but at the end of the day there is no crystal ball I am aware of that let us make any prediction with much certainty. To ask if there is a recovery on the horizon presupposes that there was an economic crash, which never really materialised in the first place (to my surprise, as to be honest I would have expected a proper recession by now). But who is to say we are not on the precipice of a crash? There are indicators that we are, but also suggestions of a more resilient economy on the horizon. What if this is the new "normal"? Or would it even be new? Weren't the 1970s basically an entire decade of high inflation and no/negative growth?

Who can say?

I am prepared to predict that I don't expect any improvement to come over night. My understanding is that it will take months for inflation to fall, rather than weeks. Especially where the inflation target is 2%. It is also not clear to me what mechanisms there are in place to prevent inflation from surging ahead again even if it does fall in the short-term.

To reframe this in an interview context: you continue to raise very fascinating and vexing points. But I would struggle to thread a needle through all the points you raise precisely because the points raise more questions than they answer. (Apologies if you were not trying to raise these stories in the context of developing our commercial awareness specifically for law firm interviews but for a more general chat!)

I think there is some strength to your approach in looking at a specific deal (Nvidia/Arm) in the context of the surge in AI. If your point is that in the long-run, AI may be the catalyst for increased deals, I think that's a fair point. In the short-term, I think you might see a cluster of deals in the VC/growth equity space, as well as M&A deals by big players buying up upstarts. But is this deal volume enough to increase M&A activity across all law firm M&A practice groups? I am not entirely convinced. But I could be wrong!

Agree with your analysis Jake. You make an interesting point about VC/growth equity. Seems a logical argument especially given the uncertainties surrounding AI, the best bet is for VC to invest in this sphere to try and gauge how AI would work in the months/years to come before we can make any solid arguments about it affecting M&A deal volumes (whether positive/negative)

 

[Jake Rickman]

Agree with your analysis Jake. You make an interesting point about VC/growth equity. Seems a logical argument especially given the uncertainties surrounding AI, the best bet is for VC to invest in this sphere to try and gauge how AI would work in the months/years to come before we can make any solid arguments about it affecting M&A deal volumes (whether positive/negative)

Off the back of this @Aditya Kasiraman ,

The FT published an op-ed today which argues that the US's equity market stands to modestly benefit from the productive potential of AI, which over 10 years will improve the efficiency of the workforce.

This is similar to what you were suggesting. Though, importantly, AI is not the single factor driving this, just one of several. This is also distinct from driving M&A deals, but it does demonstrate how financial reporters are grappling with the same questions we discussed recently.

Here's the article. Let me know if you do not have access to the FT and I can gift you a link to read it.

 

[ADKM]

Hi Jake, thanks for sharing this article. I have FT access, I'll read this article

 

[mfuturetrainee]

Hi Jake!

I don't have any specific stories to discuss and elaborate on extensively, but being new to analyzing news stories, I'd appreciate guidance on how to approach a news story and whether the approach I've outlined is appropriate for making it relevant to law firms.". For example, I am quite interested in tech and I've been reading about the news of Apple's(+Amazon) profits increasing in the last quarter due to their other services, etc.


News: ft.com/content/17d63b45-6005-499d-96ba-d141f732436c


The way I've been approaching this is by first identifying and summarizing the news story. I briefly describe its main points, including how Apple's profits increased and the reasons for its previous struggles. However, when it comes to assessing its relevance to businesses and law firms, I encounter challenges. While analyzing the article, I find it a bit challenging to formulate ideas that could potentially be significant for businesses. For instance

• As Apple emphasizes protecting its intellectual property, businesses can recognize the need to safeguard their own innovations and digital assets. This includes securing trademarks, patents, and copyrights to maintain a competitive edge.
• Apple's focus on emerging markets like India serves as a reminder for businesses to explore growth opportunities beyond established markets. Expanding into new regions requires an understanding of local regulations and consumer behaviors.
  

These are just some rough points but I wanted to ask if that was the right way to approach it or if I'm being too vague. With regards to how it could impact law firms, I'd think about perhaps the IP practice area and how law firms specializing in intellectual property rights and trademark law may see a rise in clients seeking to safeguard their digital assets, trademarks, and software-related innovations, law firms specializing in consumer protection and compliance could be engaged to ensure that companies adhere to ethical practices, comply with regulations, and provide transparency to their customers.

