With 24 offices around the world, this City stalwart could take you to Tokyo, Moscow or Abu Dhabi on trainee secondment.
“Much like any successful marriage, you have to keep working at a merger,” HSF’s graduate recruitment partner Matthew White tells us. The first two years of any marriage are crucial, so it’s a good sign that disillusionment hasn’t set in just yet between Herbert Smith and Aussie ‘Big Sixer’ Freehills. Indeed, two years on and things are looking pretty peachy for the recently wed pair: a global revenue of £800m coupled with recent openings in Frankfurt, New York and Seoul suggest the combined firm is en route to take the world by storm. “We’ve already achieved our goal of becoming one of the largest firms in the Asia-Pacific region, and now we’re focused on consolidating our presence there and becoming the leading firm in the region,” White confirms.
For trainees, the change hasn’t gone unnoticed on the ground. “There are always quite a few Aussies knocking about on secondment, and they bring a bit more casualness to the place,” one said. “They’re enthusiastic, and it makes it an exciting place to work.” Another was slightly less effusive, pointing out the “horrendous new logo” born out of the merger, which became the butt of a joke in the press for its likeness to a certain part of a cat.
Traditionally, Herbies has always been a corporate and disputes powerhouse, and it continues to amass strings of top rankings in Chambers UK across its core practices. When it comes to trainee departmental postings, HSF has a penchant for codifying the seats to near incomprehensibility – a stint in corporate LC6S might be followed by a period in litigation LL4, but what does this mean in real terms? Firstly, seats are structured around five divisions: corporate; dispute resolution; finance, real estate and projects; employment, pensions and incentives; and competition, regulation and trade. All trainees sit in at least one corporate and one litigation seat, but these are split into specialist areas such as IP, tax, energy and M&A. Secondments also prove a popular choice, with about 90% opting to spend one of their seats with a client or in one of HSF’s international offices.
The corporate department distributes its trainees among four specific subgroups, all with M&A at their core. Across the department lawyers specialise in areas such as TMT, energy, manufacturing and consumer products, and in 2013 helped BSkyB buy rival O2’s customer accounts, making it second only to BT in the UK broadband market. Other recent highlights include representing Lloyds on its £550m sale of Scottish Widows to Aberdeen Asset Management. The “really, really busy” group suits those up for a challenge – one source described the level of responsibility as “through the roof” and got a kick from taking control of smaller matters on their own. For another, the most exciting work had perversely come when “assisting supervisors with the more boring elements of interesting deals,” like drafting board minutes, managing due diligence on companies, and helping draft articles.
The compulsory disputes seat can be spent in any one of nine sector-focused teams, which cover “the full spectrum,” from fraud to media to financial services. It’s one of the most hardcore disputes teams in the country (and the world, says Chambers Global), with 54 partners and 281 other lawyers, and many of the trainees we spoke to originally applied to the firm to get a bite of some of the meatiest cases around. HSF recently defended Bernie Ecclestone against allegations of fraud and bribery surrounding the sale of F1 shares. For trainees, there’s a fair bit of billing clients and preparing bundles, but they stressed that the department is “very good at encouraging trainees to go to court,” even for cases they’re not working on themselves.
Trainees told us they can get a “lot of exposure to human rights work” in the department. LGBT and torture issues tend to prove “particularly interesting” and come about as a result of having a “very active pro bono department.” Apparently a previous trainee even had the chance to go to Jamaica and advocate in a trial over there. In general, pro bono “isn’t considered less important than other work” and is a “good opportunity to take on more responsibility.” Quite a few trainees trot down to the Whitechapel legal advice clinic once a week, taking on a mix of housing, employment and contract dispute cases. “It takes up quite a bit of time but is rewarding if you can get results for the clients,” one told us. Others had helped teach GCSE languages, mentored promising but underprivileged kids, and helped out with workshops hosted at the firm’s offices.
