Wednesday, June 27, 2007

By the waters of Lehman’s I sat down and wept

3am. Monday morning. It’s a bank – one of the bigger ones but not so prestigious as, say, Goldmans or MS. Like Lehman Brothers, but not Lehman Brothers. The Seller's on the other side of the room, surrounded by his phalanx of flunkeys; lawyers, bankers etc. You’re a flunkey on the Buyer's side, but since the documents have to sign by close of play today a whole roomful of tired bankers are pretending to listen to you negotiating the SPA with Seller's lawyers like they care about whether the Vendor Protection lasts for 6 months or 6 decades after they get their commission on the sale. By now they’re mostly dozing off anyway. And you, you sit there thinking of your miserable salary as a 33-year-old junior partner – which is probably less than Weil Gotshal is paying its NQs – and of how much sleeping beauty (probably at least 6 years your junior) down the table is getting paid for snoozing his way through the discussion, and something dies inside you.

To an extent it’s all relative. Wage serfs outside the top 20 firms probably feel equally annoyed at the sums NQs at, say, US firms get paid, and when it comes to casting envious eyes toward Private Equity houses, bankers aren’t only as bitter as lawyers are when we contemplate their huge bonuses, they’re more bitter. Then again, with the rumours that Red Gordon is going to nationalise the PE industry now that he's got the top job, reducing the European head of Blackstones to sitting with a cardboard placard and a tin cup outside Charing Cross Station, and with former Masters of the Universe already fleeing the country concealed in the undercarriage of private jets to escape debtor's prison when tax on carried interest is raised to 99.9% , a bit of the shine’s probably gone.

But clearly something is wrong here. I mean it seems like half the scurrilous bankerblogs are written by closet lawyers (yeah, LSO, I’m looking at you – and didn't the guy who wrote FIASCO quit banking to be a corporate lawyer?) There’s bound to be a lot of crossover and plenty of friction between the two professions which can’t all be down to pay. Mostly down to pay, maybe, but not all. In fact I think the deeper rift is between two professions who see:

Lawyers (n.): losers who couldn’t make it in banking because (i) they waste time theorising about irrelevant ‘legal issues’, (ii) don’t have prestigious economics degrees, (iii) can’t count past three without getting lost, and (ix) get paid less than bankers do.

Bankers (n.): arrogant twats who (i) waste time going in circles because they can’t understand simple legal issues even when explained to them in Peter-and-Jane language; (ii) don’t have prestigious law degrees; (iii) bullshit their way through meetings because they don’t know anything about the deals they’re on, and (iv) get paid more than lawyers do.

I don’t see this divide getting bridged any time soon, even though there's a fair amount of movement between the two professions - bankers becoming lawyers and vice-versa. Before then, you've got a lot of late nights and a lot of arsey calls from 22-year-old bankers to take. Happy days.

Wednesday, June 6, 2007

(And all of the night)

All-nighters are actually pretty rare. Unless you're one of those creepy juniors who says 'yes' to every piece of work offered, in which may God have mercy on your soul because the Partners won't.

But sometimes you can't get out of them, and so it was that I and a bunch of other colleagues who'd already used up our quota of excuses for Q1-2 found ourselves sitting in front of laptops at stupid-o'clock trying to amend the SPA to work in the client's latest round of concessions to the other side. And, in my case, wondering how we got here.

Rewind a couple days:

An office, somewhere in the City, early afternoon on a Friday. A bunch of lawyers, bankers, accountants and the client are on a conference call.

Client: Hey guys, I'm paying you. Who's the daddy? Anyways, I need to justify my position in this organisation to the Board and I feel like making a pointless acquisition so that my successor has something to sell when I quit for another executive job. Banker has very helpfully identified a target. So, Banker, what d'they do?

Banker: Thanks for asking, Client! We think this is a very exciting company: they make lutenfisk deboners for export to the Latvian market. In our opinion it's a natural synergy with your financial services division. The guys in IBD (translation: team of cheap labourers packed into a cubicle just outside Bangalore) prepared overnight this set of meaningless data which on casual inspection seems to support the rubbish I'm spouting.

Client: Awesome! I've got authorisation: let's buy it on Monday.

Banker: No problemo. We have negotiated you thirty minutes access to an electronic data room: the Accountant will put together a full financial DD report by 4pm.

