Banking & finance report: Saving the world ain’t all that for top firms

There used to be a time when City banking, finance and regulatory lawyers were seen as either boring suits or oversexed playboys.

Now, however, they are saving the world. And a good gig it is too, although your exposure will vary depending on the firm you are at.

Every firm’s banking practices have been inundated with queries from clients worried about their place in the changing financial landscape. But for work that is right at the epicentre of the financial storm, you will have few choices but to look at the magic circle and Slaughter and May.

Slaughters has long established itself as the Government’s adviser of choice and in recent months the Treasury has been straight on the phone to partners Nigel Boardman and Charles Randell.

Most recently, in January, Slaughters was called in to advise on the Government’s asset protection programme. Under the programme, the Treasury will insure banks against potential losses on toxic loans – and the toxicity in banks’ lending portfolios runs deep these days.

Slaughters also advised the Treasury on the latest equity injection into Royal Bank of Scotland (RBS) last month (January) and led the team behind the original £35bn bank-rescue package announced last October.

Freshfields Bruckhaus Deringer is also guaranteed a steady stream of work, with its age-old relationship with the Bank of England leading to numerous instructions over the past few months.

The firm advised the UK’s central bank on the October and January bailouts, as well as everything else in between.

Clifford Chance, which has had a close relationship with Barclays for some time, was handed a key mandate by the bank last September when it worked alongside US firm Cleary Gottlieb Steen & Hamilton on the acquisition of Lehman Brothers’ investment banking and capital markets arms.

At Linklaters the team has been kept busy, with Royal Bank of Scotland jumping from rights issue to bailout to Bank of China selloff and back to bailout yet again.

Linklaters was also instructed by Lloyds TSB on its rescue bid for struggling mortgage lender HBOS. That deal, which was announced last September and given the ultimate go-ahead last month (January), also provided a role for Allen & Overy, leading for HBOS.

Nice work if you can get it, but be under no illusions that it is all fun, games and glory. On Friday, when the call comes from your client that the latest bailout needs to be announced by Monday morning before the stock exchanges open, you will be the one doing the hard graft with no chance of a weekend and only a little more of sleep.