Eurowobbles, tax dodging and the law schools of Manchester

26th May 2010

I took my first trip to Athens over the last May bank holiday weekend. I was curious about the place, not least because it’s at the centre of Europe’s troubles right now. I stayed with friends in the Dafni district, which is just three Metro stops away from the Acropolis. Having shivered as I left London in a miserable 7°C, Athens’ 25°C was just glorious. Add another 20°C in the height of summer and it can sometimes be a real effort to do anything. Perhaps this is why Greek life is as it is?

Ah, the Greek lifestyle – plenty of great aspects but some major problems. Athens is a smaller city than London and it’s blessed with beaches, sunshine, orange trees on the streets and a clean, new Metro system that is reasonably priced and filled with mini museums. Food and time with family and friends are priorities, and the quality of the food is excellent. In decades past, many Athenian families pulled down their old houses and replaced them with apartment blocks. It’s not uncommon to live surrounded by your relatives, which has certain downsides but can make life easier.

Of course the economy is on its back. There are several contributory reasons, among them inadequate tax recovery, rampant nepotism, corruption, people employed in jobs that don’t actually exist and a popular custom whereby workers are paid 14 months salary per year. There’s an interesting item in Legal Week on how lawyers have been identified as among the worst tax dodgers in the country. Their response to a new 21% tax on their services is to strike.

The prices in Athens matched London. My friends also told me that the average monthly salary was in the region of €800, and perhaps that’s why people feel they need the bonus two months’ salary. Of course, living in a family-owned apartment building would bring someone’s outgoings down considerably. There’s definitely an element of having to show your wealth in Athens. I visited a new marina that was chock full of superyachts, and for a country that’s broke, it just seemed odd.

Violent demonstrations were ongoing while I was there but, yet again, our TV news never seems to portray an accurate picture. Despite being close to the centre, we experienced no disruption (other than the Metro closing for 90 minutes) and there was little to suggest protests were even going on. I wanted check out the demonstrations, but my friends looked aghast – why did I want to get mixed up with The Anarchists? Apparently Greece has a hard core of protestors with a track record of civil disorder. The death of three bank employees that weekend was not the first time completely innocent people have been hurt.

Some of the UK law firms send trainees to Athens and, now that I’ve been there, I’ve updated our report on living and working as a visitor in the city. You can find this in the Overseas Opportunities section of our website.

I also went to Manchester this month for an action-packed day of visits. I saw law firm Cobbetts and all three of the LPC providers in the city. I was hosted by Cobbetts’ grad recruitment manager Paul Kendall – a very nice chap – at the firm’s smart offices on Mosley Street. We’ll be speaking with Cobbetts’ trainees in a few weeks to find out about their training scheme. At BPP law school on Oxford Road, to my delight, one of my hosts was an old colleague from my days in practice – Ann Evans. She and I worked together at Lewis Silkin mwahgh years ago. Ann is now the GDL guru, and for my part I reckon she’d make a great tutor. When I was a young trainee she was a real help. I also met the head of the BPP full-time LPC programme, Andrea Williams. I then visited Kathryn Newton, the LPC course director over at Manchester Met, and finally Richard Haggett, the centre head at the new College of Law branch next to Piccadilly Gardens.

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I asked them all plenty of questions ahead of our next set of reports on the LPC providers. The presence of three providers in the city is clearly causing an oversupply of LPC places and none of them is operating at full capacity. I see reasons to choose each of the three schools, ranging from cost to teaching methods to shiny-ness of premises. All will be revealed in our next set of reports, which is currently being compiled by my researcher Amie McFadzean. If you are an LPC or BPTC student then why not email either Amie or myself with feedback on your provider. Comments of all types appreciated. Our current LPC and BPTC reports are available online in the law schools section of this website.

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Anna Williams, Editor

Nosing around the Bar

6th May 2010

It's my final day at Chambers and Partners and I thought I'd give a brief overview of what's been going on recently at the Student Guide. While the rest of the delightful team are hard at work researching law firms, I've been fortunate enough to have spent the last couple of months working on the Bar section of the new guide. I've spent a good deal of time munching biscuits and sipping tea with QCs and clerks, pupils and tenants, trying to get the lowdown on London's best sets. And it's been an eye opener.

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I undertook the BVC in 2008/09, and I'll be starting my pupillage this October, so my visits were both of both professional and personal interest. With that in mind, I have a few observations of life at the Bar. In no particular order:

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1. Barristers' chambers are not law firms. Obvious perhaps, but even the modern, shiny, glass and steel, corporate sets - the ones that talk about "client-facing businesses" and "customers" - are still vastly different entities than big solicitors' firms. In part it's explained by a genuine love of law. People don't become commercial barristers just for the (incredibly) lucrative compensation, and there is no 'City-boy' lifestyle to speak of. I don't think you find too many magic circle trainees waxing lyrical about the rule against perpetuities.