Accountant: We might need a bit more time...

Client: No! Want! Want Now!

Accountant: We'll need to check it with our Latvian offices - we'll get you a report first thing Monday.

Client: Banker, how long should it take them?

Banker: Well, I guess financial DD is pretty tough. They can prepare it for later this evening.

Client: Later this evening it is.

Banker: Coolio. Oh, and you'll need a due diligence report from the lawyers saying that the target's perfect.

Client: Why?

Banker: So it's their fault when it turns out to be a dog.

Client: Uh-huh. Don't see the need really. How long will that take them?

Banker: 'Bout ten minutes.

Lawyer: We'll do it in five. (To juniors) Sort it out. 

Client: Thanks. You lawyers (laughs), you're such tough negotiators. But I'm not so easy to fool - I want it in two.

Midnight Friday

Client: Where's my report? Want! Want NOW!

Partner: The senior associate's on it. (Sotto voce) Senior, where's my report? Want! Want NOW!

Senior: The junior's running my changes into it. Can't think what's taking so long. (Sotto voce) Junior, where's my report? Want NOW!

Junior: Trainee's proofing the changes in. Trainee? WANT!

Trainee: (contemplates suicide on discovering that the night secretary has accidentally converted the whole document into Arabic and that it now reads from right to left.)

..and then the same thing repeats for the SPA.

The worst thing about nights like this is that you can see tragedy in action - and I use the word tragedy with care, in the sense of a flaw gradually flowering into a fatal blow that ruins an entire enterprise. For Othello, it was jealousy; for Macbeth, ambition; for a client relationship partner, it is the faith in your and your colleagues' skills that leads you to promise unrealistic deadlines. Then, like a cruise-ship sailing majestically toward an iceberg, the problem slowly unfolds.

The commercial meeting goes on for what seems like weeks, and suddenly you're five hours from the deadline for the SPA, but there are still a number of - say three - major commercial points undecided. But hey, you promised. So you start marking up a clean version of the SPA. The senior looks over your shoulder, sees you making notes, and does the same. Shit! Someone's talking again. So you take your ten or so pages of notes, and the senior does the same, and they call in the junior and he or she takes them out to the secretary and says 'put these into the document', and you keep marking up the next ten pages, rinse and repeat. Halfway through you realise you'll have no time to proof this stuff, so you fake a toilet break and go find a trainee who doesn't look too exhausted whom you order to proof in the changes. Since you didn't have time to tell the trainee what to do, he agonises for ten minutes before starting and then prepares his own mark-up based on what his lecturer at law school told him made a good SPA and the 1997 precedent he found on Then you start making changes to a totally clean version of the SPA (because the client resolved one of those commercial points) and ask the junior to go run that in too. Then the meeting is extended, and suddently everyone's looking at you and asking "where's the SPA?", so you go shout at the junior and trainee for a bit and tell them it's needed NOW.

So they take shortcuts, cobble something together, bring it in at about ten to midnight, and surprise surprise, it bears no resemblance to what's wanted. You go scream at them a bit more, and do your own markup in the meeting, finally preparing a half-decent SPA, and hand it to them with dire threats of what will happen if every change doesn't go in perfectly. The junior and trainee, sweating profusely, now make even more mistakes, even more slowly, in their terror and it has to be done again.

2 am

3 am


...and slowly, it comes to resemble what's been agreed between the parties. Or, more likely, the principals are so tired that they would sign anything by this point. Once the commercials are actually agreed, the process of preparing the SPA becomes straightforward, although since the coffee ran out hours ago your team are now licking caffeine off the bottom of their empty mugs to stay awake. Final versions are put together, rejected, amended, proofed, printed again, and again, and by final version number 12 (around 9am), you finally have something everyone can sign without feeling too embarassed.

This is how the fate of billions of pounds - and thousands of employees - is decided every day. Champagne, anyone?

Friday, May 18, 2007

The Burqa'd Lunch

I just came back from work, and have been standing for several minutes on my balcony, savouring the feeling of time passing unnoticed. In front of me, the river’s been flowing angrily on, driven by heavy winds.


I spent the afternoon at my desk, working on something – a report, perhaps, or a minor contract. It hardly matters. Although I was sitting there, performing the tasks set in front of me, deriving as I always do a quiet satisfaction from chopping and reordering phrases, from putting this word just here, that one there, unlocking the meaning that had been waiting behind the individual characters, something was just not there. It wasn’t my mind – I’ve been pretty focused this afternoon. It was my sense of self – soul? - just absent, somehow. Which it had been since the social-endurance-test-celebratory-lunch.