The finance department is comparatively small when pitched against the mammoth corporate and disputes groups, though Matthew White adds that the finance group is working “absolutely flat out” thanks to improvements in the economy at large and the resurgence of lending activity across various sectors. The department recently advised the government of Nepal on the development of a number of hydroelectric power projects, drawing on the firm’s expertise in the energy sector. It’s split into four distinct seat options: general and acquisition finance; energy, natural resources and infrastructure finance; restructuring, insolvency and real estate finance; and debt capital markets, securitisation and structured finance. According to our sources, “everyone does a bit of general banking finance” too. Sources suggested that being a smaller department there's “much more responsibility in this seat.” One had liaised with local counsel in Ghana on energy projects, while another said they’d “met with clients all the time” and attended “lots of signings and the parties after deals closed.”
In real estate there’s the chance to “run low-value matters yourself,” corresponding with clients, taking care of small licences and handling property management. On big-ticket deals, such as the development of a 200,000 sq ft office and retail complex above a West End Crossrail station, trainees help by conducting doc review and proofreading contracts. Those who’d sat with the real estate disputes team had worked with clients such as Standard Life, which owns a string of shopping centres across the UK, and Farnborough Airport after it became embroiled in a row with local residents over the effect of noise pollution on house prices. Other cases tend to revolve around commercial landlord/tenant disputes, and trainees had frequently been to court.
The employment group offers opportunities in pensions or incentives, as well as core employment cases. The teams do a fair bit of transaction support but also win work off their own backs. Since “a lot of the work involves small matters that can be turned around within a week,” it’s a good place to see things through from start to finish. Like employment, the competition, regulation and trade seat also mixes contentious and non-contentious matters. Though the department only takes on a handful of trainees at a time, don’t be fooled into thinking matters will be comparatively small fry. The group recently advised Royal Mail on the competition and regulatory aspects of its controversial IPO.
Sources who'd opted for a client secondment had ended up at huge organisations across the energy, telecommunications and banking industries. One of the few gripes sources had about the Herbies training contract was that “there isn’t an awful lot of client contact,” so secondments are a good way to “make contacts and get exposure to some pretty senior business leaders.” If you’d rather go abroad, then you can draw on HSF’s network of offices around the globe. Of course, you’re expected to “pull your weight” wherever you go, though when London trainees move out to places like Singapore together, there can be a bit of a “back to uni feel” about the experience, with “weekend travel balancing out all the hard work.” Perhaps out of necessity, word has it the firm hands out a pack on respecting local laws and how not to get arrested.
“I think that HSF has carried a slight chip on its shoulder because it’s not seen as a magic circle firm,” one trainee admitted. “Our disputes team is globally recognised, and our finance and corporate groups are City-strong, but luckily for us the firm hasn’t lost the humility associated with not being one of those exclusive five.” Trainees described their peers as “down to earth, sociable and not overly competitive,” and found partners “involved and easy to talk to.” That said, there were some muffled suggestions that certain departments – litigation especially – can be quite hierarchical at times.
Such gripes were quickly forgotten, though: “Team socials take place every six weeks or so, and they are great levellers,” sources told us. “Departments really take time to get to know their trainees.” New joiners “take the social side seriously,” organising trips away together and going for drinks in Exchange Square or nearby Shoreditch on Friday evenings. The firm plays its part by organising a trainee ball every two years, most recently held at Kensington Rooftop Gardens, and there is “a whole programme of other events put on throughout the year.”
With around 150 in the ranks, it’s not a huge surprise that trainees are “quite a mixed bunch. People come from all over the world – it’s quite unusual in a top firm to not just see a line of white faces.” One trainee said it looks as though HSF is currently trying to recruit heavily in India, putting this down to the fact that there are no international firms there: “It makes sense to have a strong base of lawyers to help Indian clients from London.” The firm currently funds flights and accommodation for Indian students who win a place on the London vac scheme – a nod perhaps to its longer-term intentions.