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2. It just gets harder and harder for students. There are so many excellent candidates out there these days, that just to pass the CV sift at a high-quality civil set you're talking a minimum of a First from a redbrick university, probably Oxbridge, and almost certainly an armful of academic awards. One recruiter at a top set told me that academic record of the set's new tenants was "frightening." He wasn't wrong. Whether that's good or bad is open to debate, but it does seem to be a reality.

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3. Criminal and civil are different worlds. Other than the title of barrister, and the possibility of similar career progression (junior, senior junior, QC, the bench), the differences between the two branches are far greater than the similarities.

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4. Barristers talk like they're in the Court of Appeal. If you see yourself going to the Bar, I suggest you start using numbers when you're having a conversation. You know the kind of thing. "Well, there are three points to consider. One, you made an oral covenant to undertake the washing up last night, at or around 7.45pm. Two, I undertook the preparation and cooking of said Bolognese, and convention dictates... etc." It does make you feel a tad sorry for their partners. On reflection, that might be why I've written this piece in this format.

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5. Pupillage is tough but not impossible. While the pupils I spoke to acknowledged the difficulty of pupillage, and there was a general consensus on the occasional dark period of despair, there was a lot of positive feedback too. The Bar has modernised, and the days where pupils were fags as well as trainees are no longer with us.

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Now then, I'm running off to Cuba to sip Mojitos, smoke Cohibas and do all the other unoriginal things that Western tourists are wont to do. I'd like to thank the team for my leaving present of US dollars, which, while gratefully received, are entirely useless on this particular Caribbean Island.

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Adios,

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Will Martin

Vulture funds: just how nasty are they?

19th April 2010

We love chatting politics at the Student Guide, and with a general election on the horizon, the debate in our office about Who Runs Britain is hotting up. We’re obviously strictly non-partisan, so we thought we’d report on an issue where, happily, all three major parties appear to be on the side of the angels for once.

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Vulture funds. What are they? Properly named ‘distressed debt’ or ‘special situations’ funds, they are a type of private equity or hedge fund that invests in debt issued by weak or dying companies, or indeed, countries. They buy up the debt cheaply, when it is about to be written off, before suing for the full value of the debt plus interest.

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City firm Travers Smith has been representing the Republic of Argentina in two separate Commercial Court actions being brought by vulture funds. They bought up a significant portion of the country’s external public debt at very low prices and then attempted to cash them when the Argentine economy collapsed in 2002.

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Argentina is not the only nation to have suffered. Zambia, too, came to the British courts over a vulture fund seeking to extract more than $40m from the African country for a debt which it bought for less than $4m. “Profiteering doesn’t get any more cynical than this,” said Caroline Pearce of the Jubilee Debt campaign in 2007. “Zambia has been planning to spend the money released from debt cancellation on much-needed nurses, teachers and infrastructure: this is what debt cancellation is intended for not to line the pockets of businessmen based in rich countries.” Zambia lost the case, and eventually paid the fund in question $15.5m. Cameroon, Ethiopia, Honduras, Nicaragua, Sudan and Uganda are among the other countries that have faced legal action from the vultures.

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British courts have historically been quite favourable to vulture funds, but the passing of the Debt Relief (Developing Countries) Act was one of the last actions of Parliament before the 2010 election. Campaigners had been lobbying for the law for some time, and cross-party consensus was reached. There was minor controversy when a lone Tory MP opposed the Bill at the third reading, but Labour and Lib Dems called on Harriet Harman to make more time for it. The Act finally became law on April 7th. “It is not often that a voluntary organisation conducts street protests against City firms [fairly or unfairly, Dechert in particular was targeted] in one month and is rewarded by a Bill virtually to abolish these funds in the next,”said one member of the House of Lords.

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It may not abolish vulture funds entirely, but the Act will limit their ability to sue in British courts for full repayment of debts. An immediate effect will be to block a fund collecting £12m from Liberia for a debt that dates from 1978.

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Rich Simmons, Deputy Editor

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Read more...

The Jubilee Debt Campaign

Increase your commercial awareness!

29th March 2010

Want to know more about the current issues in construction law? Or clinical negligence? Or tax? We can help!

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Every year our parent publication, Chambers UK, asks experts in many fields of law to write a brief round-up of the past year. We’ve stolen them for the Student Guide site because we think they could really help increase your knowledge of the market – always useful at interview.

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For example, here's a summary of what’s been going on in the world of criminal law, written by Angus McBride of Clerkenwell-based Kingsley Napley. This is one of the best firms in London for criminal law, but if you’re picturing grimy pub brawls and undesirable clients, you’re a bit off the mark. Kingsley Napley acts for the wealthy and deals with a lot of ‘posh punch-ups’ and high-level fraud. A standing joke is that its clients are more likely to have glassed someone with a champagne bottle than a pint glass. We’re very much hoping to include Kingsley Napley in our True Picture section this year.

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Other areas covered include real estate (written by Berwin Leighton Paisner), family law (by Withers), shipping (by Ince & Co) and many more. You can find them all (not in PDF format) in the section of our website called Different Areas of Legal Practice.