I just wanted your input as to whether this is the right approach to go forward with when addressing these commercial news stories and is this also the way to see them if wanting to bring it up in an interview when asked?


Thank you so much,
Marie

 

[stone’sthrow]

Hi Jake,
How would you structure an approach to the question “What are the biggest challenges facing our clients?” in an assessment centre?

What’s the best way to demonstrate knowledge of how the law firm can step in when answering this question?

Thanks for the awesome thread. 🧵

 

[Jake Rickman]

Hi Jake!

I don't have any specific stories to discuss and elaborate on extensively, but being new to analyzing news stories, I'd appreciate guidance on how to approach a news story and whether the approach I've outlined is appropriate for making it relevant to law firms.". For example, I am quite interested in tech and I've been reading about the news of Apple's(+Amazon) profits increasing in the last quarter due to their other services, etc.


News: ft.com/content/17d63b45-6005-499d-96ba-d141f732436c


The way I've been approaching this is by first identifying and summarizing the news story. I briefly describe its main points, including how Apple's profits increased and the reasons for its previous struggles. However, when it comes to assessing its relevance to businesses and law firms, I encounter challenges. While analyzing the article, I find it a bit challenging to formulate ideas that could potentially be significant for businesses. For instance

• As Apple emphasizes protecting its intellectual property, businesses can recognize the need to safeguard their own innovations and digital assets. This includes securing trademarks, patents, and copyrights to maintain a competitive edge.
• Apple's focus on emerging markets like India serves as a reminder for businesses to explore growth opportunities beyond established markets. Expanding into new regions requires an understanding of local regulations and consumer behaviors.

These are just some rough points but I wanted to ask if that was the right way to approach it or if I'm being too vague. With regards to how it could impact law firms, I'd think about perhaps the IP practice area and how law firms specializing in intellectual property rights and trademark law may see a rise in clients seeking to safeguard their digital assets, trademarks, and software-related innovations, law firms specializing in consumer protection and compliance could be engaged to ensure that companies adhere to ethical practices, comply with regulations, and provide transparency to their customers.

I just wanted your input as to whether this is the right approach to go forward with when addressing these commercial news stories and is this also the way to see them if wanting to bring it up in an interview when asked?


Thank you so much,
Marie

Hi Marie,

Thanks for your message.

A few thoughts.

This is an instance where your choice of an article to discuss may not be giving you the easiest task to set for yourself. This is because it does not raise straightforwardly legal issues that directly impact on a law firm's ability to advise Apple.

What do I mean by this?

This article discusses a purely financial performance phenomenon: Apple is posting a slowdown in revenue while underlying profit is improving. This is primarily caused by a modest deterioration in hardware sales while its subscription services have grown. This is a mixed bag of results. Revenue slowdown is not ideal, but this is offset by increased profit, which actually makes Apple's shares more valuable on a fundamentals basis.

To me this seems an issue of business strategy and direction rather than anything else. You're doing a good job of hunting for legal issues that this raises. In particular, you would do well to hammer home the connection between Apple's move into the Indian consumer market as a way to bolster its revenue and the jurisdictional issues that raises from a legal perspective.

These are good and valid points; you are good at problem spotting. I think your methodology is strong as well. But the topic itself requires you to strain and worker harder than you need to in order to make the commercial news story relevant for a law firm's practice.

If you're interested in intellectual property law and want to discuss Apple, here is another FT article that summarises Apple's movements into the generative AI space. This raises matters related to IP, consumer protections, compliance and ethics, all of which law firms would be instrumental in helping Apple navigate. Importantly, there is a strong degree of relevance between the commercial topic and a law firm's practice.

 

[Jake Rickman]

Hi Jake,
How would you structure an approach to the question “What are the biggest challenges facing our clients?” in an assessment centre?

What’s the best way to demonstrate knowledge of how the law firm can step in when answering this question?

Thanks for the awesome thread. 🧵

Hello,

This is a difficult question to answer because it is phrased too generally.

Which law firm? Which clients?