We were supposed to be celebrating closing a deal a while back – post about that coming sometime - and as is customary the deal partners had arranged a team lunch, ostensibly to thank us all for our hard work. Actually I’m being unfair, they probably meant it: we’d turned up willing and cheerful over the weekend, had been nice to the bankers and clients, and generally made ourselves useful and available and Got Stuff Done. The problem was that after the flurry, people kept pulling out of the lunch. First, one of the partners flew back to his home office yesterday. Then another one headed off this morning. The mid-level associate had better things to do. The trainee had a disclosure exercise or something. So in the end it was down to one partner, one senior associate, and one me. Lucky me. Lucky them.

It’s not that the company was bad: they are both warm, charming and interesting people. I’m not, but I can smile, nod and listen well enough to fake a couple of the above moderately convincingly. It’s just that there’s three totally different levels, three entirely incompatible ways of looking at the world, trying to find something to talk about – all within the context of work. He is my boss. She is his boss. It’s like a dinner-party version of that Tarantino film where they’re all standing around holding guns at each other’s heads. No-one wants to make a false move, say the wrong thing, because we all need to end this meal with our professional working relationships intact. We’re three different ages. We’re three different people. The only threads of common interest are work (which is pretty tenuous since yes, we’ve got three different perspectives on that too) and the usual yuppie BS-generator stuff – click the button to make a sentence using one or more of the following elements: Restaurants, Shops, House Prices, Holidays, The Weather (optional, depending on the British presence round the table). Nothing that could possibly be contentious. Nothing remotely human. Things looked like they might improve when the partner ordered a bottle of wine – a very good one, as it happens – but we’re all too good at this; our masks barely slipped. Here or there you’d see a glimpse into something real – him telling an indiscreet joke, her remembering when she used to wait tables as a student – but then the sense of amour proprewould kick back in and the conversation would change topics. Have you worked on any interesting deals recently? Really? It would be great to work with you more. There’s this amazing little restaurant in LA. I got this ring in Singapore, do you like it?

There’s no fighting this kind of situation. No rebellion. No flippancy. No imperfection. Just the grinding monotony of safe, safe conversations you’ve had a dozen times before, that get staler each time. The waitress brings the dessert menus. Would you like anything? Just a coffee, she says. Just a coffee, he says. I look at him. I look at her. I look at the waitress. And I order a triple ice cream with chocolate sauce.

Live free or die!

Monday, May 7, 2007

Not ALL publicity...

So Field Fisher Waterhouse has opened an office in Second Life. I'm inclined to agree with Nearlylegal - "Please, no. It's just wrong." Although at least they didn't sacrifice a goat.

God only knows where they're going with this. Possibly the idea is to attract more IT-literate juniors than the usual crop of Law and History grads, although you'd have thought that having (i) the intellectual curiosity and (ii) the time to lead a 'second' life (actually a third. Your second life is that brief period between leaving the office and coming back in, and is mostly spent asleep) is a cast-iron guarantee that someone isn't cut out for eighteen hour days spent proofing changes into an SPA. That said, the insensitivity to mockery that any lawyer with a second life avatar presumably possesses could be handy in client meetings.

But on balance it's more likely that this is designed to raise the firm's profile, and this is where FFW have run slap-bang into a very basic problem.

Lawyers make terrible marketers - see for example this. To make things worse, lawyers don't always make the best choices in staffing their marketing departments. Given the choice between some dull old marketing buffer with experience working for clients and a bunch of cheap twentysomethings from Oz on a gap year, law firms all seem to jump the same way when it comes to staffing. Better hope that your clients like sport and drinking, because that's what most of your marketing events are going to be! It's perhaps not surprising that this is one area where US firms tend to perform better, although they aren't totally immune to bias either - the assumption isn't that you'll love rugby and beer, it's that in the few hours outside work you can grab each week, what you REALLY want to do is to discuss your job in excruciating detail with bright, keen and very earnest people who will ask difficult questions about it (this also applies to any firm which runs seminars outside normal business hours). It's perhaps not surprising that someone who thinks this is a good way of getting business also thinks that buying a digital representation of a glass-and-concrete office is a good way of spending their marketing budget. But they've missed their market - FFW would probably get more views if they rented space on the playboy site, and it would in all likelihood be cheaper too. Come to think of it, now that Olswang's founder has departed for pastures new, there's probably space for a suitably unorthodox law firm to run a stunt like that, in which case you read it here first.