What trainees do have in common is the ability to withstand some pretty gruelling hours at times. Though there are no official targets, you might get “slammed for a couple of weeks” when approaching a trial or exchange. “They’re appreciative when you work hard,” though “it’s very much a team effort; you never find yourself slogging away on your own.” If you do stay late, the firm forks out for dinner in the canteen or a takeaway. “It’s always better to go for the takeaway option,” one trainee advised. “You get more money that way, and if you’re staying until 2am you’re going to need some serious snacks.”
Towards the end of their second year, trainees are issued with a list of vacancies for NQ jobs, kick-starting the qualification process. Only some departments interview, but “everyone has a fair shot, whether they’ve sat with the team or not.” As with everywhere really, it’s not considered a particularly nice process, but sources suggested the firm “does everything it can to make it as pleasant as possible.” In 2014, 79 of 89 trainees accepted NQ positions.
While some feel the firm carries a “slight chip on its shoulder because it’s not seen as a magic circle firm,” there are also big pluses about joining HSF: “Partners take their role of nurturing us very seriously,” reflected one source, “and the trainees are also very close – we’re not at each other’s throats fighting over work to boost our status.”
Vacation scheme deadline: 31 October 2015 (winter), 16 January 2015 (spring and summer)
Training contract deadline: 15 January 2015 (final-year undergrads and graduates), 31 July 2015 (penultimate-year students)
Each year HSF receives around 1,000 applicants for its 100 training contracts. Whether applying for a vacation scheme or shooting straight for a training contract, all applicants go through the same process. The firm requires a minimum 2:1 degree and 340 UCAS points, though it does on occasion consider 2:2s under mitigating circumstances.
The application form is a mix of closed and open-ended questions. Graduate recruitment partner Matthew White encourages applicants to be truthful and talk about things that generally interest them. They should also “draw attention to any situation where they’ve led in some way or taken responsibility.”
All applicants are asked to take a situational judgement test, and those who succeed go on to complete verbal reasoning and logical reasoning tests. About 70% of candidates pass the benchmark score and qualify to have their application screened by the firm's HR team. The team then invites around 200 training contract applicants and 350 vac scheme hopefuls to the firm's assessment centre.
HSF's assessment centre lasts between four and five hours, and involves a group exercise, a case study presentation and a competency-based interview. Current trainees warned that applicants should expect to be “put through their paces.”
The group task usually involves some kind of negotiation exercise. The presentation, meanwhile, sees candidates given a case study to consider before discussing it with partners. A current trainee recalled how their case involved a client seeking to set up a joint venture. “They asked me how I would approach the task and which departments I would get involved. It felt like they were teaching me at the same time as challenging me.”
White suggests candidates “try to keep an open mind,” at this point. “Think creatively while using common sense. Don’t pretend you know something when you don’t, because we’ll see through it very quickly. It's much better to talk the interviewers through your thought processes and try to show your potential.”
HSF holds vac schemes in winter, spring and summer: the winter and spring placements are two weeks long, and the summer schemes are three. Each one sees attendees visit two departments during their placement.
Matthew White highly recommends that hopeful trainees apply for a spot: “My preference is to recruit as many trainees as possible through the vac scheme, as it allows us to get to know candidates better and allows them to make an informed decision about whether they wish to work here.”
Roughly half of trainees enter the firm this way. The firm offers 100 places, and around 80% of vac schemers generally obtain a training contract.
The scheme features various presentations and set exercises. Attendees sit alongside a senior associate or partner, and generally spend their time proofreading, preparing research notes and drafting letters.
There are plenty of opportunities to socialise with other vac schemers. “They try to get you drunk at every opportunity!” joked one current trainee. In addition to these drinks events, each scheme has one 'secret event' – past experiences have included a class at an underground cookery school and a trip up the Shard.
At the end of their placement, participants sit down for an informal, 30-minute interview with a partner. Here they discuss what they’ve learned and whether they’re still interested in becoming a trainee at HSF. This inevitably feeds into the final decision, though White stresses that feedback from supervisors ultimately holds the most weight.
His advice for impressing? “Be interested, enthusiastic and outgoing. We place a lot of importance on written work, so use that as a chance to show off your technical and intellectual strengths. Prove that you have the potential to make a very good lawyer.”