Not all law firms are the same. Stephenson Harwood is a different law firm than, say, Allen & Overy. This is because Stephenson Harwood caters to a different class of client and works more prominently in certain areas of law than A&O, which is a generalist firm. Neither firm has much in common with a high street practice. Therefore, your answer to this question would need to be different depending on which firm you are applying to.

From a tactical perspective, this question requires you to know two things:

1. How well do you know the firm and its practice group strengths?
2. Which clients is the firm likely to advise?

You then need to generate some sort of topical challenge relevant to the law firm's clients.

To demonstrate the competencies this question is designed to test, you need to really understand the law firm you're applying to.

TCLA has some decent profiles on most of the largest and most prominent law firms operating in London. Reading across these should give you a sense of the practice areas that a given law firm specialises in. You can supplement this with additional research.

It is often repeated that a law firm's own website is one of the best resources to use to get to know a firm. This is true, especially once you know which areas are more relevant than others. For instance, nearly all law firms have a corporate/M&A department, but not all corporate/M&A practice groups operate in the same way. Slaughter and May's corporate group would likely advise a FTSE 100 company across any sector, whereas Clyde & Co is more likely to advise an insurance company in a merger. If you know that Clyde & Co is a sector-focused firm that has in recent years adopted a strategy to dominate the UK insurance market, this distinction makes sense. Therefore, if you're applying to Clyde & Co, you would do well to study how the firm talks about its insurance practice. Excellent answers to this question will demonstrate an underlying understanding of the client's business model.

Assuming I was applying to Clyde & Co, armed with the knowledge that Clyde & Co is an insurance specialist (among other things), I would do some reading around the insurance industry.

For instance, by Googling "insurance FT" and reading the headlines to see what sorts of articles are in the news. I would try and find a topic that is broad enough to be relevant to as many insurance clients as possible. A good one would be the proposed Solvency II reforms, which will liberalise the regulations on how insurance firms can invest their money. This is because the issue raises vast regulatory issues, as well as extensive opportunities for increased profits for insurance companies.

I will cede that this is a technical area, and understanding why this is immediately relevant requires you to appreciate how the insurance industry's business model works. But there you have it.

Feel free to identify the law firm. I can help you tailor your approach.

 

[F12M34L]

Hi @Jake Rickman - could TCLA consider creating an article or discussion regarding the criticism from the Norway oil fund chief concerning the UK's resistance to green measures?

 

[Jake Rickman]

Hi @Jake Rickman - could TCLA consider creating an article or discussion regarding the criticism from the Norway oil fund chief concerning the UK's resistance to green measures?

Do you have a link to hand?

 

[F12M34L]

Do you have a link to hand?

Here's the article

 

[stone’sthrow]

Hello,

This is a difficult question to answer because it is phrased too generally.

Which law firm? Which clients?

Not all law firms are the same. Stephenson Harwood is a different law firm than, say, Allen & Overy. This is because Stephenson Harwood caters to a different class of client and works more prominently in certain areas of law than A&O, which is a generalist firm. Neither firm has much in common with a high street practice. Therefore, your answer to this question would need to be different depending on which firm you are applying to.

From a tactical perspective, this question requires you to know two things:

1. How well do you know the firm and its practice group strengths?
2. Which clients is the firm likely to advise?

You then need to generate some sort of topical challenge relevant to the law firm's clients.

To demonstrate the competencies this question is designed to test, you need to really understand the law firm you're applying to.

TCLA has some decent profiles on most of the largest and most prominent law firms operating in London. Reading across these should give you a sense of the practice areas that a given law firm specialises in. You can supplement this with additional research.

It is often repeated that a law firm's own website is one of the best resources to use to get to know a firm. This is true, especially once you know which areas are more relevant than others. For instance, nearly all law firms have a corporate/M&A department, but not all corporate/M&A practice groups operate in the same way. Slaughter and May's corporate group would likely advise a FTSE 100 company across any sector, whereas Clyde & Co is more likely to advise an insurance company in a merger. If you know that Clyde & Co is a sector-focused firm that has in recent years adopted a strategy to dominate the UK insurance market, this distinction makes sense. Therefore, if you're applying to Clyde & Co, you would do well to study how the firm talks about its insurance practice. Excellent answers to this question will demonstrate an underlying understanding of the client's business model.

