The UK real estate industry has seen a turnaround since the market dipped during the recession. During the downturn demand for real estate development plummeted and as a result so too did the demand for newly qualified real estate lawyers.
Things have changed, however, and with the economy bouncing back the UK has seen a huge influx in investment from overseas from businesses wishing to finance UK developments. This means that lawyers are required to advise on complex financing deals, as well as the planning, management and sale of properties.
At a basic level though what often attracts people to become real estate lawyers (or property lawyers if you prefer the old-fashioned English term) is the ability to see their work manifest in the real world.
“I think real estate is fun, it’s exciting, it’s challenging, but it’s great because you are dealing with an asset that’s tangible,” says Nabarro real estate partner Marie Scott.
“You can be involved with something that is quite high-profile but you can also go and look at it, touch it, feel it, or see it come out of the ground. You can go and look at a piece of scrubland or a derelict building and actually see it be developed or be regenerated.”
However, although real estate lawyers are involved with large-scale developments they are also fundamental to many businesses both large and small.
Much of the work a real estate lawyer might be expected to do will involve negotiating contracts between landlords and tenants. This can be integral work for shopping centres or retailers looking to expand their stores across the world.
Life in practice
At its heart real estate is a transactional practice – but is also a practical one. Real estate lawyers are required to meet with clients in order to discuss their specific property requirements.
The type of clients that commercial real estate lawyers advise can vary immensely and can include both retailers who are looking to open stores and care providers wish to develop new homes for the elderly. As well as this the UK is seeing an increased number of overseas investors looking to use finance real estate developments in order to make large returns.
Lawyers are also involved in drafting documents at each major stage of a building’s development. This means that the work varies from drafting planning documents to creating sale and purchase agreements as well as funding agreements.
“The work involves very detailed drafting and very detailed negotiations so it’s an area of law which is practical but you can also exercise your grey matter,” says Gowling WLG real estate partner Chris Hunt.
“There’s plenty to do in terms of bespoke drafting and quite hard, full-on detailed negotiations, which appeals to those who want to do a transactional area. So your typical junior lawyer in a real estate team would have a lot of client contact.”
For those working with corporate, retail or leisure occupiers a client could need many leases negotiated at a time. This means that a two-year-qualified lawyer could be handling up to 30 leases at any one time.
What skills are needed?
With such a high number of documents being handled at once one of the most important skills needed by a real estate lawyer is the ability to organise.
“You need be a very good project manager,” says Eversheds real estate lawyer Susan Samuel. But organisation is about more than simply juggling files: “It is not about just waiting for the client to come to you, but saying to the client ‘we’ve mapped out what you need to do in this deal’,” Samuel adds.
Samuel gives the example that if a client is planning to open a store by Christmas than it is important that the lease work is completed by October in order to give time for the store’s fit out. However, this is just the initial step and there can also be many other tasks the client needs to be aware of during the next few months.
Hunt also adds that it is important for real estate lawyers to have be able to adapt to different things due to the cyclical nature of the industry.
“From a personal development perspective it’s important that people have flexible skills set, but it is also important from the persepective of the business.
“As we’re spread over so many sectors of real estate, if you get a fall-off in one type of work and a pick-up in another you want people who are adaptable enough to move around and go where the work is.”
This can mean that it is beneficial for lawyers to be trained in different areas of property such as retail, management or mainstream developments and investments.
What’s happening in the field?
As the economy bounces back a period of economic downturn the UK is seeing a great deal more investment flow into the country from overseas.
This means a lot more work for real estate lawyers, as more property development takes place across the country – particularly in London. This often means the creation of complex financing deals and leads to the creation of such developments as the 45-storey tower at Newington Butts in Elephant and Castle.
For Scott, working with overseas investors often means explaining how UK real estate law works at its fundamental level.
“Sometimes you have to remind yourself that you have to get back to basics when you are doing a deal with an overseas investor as this could be their first time working in the UK market.”
This is sometimes even the case with large international companies such as Google, which Nabarro advised during the company’s development of its London headquarters. Even though Google is one of the biggest companies in the world, it still needed a lot of advice as its London office was the tech giant’s first build and development outside of the US.
Overall, though, real estate is not an area of law that experiences monumental changes affecting how lawyers operate on a day-to-day basis. Scott believes that where real estate lawyers must be alert is in keeping up-to-date with their clients’ market.
“You need to be au fait with what’s happening in the market so you can converse intelligently with clients and show them that you understand their business and you understand what’s going on.”
Changes to how a client operates can often make a difference to how a document is drafted. For instance, the rise of technology and small to medium enterprises caused a shift in what many tenants are looking for when it comes to their properties.
“They demand more flexibility,” says Scott, “they want shorter term leases and they want space which is teched up to the eyeballs.”
These demands to do not always tally up with what landlords are looking for from tenants and can often lead to legal negotiations.
The trainee’s role
The role of a trainee in a real estate team has changed over the years. In the past they were often expected to work simply as form-fillers who completed land registry forms and scheduled deeds.
Now, this work is often completed by dedicated admin teams or paralegals within the firm. This means that trainees are typically given more responsibility within the team.
“What we’ve been finding is that we’ve been able to give our trainees in real estate very good quality work,” says Samuels. “It’s almost the work that we’d give to a newly-qualified lawyer.”
This means trainees are now finding themselves working on, for example, more complex matters like licences for alteration and some aspects of lease negotiation. The opportunities do not end there and some trainees find themselves working extremely closely with clients.
“With the uptick in work our clients’ in-house teams have been struggling and we’ve sometimes been putting trainees with our clients on secondment,” adds Samuel. “Secondment roles are very interesting for trainees and clients and gives them a great experience.”
What firms do real estate work?
Real estate is a huge area of law and most firms will dabble in it to some extent. However, the exact focus of the practice will vary from firm to firm. If you’re hoping to work in real estate, the best thing to do is do some research around firms’ clients. Mayfair’s Boodle Hatfield, for example, acts on real estate deals for the super-rich. Berwin Leighton Paisner is among a number of firms which have a specialism in the hotels and leisure sector.
As a general rule, the largest international firms may have a large real estate team, but it will often be overshadowed by the powerhouse corporate, finance and litigation teams.
Real estate has typically been a big part of what mid-sized and regional firms do. The smaller the firm, the more likely that it will do residential property work mixed in with commercial real estate.
At the bottom end of the market, residential conveyancing is done by thousands of high street firms, though the arrival of Alternative Business Structures means other types of organisation are now challenging traditional firms for this type of work.