The Law: Corporate

Working on headline-grabbing mergers can be extremely
stimulating, but it can also mean putting in very long hours


Almost every merger or takeover featured in the business pages of daily newspapers will have corporate lawyers working on it. So if you are an adrenaline junky who would relish the opportunity to be at the heart of high-profile, multimillion-pound deals, then a legal career in corporate finance may be right up your street.

Whats it all about?
Corporate lawyers advise their clients on a broad range of matters, including mergers and acquisitions (M&A) and takeovers, as well as on methods for raising additional cash, such as flotation on a stock exchange. The length of a transaction will vary depending on the type and size of the deal. Some deals are completed in less than a week, while others may take several months.

The pros:
The thrill of being at the heart of multimillion-pound deals
Seeing your deal in the newspapers
Varied responsibilities
Good job prospects working as a corporate lawyer increases the flexibility of career choices and gives you the option to move to an in-house legal department or an investment bank

The cons:
Long hours
Lots of document processing
Junior lawyers get fewer responsibilities than their colleagues in other departments
Corporate lawyers face a greater risk of being made redundant if there is a downturn in the market

Finally
Familiarise yourself with the work of a corporate lawyer by reading the business pages of broadsheet newspapers

As a corporate lawyer you have to be commercially minded as well as having a good understanding of the law. This means that getting to know clients businesses and industry sectors. A corporate lawyers client base is very varied and typically includes entrepreneurs, small, privately owned businesses and large multinational corporations such as pharmaceutical giant GlaxoSmithKline or energy powerhouse BP.

Most corporate lawyers also act for a range of financial institutions, including high street and investment banks such as Goldman Sachs and Credit Suisse.

The size of transactions on which corporate lawyers will work varies depending on the size of the law firm they work for. For instance, a lawyer working for a top 20 City firm will typically handle deals worth millions, or even billions, of pounds. Magic circle firms Freshfields Bruckhaus Deringer and Linklaters sat on the opposite sides of the negotiating table on Dubai-based DP Worlds 3bn takeover of ports operator P&O. M&A heavyweight Slaughter and May was also involved in the deal, advising Singapores PSA, which made an unsuccessful counter-bid for P&O.

In contrast, a lawyer employed by a law firm in the regions. The nature of deals handled by corporate lawyers may be affected by the state of the worlds major economies. For instance, there have been a number of companies, notably those in the online gaming and mining sectors, floating on the London Stock Exchange (LSE) because of increased confidence in the performance of the FTSE100 (the index of the UKs top 100 share prices). The M&A market has also picked up significantly in the past 12 months, which has given corporate departments around the country a much-needed boost.

The private equity market has also remained buoyant. A private equity buyout is the acquisition of an established target company or business. The deal is driven by private equity investors such as CVC Capital Partners and Apax Partners. The companys management is offered a small percentage interest in the company as an incentive to drive the business forward. Private equity investors choose companies with the potential for growth, an increase in value and with a strong cashflow. They use the cash generated by the business to pay back the debt borrowed to finance the purchase. Their aim is to sell the company, or to list it on a stock exchange, within three to five years.

The working culture
The pace in a corporate department can be very fast at times and it is not unusual for lawyers to work long hours, sometimes throughout the night. Although there is great pressure at times, most people manage to retain their sense of humour. With this hard work comes a great team spirit and a real feeling of satisfaction when a deadline is finally met; and there is also the party to celebrate the successful completion of the deal to look forward to. Of course, there are invariably quieter periods to allow you to recover from the busy times.

A corporate lawyers day-to-day responsibilities will differ, depending on how many years they have been in practice. Senior corporate lawyers will act as a transaction manager and liaise with the clients other advisers, including investment banks and accountants. They will also be the clients principal point of contact and will advise companies on strategic matters so that they can achieve their corporate goals. Senior corporate lawyers will also attend high-level meetings and lead negotiations. The complex nature of transactions means that junior lawyers are often handed less responsibility than their counterparts in other departments.