Assuming I was applying to Clyde & Co, armed with the knowledge that Clyde & Co is an insurance specialist (among other things), I would do some reading around the insurance industry.

For instance, by Googling "insurance FT" and reading the headlines to see what sorts of articles are in the news. I would try and find a topic that is broad enough to be relevant to as many insurance clients as possible. A good one would be the proposed Solvency II reforms, which will liberalise the regulations on how insurance firms can invest their money. This is because the issue raises vast regulatory issues, as well as extensive opportunities for increased profits for insurance companies.

I will cede that this is a technical area, and understanding why this is immediately relevant requires you to appreciate how the insurance industry's business model works. But there you have it.

Feel free to identify the law firm. I can help you tailor your approach.

Hi Jake,

Thank you so much for your insightful thoughts!

What are the different facets to how an industry's business model works?

How would you break down going about understanding any industry’s business model and what does the term ‘business model’ fundamentally mean?

After identifying Solvency II reforms as your trend and saying ‘this will pose regulatory challenges and offer greater investment opportunities for insurers’, how would you then go deeper with your answer?

And yes, how would you structure your approach if a law firm is generalised, for example, for Slaughter and May’s corporate practice?

What about, for instance, Skadden, which works on the highest-value public m&a deals globally (aside from the more general competition issues or large number of teams involved)?

 

[Jake Rickman]

Here's the article

Maybe we can start the discussion by asking what commercial issues you feel this raises and why it is relevant to law firms?

 

[Jake Rickman]

Hi Jake,

Thank you so much for your insightful thoughts!

What are the different facets to how an industry's business model works?

How would you break down going about understanding any industry’s business model and what does the term ‘business model’ fundamentally mean?

After identifying Solvency II reforms as your trend and saying ‘this will pose regulatory challenges and offer greater investment opportunities for insurers’, how would you then go deeper with your answer?

And yes, how would you structure your approach if a law firm is generalised, for example, for Slaughter and May’s corporate practice?

What about, for instance, Skadden, which works on the highest-value public m&a deals globally (aside from the more general competition issues or large number of teams involved)?

A firm's business model describes the way in which it generate revenue and converts that into profit. You should therefore seek to identify the way in which a business generates revenue and its primary expenses. Likewise, try and identify the business's strategy.

Each business will have its own business model.

By going deeper with your answer, you should always tie back any analysis to (a) the impact on the law firm's clients; and (b) the impact on the law firm itself. So for Solvency II, what I meant by saying it poses regulatory challenges and greater investment opportunities is that the effect of the UK government's proposed Solvency II reforms will liberalise the capital requirements that govern insurance companies and their ability to invest in certain asset classes. If the government gets their way, insurance companies can invest more capital into private equity, infrastructure, and venture capital. But they also need to ensure that they abide by the new capital requirements; this is a challenge. This answers (a). To answer (b), you would discuss which law firm practice groups the client would rely on to address these challenges and opportunities.

You need to identify what makes your target law firms distinct from their competitors. This requires research. Slaughter and May may have a more "generalist" practice compared to Clyde & Co, but among the elite UK firms, they are known more for advising corporate clients rather than banking and finance groups, especially compared to the likes of Clifford Chance and Freshfields.

I am not sure I understand your question about Skadden.

 

[Lawyerwithadream]

Hi @Jake Rickman I was wondering if you could provide some news topics one should be up to date on? I’ve been trying to navigate the FT but it seems a bit hard to know where to start

 

[Jake Rickman]

Hi @Jake Rickman I was wondering if you could provide some news topics one should be up to date on? I’ve been trying to navigate the FT but it seems a bit hard to know where to start

I would encourage everyone to stay on top of articles related to interest rates and inflation because those two themes impact nearly every aspect of the commercial and legal world.

Aside from that, I would try and focus on maybe three or four other areas that accord with areas of law you are interested in. If you want to do corporate or banking, it is worth subscribing to M&A, private equity, capital markets., and banking topics under the FT's "MyFT" feature. If you are interested in certain sectors like technology or life sciences, select those industries to stay up to date with.

What areas of law are you interested in?