But perhaps the problem's deeper than dodgy staffing. After all, what are we really selling as lawyers - a better chance at winning a future dispute? Transaction-process-management? Common sense advice? Different clients want different things from their lawyers, which I imagine makes it a bit tricker to offer them something appealing to part them from their coins. So it is that 'marketing' too often is a pathetic attempt to bribe clients with their own money. Guess what - they know we're doing it.

It seems the world is still waiting for a law firm that can offer innovative or personalised events to clients and in-house counsel with the gift of work. In the meantime, back to mass leafleting clients with invitations to our summer drinks reception/Wimbledon-peripheral-court package. Let's hope we get a few more clients turning up than last year. The guy from Glaxo looked sort of lonely surrounded by a pack of partners.

Sunday, April 29, 2007

Time off for bad behaviour

You know what happens when a lawyer skips holidays? It builds up. First the little pressures - he starts hoarding paperclips, or building a tower out of used ring binders. Then he stops bathing regularly, maybe forgets to change his suit. He starts putting typos into documents he's asking people to read, you know, just for fun. 

Then he finally snaps. In this country, we're generally spared the sight of fat, sweaty couldn't-make-partner seniors stalking the corridors of our firms with loaded semiautomatics, but you can always tell when they've reached the same mental state as would cause a U.S. postman to reach for the gun cupboard. It's in their eyes, in the glazed response to questions, the tick-tock drumming of their pen on the desk, the growing pile of unlooked-at papers - and it always ends in tears, usually those of the secretary who has to keep up appearances and sweep away the debris.

Can't stress enough - taking holidays is really, really important. So why don't we do it?

It's certainly not that we aren't entitled. Yes, in the UK we have a miserly eight public holidays a year. Our more religious neighbours enjoy the benefit of Saints' festivals and such to bolster this number: Italy currently leads the field, the perk of Roman citizenship in the twenty-first century being sixteen days that can cheerfully be given over to church, family, the consumption of Frascati and the other delights of the peninsular. Even the famously put-upon Americans get ten, if they take them. 

But in the City, our masters tend to allow us a relatively generous 20-30 days' holiday, which then accumulates at the glacial rate of one a year. So if you stay with the firm you trained with, by senior associate level you have about a month and a half every year to spend in the rehabilitation clinic of your choice. 

That said, who takes their full holiday entitlement? I guess it depends on the firm's culture - but based on a careful study* carried out a few weeks ago, most people end up with five days to a week untaken by the end of the year. And this is at London firms, where people are at least encouraged to take their holidays. The worst stories emanate from across the Atlantic, where a quarter of all workers are reported to take no holiday at all each year. 

So the fightback starts here. Take some time off. Go spend it with your family, your dog, whoever. Sit in a basement writing blog posts. Tear up unstamped share transfer forms while squatting naked in front of a log fire. Whatever floats your boat. 

But take your holidays. Or one day your colleagues will regret it.

*(at a party, asking a bunch of drunken friends from a cross-section of firms)

Tuesday, April 24, 2007

A tale of two jurisdictions

A friend alerted me to the following post on Legal Week:

“I am a third-seat trainee with a top 10 City firm. I am Chinese and have done Chinese law in China, followed by the LLM with a good university in the UK and GDL and LPC in London with BPP Law School. I am about to qualify into either banking or corporate.

My dilemma is whether to stay in the UK with my current firm or apply to another practice in China - perhaps Hong Kong or Shanghai - upon qualification. I thoroughly enjoy the UK lifestyle but have a feeling my career prospects might be better over in China, even though I realise making partner will not be easy.”

This raises some issues rather close to Beefeater’s heart. I’ll get back to giving my view on the question in a moment, but first some background.
The PRC has a far less developed legal market than does the UK or Hong Kong, which is not surprising since the rule of law (as opposed to arbitrary decision making) only became government policy about thirty years ago. There remains some doubt as to the proper translation of the term ‘Rule of Law’: 依法治国 against 以法制国, which denote, broadly, ‘relying on the law to govern the country’ and ‘controlling the country by means of the laws’. Until fairly recently, it’s fair to say that the latter interpretation was correct in most cases – which meant that lawyers were public functionaries, rather than private professionals.