A junior corporate lawyers work is extremely varied and can include such tasks as carrying out research, drafting agreements, sitting in on client meetings and conducting due diligence (reviewing a companys contracts with lenders, suppliers etc). The downside is that deals are usually very document-heavy, meaning trainees in corporate departments can sometimes get handed the photocopying and proof-reading duties. Trainees and junior lawyers in corporate departments also tend to work longer hours than their colleagues in other departments.

Why is this interesting?
Being at the hub of a large transaction is fascinating, as you will be involved in the deal from start to finish. It is also rewarding to read about the deal you were working on in the national press.

Personal and legal skills required
Corporate lawyers must have a good knowledge of the law and relevant regulations and should be commercially aware. They also need to be effective team players, because the sheer size of many deals means there will usually be a large number of lawyers from different departments all handling different aspects of the transaction. They also need to be organised and able to meet tight deadlines. With the long hours culture being prevalent, a good sense of humour is vital to help you get through these busy and stressful periods.

Case Study

Following the lifting of restrictions on the Japanese legal market in 2005, Linklaters joined forces with partners from Mitsui Yasuda Wani & Maeda and became the first fully integrated law firm, providing clients with both Japanese and international advice from a single source. The first large deal was not long in coming. In the biggest deal of its kind in Japan we helped Vodafone sell the Japanese arm of its business to SoftBank.

I arrived in the middle of the deal, so I had to catch up very quickly indeed; this was no mean feat because there were so many strands to it. We were not just handling the sale, we also helped Vodafone provide finance to SoftBank through preference shares and a loan. At one point we had colleagues from Amsterdam, London and Hong Kong working alongside the Tokyo team.

I had already done a seat in the banking department, so I could help out with some of the finance work, reviewing and collating documents to satisfy the loan conditions. Meanwhile, on the corporate side, I reviewed documents and drafted agreements. I also took charge of a particular project relating to the fact that in Japan you can have fractions of shares. In order to sell the company we needed to make an application to the registrar, allowing these share fractions to be sold back to Vodafone Japan alongside the main deal.

I was very pleased to be in Tokyo for this deal. As well as tackling a pretty challenging workload myself, it was fascinating to see so many lawyers from different cultures and jurisdictions working together to complete the transaction. You can learn a lot by watching experienced negotiators at work. There is no doubt that the best moment was receiving confirmation that Vodafone had finally received the full cash payment for the sale of Vodafone Japan, because then we knew the deal was finally done. So much work had gone into it by so many different people, and there was huge relief and huge excitement.

Alistair Watson studied French and Linguistics at Keble College, Oxford, and joined Linklaters as a trainee in 2005

How to read the Business Sections

The importance of flicking through the business sections of the broadsheets cannot be stressed enough. It will help you to get a grasp on how businesses operate. Reading the business sections will also give you some idea of what is happening in the City, business trends, the state of the economy and so on. Indeed, an understanding of these issues will give you a head start when applying for vacation placements and training contracts. But if you find reading the business pages a bit mind boggling, the following jargon-buster should help.

Analyst a person who studies companies to recommend whether to buy or sell their shares to investors.
Capital markets the collective word used to describe dealings in shares (equities) and debt (loans, bonds).
FTSE100 the index of the leading 100 public companies (see initial public offering, below) based on their share prices. FTSE100 companies include BT Group and Tesco. Companies move up the index as their share prices increase and vice-versa.
Hostile takeover a takeover bid/offer that has not been recommended by the target companys directors.
Initial public offering (IPO) the process a company goes through to sell its shares to the public and to list on a stock exchange. Once a company completes an IPO it becomes a public company.
Inflation a government index to measure the rate by which the price of a basket of goods bought by a typical household increases. Prices rise when demand is greater than supply.
Management buyout a deal involving the purchase of a business by the companys own directors and senior management.