Over the years Herbert Smith Freehills trainees have insisted the firm's in-house advocacy unit is “unique to us.” This is not entirely accurate, but we do agree it's unusual. The unit, set up in 2005, comprises an in-house group of barristers and solicitors – including two QCs and a solicitor advocate – who handle the firm’s courtroom advocacy and advise on case strategy. The unit handles all fields of general commercial litigation, with a special focus on international arbitration, banking disputes, conflict of laws, employment, property, general chancery, fraud, and professional negligence.
Trainees can apply to do a seat with this “very outgoing and gregarious” group, and we reckon it’s perfect for anyone who’s ever entertained the notion of becoming a barrister. There’s a lot of research and case preparation involved, and trainees get a solid grounding in courtroom strategy and presentation. Those with experience here told us that being able to see cases from an advocate’s perspective "is fantastic.” The only snag is that it's a hugely popular seat, so competition for spots is fierce.
Herbert Smith Freehills has not been the only firm to show an interest in South Korea's capital, but what has drawn firms to set up shop here, and what impact will it have?
South Korea's liberalisation of its market mirrors similar moves across the region of late: Singapore, Malaysia and Myanmar have all begun opening their doors to foreign enterprise. Historically law firms have been barred from establishing offices in South Korea, but in recent years the country has negotiated Free Trade Agreements (FTAs) with its key trading partners. These FTAs permit an extensive liberalisation of trade in both goods and services, enabling law firms to offer their services and eventually compete with their South Korean counterparts from offices within the country.
It's easy to see foreign businesses' attraction to South Korea. It's the world's 12th-largest economy and Asia's fourth biggest. The forecasts around its growth and potential are often optimistic: it's considered a 'Next Eleven' economy and is expected to grow at the same rate as Brazil or Russia over the next twenty years.
The only dent in South Korea's otherwise glossy armour is its proximity and periodically volatile relationship with North Korea – a point that impacts on its credit rating and can make long-sighted investors wary.
Originally big in the shipbuilding, automobile and mining industries, South Korea is today best known for its commercial expertise in the high tech industries – think 'South Korea' and it's highly probable that HDTVs and mobile phones pop into your head. Seoul is, after all, Samsung's headquarters, as it is for other well known conglomerates (or chaebols in local dialect) like LG, SK Group and Hyundai. As its prosperity has improved, the country has become more of an outbound economy.
For law firms like Herbert Smith Freehills, which already advises Korean clients on the international aspects of their transactions and disputes, having a base in the country makes reaching clients and attracting new ones a much easier endeavour. However, it will take some time before foreign firms are able to offer advice on domestic Korean law. Modelling itself on Japan's earlier precedent, South Korea has set up a three-phase framework that requires foreign firms to ease themselves into the legal market gradually. Initially, foreign firms apply for and receive regulatory approval to open a foreign legal consultant office (FLCO) – in this capacity they are restricted to offering advice on the law of their home jurisdictions, though they can also assist on the international aspects of certain matters.
As of June 2013, The Lawyer reported that 20 US and UK firms have received regulatory approval to open an FLCO in Seoul. There are some recognisable British firms on that list –Linklaters, for example – but more American firms make an appearance, including Paul Hastings, Cohen & Gresser, Baker & Mackenzie, McKenna Long & Aldridge, K&L Gates, and O'Melveny & Myers. The most commonly cited reason for this is that there are simply far more American lawyers with Korean heritage than British ones, giving US firms a linguistic and cultural advantage. Still, foreign firms face challenges regardless of their origins. Adapting to a new cultural and regulatory landscape is tough, and there's the possiblity firms could face a higher tax rate on their fees, a consideration many will keep in mind, particularly if they're used to servicing South Korean clients from Hong Kong, where tax rates tend to be lower.
It stands to be seen how attractive foreign firms will prove to both Korean clients and the domestic lawyers these firms hope to recruit to bolster their ranks. As a general rule, Koreans tend to conduct business with those they've managed to build close relationships with, or failing that, those they've been introduced to via that they respect. Some of South Korea's top law firms, including Bae Kim & Lee and Lee & Ko, reported double-digit growth in 2012, a testament to their ability to maintain a loyal client base and simultaneously add new clients to their books.