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Rich Simmons, Deputy Editor

A peek at the world of insurance law

2nd March 2010

I went to visit one of the hottest tickets in insurance law the other week – Kennedys. Spirits were high on the morning of my visit as the firm had just the night before won ‘Insurance Team of the Year’ and ‘Law Firm of the Year’ awards from Legal Business magazine.

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Insurance is a big deal at Kennedys, and a high proportion of its lawyers work in this field, not that this means they all do the same thing. Insurance sector clients are just like any other client in many ways – they need corporate, employment, regulatory and many other strands of commercial advice as well as representation in disputes. Actually, the insurance sector isn’t the only industry the firm is working in. It also targets clients in construction and engineering, healthcare, local government, rail, maritime and international trade.

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Kennedys has changed quite a bit over the past decade and it now sits in the top 50 in the UK. The firm has eight domestic offices, six more in overseas locations (Hong Kong, Singapore, Australia, New Zealand, Spain, UAE), plus affiliations with independent law firms in several other countries. Growth is partly attributed to a merger in 2008 with a specialist insurance firm called Davies Lavery, but there have also been quite a few important senior-level hires. If you thought all insurance lawyers worked on was road traffic accident litigation then think again.

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Teams from Kennedys have been involved with the many claims over the Buncefield oil depot explosion; litigation over a fire in the Channel Tunnel in 2008; heavy industry problems in Mexico and Venezuela; the sinking of a dredger in Sierra Leone; a business interruption claim arising from the time of Madeleine McCann’s disappearance and the missing billions that disappeared courtesy of super fraudster Bernie Madoff.

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My visit to Kennedys reminded me of how much law firms are shaped by their core clients. Kennedy’s HQ on Fenchurch Avenue is right on the doorstep of the London insurance market. On the ninth (and top) floor of the firm’s office building is a roof terrace looking over the insurance quarter. Lloyd’s of London is almost next door, as is The Gherkin. I also caught a glimpse of Tower 42, The London Eye, Tower Bridge and the fiery top of Monument, which commemorates the Great fire of London in 1666 and was designed by Sir Christopher Wren. Check out Monument’s website for the full skinny. I was surprised to learn that it is the tallest isolated stone column in the world. If you want to climb its 311 spiral steps your reward will be a fantastic view. Last time I did it I also got a very nice certificate.

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If you’re hoping to find a training contract for September 2011 then I’ve some excellent news. Kennedys is presently recruiting one year in advance (although this could change for future years) and the firm will be accepting applications from September 2010 until the end of November 2010. Successful applicants will be interviewed in January/February 2011. More details here.

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Between 15 and 20 recruits are taken on each year, most of them for the main London HQ. A smaller number join Kennedy’s regional offices here in the UK, namely Chelmsford, Cambridge, Manchester and Birmingham. I heard a whisper that the firm might offer a Hong Kong secondment in the future, so I’ll certainly be keeping an eye out for news on that. If you want to find out more about Kennedys then I’d recommend its Grad Recruitment website as a first step. You’ll find of useful info about the training scheme and the firm itself. You’ll also be able to read about how Kennedys’ trainees are helping to deliver the Citizenship aspects of the national curriculum to teenagers at the local Mulberry School in Tower Hamlets.

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Here at Chambers and Partners HQ things are moving at a cracking pace. The research team is coming to the end of its examination of the US legal market. Junior associates across the States have shared their experiences of working in the profession and, most crucially, they’ve given a very clear picture of what’s needed to break into the law. As in so many areas, what happens in America usually then rears its head here in the UK. Getting the right grades from the right universities and law schools is fundamental to a student’s chances of success over the pond, and there’s every indication that academic success will become even more important here.

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As the squeeze on undergraduate places tightens yet further, and the economic constraints on graduate recruiting in the UK legal profession continue into 2010, getting good grades all the way through school and uni is increasingly vital. Frankly, there’s no sign of a let up in this trend. Law firms are telling us that the standard of applications received has risen this past year, so the market should certainly be viewed as tough as we go into the 2010 recruiting round. More details will emerge as our UK research progresses, and I have no doubt that we’ll have plenty of news to pass on to all our readers. In practice, anyone wanting a legal career can expect a lot of hard work, both academically and in terms of doing research on potential employers. Making high-grade training applications is going to be a time consuming business so I’d recommend you start preparing now, if you haven’t already.

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Coming soon to the Student Guide website will be a handy feature on how best to research law firms. It’s what Chambers and Partners exists for and I hope we can pass on some valuable tips to you. If you have friends who will benefit from this type of advice then get them to register on our Student site.

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The next thing on the agenda for the team is our office move. For many years, we’ve worked in the Barbican area of London, opposite Smithfield meat market. It’s a wonderful area, despite chicken giblets in the gutters early in the mornings. Next week we’re moving to a smarter office in the West End, close to Covent Garden. Naturally we’re all very excited!

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Anna Williams, Editor