That has some profound implications for law firms operating in the PRC. 

First, lawyers don’t yet form a prestigious professional class in the PRC in the same way as in more sophisticated legal markets. Instead they fall between the stools of the old bureaucracy of officials, which still exercises political control, and the new plutocracy of bankers and businesspeople which drives the economy. They therefore command less respect from clients than their foreign counterparts.

Second, the tendency to view lawyers as functionaries makes them much more of a resource than in international firms, especially at junior levels – don’t even whisper the phrase ‘work-life balance’. Training is therefore secondary to billing. This is somewhat true of US firms as well (although on a different order of magnitude), but my impression has been that UK and Hong Kong firms generally make more of an effort to develop and nurture their lawyers.

Third, PRC clients have grown up viewing the law not as a set of rules that must be followed in all cases, but as a set of guidelines that one ought to have regard to, and they can give little weight to the lawyer’s traditional job of interpreting and applying the law. As a result it’s not unknown for PRC clients to put more pressure than, say, UK or US clients on their lawyers to give the ‘helpful’ answer to a ‘can we do this’ question rather than the legally correct answer. 

Fourth, because the law hasn’t yet established itself as an impartial set of rules which everyone can trust, it can’t fulfil the function it fulfils in older jurisdictions of partly dispensing with the need for good faith between contracting parties. This leaves a gap, and the law can offer relatively little protection in China against a counterparty which enters into a contract with no intention of performing it. Knowing how to obtain and enforce a judgment therefore requires skills which are as much social and commercial as legal.

Back to the issue of where the questioner should qualify: it depends on what kind of lawyer he or she wants to be. PRC firms will make you as much of a businessman as a lawyer and you can expect early partnership, but this generally comes at the cost of being a less good technical lawyer. Good UK and US firms are more satisfying places to be a technically good lawyer and your clients will treat you with more respect, but it is a slower (if better paid) route to that elusive equity stake.

Saturday, April 14, 2007


You asked me to work some changes into a document for you a couple of days ago.

Let's talk about that.

Non-legal readers may wonder why a qualified lawyer is needed to make changes to this document.

Well, the trainees are mostly occupied doing menial tasks - bless their socks - for a partner who is higher up the pecking order than you are. Your secretary could probably put through a couple of the basic changes but unaccountably she left at half past five and the one night secretary on the floor is busy handling work for - you guessed it - those same senior partners. Doc Centre has refused to work with you since 1998 on account of your bizarre scrawl.

That leaves me.

I'm the obvious choice really. Because I have some background on the matter -thanks for taking me to that meeting - I can pick up the points you meant to put in, the comments you almost mentioned, and the devastating analysis that you swore you wrote on the document but which you actually absently doodled onto a stray piece of paper that you won't discover until you open your Telegraph on the train back to the Home Counties tonight. I can do it quicker, cheaper, and faster than any other practical alternative.

That's not saying much.

First, I guess I skipped the cryptography classes at law school. As the Americans would say, strike one. The initial forty pages of comments read like Linear B. I mean I tried my Greek primer but it's got nothin', and the bit of the Rosetta stone dealing with completion mechanics must have dropped off before the British Museum got hold of it.

Never mind, let's say I decode that. Then we hit the Warranties. You certainly let them have it with both barrels! At least, I think you did. Your by-hand amendments run joyfully across the page. They leap, they turn, they twist. They frolic between lines, curl against corners, shoot off at 170 degrees and then, with a cheeky and knowing glance, they duck around the page to continue overleaf. Sometimes they are large, bestriding the carve-outs like colossi. Sometimes they are small and crabbed, skulking between riders that you've made on separate pages.

I think that that section you wrote on page 56 was in Arabic. But it's hard to tell, since it's crossed out, marked up, lined down, cross-referenced against a section written in block capitals in rider 64B1 and double-cross-referenced back to clause 19 of the version you used in That-Matter-No-Don't-Tell-Me-It's-On-The-Tip-Of-My-Tongue-Anyway-It-Was-About-The-Same-As-This-One-But-Better.

And clients have a problem with the hours juniors work.

Bite me.