Of course, the three-phase system may play into the hands of foreign firms, many of which have the option of networking with Korean clients via trusted alliance partners. It's also worth noting that South Korea is a burgeoning outbound economy, packed full of wealthy investors looking for international business opportunities, and so it makes sense for these clients to opt for a firm that can advise on both domestic law and the law of the target jurisdiction under consideration.
The shifting legal market in Seoul reflects a broader trend of liberalisation in markets across the globe. The success of a country's liberalisation is invariably tied to an intricate web of factors that includes historical developments and ingrained cultural principles. It will be interesting to see what Korea's legal landscape will look like in 2020, when firms will have had a chance to truly compete.
The privatisation of Royal Mail in 2013 saw banks and law firms slated for the role they played in undervaluing the business. The share offer, pitched at £3.30 a pop, was 24 times oversubscribed. Within hours it had soared to £4.55 and at its peak crossed the £6 mark. Papers reported that the taxpayer had been royally screwed, and Vince Cable was heralded a laughing stock.
Still, it was a deal that paid the involved firms well –Freshfields reportedly earned £1.8m for its role advising the government. Meanwhile, Slaughter and May advised Royal Mail on the restructuring, Herbert Smith Freehills acted as principal competition and regulatory advisers to the company, and Linklaters advised underwriting banks Goldman Sachs and UBS on the IPO. The deal was a complex one: £37.5bn of Royal Mail’s legacy pensions liabilities had to be transferred to the state (including around £9.5bn deficit), and the company’s balance sheet had to be restructured before it could float on the London Stock Exchange. It was hoped that this restructuring and subsequent floating would help relieve Royal Mail of its excessive pension costs and cut the company’s debt by around £1.08bn.
The general public did not view the initial decision to privatise Royal Mail favourably, and the revelation that it had been undervalued simply added further fuel to an already-smouldering fire. But why was the deal so controversial in the first place? Well, a mere mention of the word privatisation inevitably throws people’s minds back to the days of Margaret Thatcher, who privatised British Airways, BP, British Gas, British Steel and British Telecom. Her successor John Major then capped this off with the privatisation of British Rail – the sale of Royal Mail has been touted as the most significant privatisation since that event in 1993.
Critics of such privatisations argue that public services should remain state-owned to ensure they are operated in the public’s best interest at all times, though there is certainly an argument to be made that privatisation encourages services to be delivered more effectively as a result free-market competition. Whether this will be the case with Royal Mail remains to be seen, but the fact that the company is now trialling a Sunday delivery service in London suggests it is at least keen to embrace change.
If Royal Mail’s privatisation was considered controversial, then the privatisation of the NHS is a noose by which politicians can easily hang themselves. An estimate in 2014 suggested the number of private contracts already being advertised amounted to a value of nearly £6bn. While some argue that the privatisation of the NHS would necessitate the service being dismantled altogether, others hold that tendering for any work is a way of subtly privatising the NHS through the back door. In Bedfordshire, for example, the NHS has asked various NHS hospitals, charities and private companies to suggest the best way to deliver all its musculo-skeletal healthcare services for the next five years – the bidder who can offer the best services at the lowest cost will inevitably win the deal.
Opening up the NHS to competition in this way has provided new work for firms with strong healthcare practices –Capsticks, for example. In 2013 the firm assisted Circle Healthcare (a private healthcare provider) with its successful bid to provide clinical services at the Nottingham Treatment Centre – the first hospital franchised to an independent provider in this way. Capsticks advised the company on its contract with the Rushcliffe Clinical Commissioning Group, along with the staffing arrangements and transfer agreements for the project. Again, whether this increased competition will pay off for the taxpayer, or simply mean that integral services become profit rather than patient or customer-led, cannot really be foreseen at this stage. For law firms, though, privatisation can only mean one thing: more work.
Herbert Smith Freehills