This 125-year-old City megalith expects nothing but the best.
Slaughter and May's reputation as one of the most prestigious and profitable firms in the world is hardly unjustified. This magic circle thoroughbred upholds an unfaltering commitment to excellence, and draws in the biggest and the best deals out there. Unlike other magic circle firms, Slaughters hasn't embarked on a rampant, and sometimes perilous, programme of international expansion into every continent, favouring instead a 'best friends' relationship with a network of top corporate firms around the world. As such, it still has access to a bevy of multi-jurisdictional matters without the costs and risks that come with opening offices in volatile markets. That said, Slaughters' global footprint isn't invisible – the firm has offices in Brussels, Hong Kong and Beijing, in addition to its London HQ.
The reputation of the firm's corporate department is second to none, and it works with more FTSE 100 and FTSE 250 clients than any other firm out there. Slaughters was recently called in by Vodafone to help with the sale of its 45% stake in Verizon Wireless to Verizon Communications. The £84bn price tag made this not only the largest US-based corporate transaction since 2001 but one of the biggest deals of all time.
Elsewhere the firm has been instructed by the likes of American Express, British Airways, Diageo, GlaxoSmithKline, Morgan Stanley and Royal Mail. The finance practice is another serious heavy-hitter, and it works with Citibank, Lloyds and RBS, among others. Graphite Capital recently called the firm in to advise on its £35m acquisition of London's Hawksmoor restaurants. Unsurprisingly, Slaughters picks up a slew of stellar rankings in Chambers UK, which rates it among the strongest firms in the City for banking and finance, capital markets, competition, high-end corporate, litigation, pensions, and tax.
If you've seen any of the firm's marketing materials, you'll have noticed its vague and slightly dubious tag line 'Great Minds Think Differently'. We took our insiders to task to see if they could explain what it means. “Essentially they're looking for strong lateral thinkers. They don't want people who will recite verbatim what they were taught in law school. It's about coming in with new ideas and finding new solutions,” one source said. Another added: “It's testament to the range and variety of skills they want us to develop. There's a great emphasis on us being multi-specialists – people who are equally confident working on a share purchase agreement, a joint venture or a corporate restructuring, should one land on your desk at a moment's notice.”
Considering Slaughters' corporate and finance clout, it should come as no surprise that a seat in both is mandatory. A considerable number of juniors will go on to a second six-month stint in one of these, and most trainees fulfil their contentious requirement by sitting in dispute resolution, though there are alternatives like competition. The firm also offers a small number of three-month seats like tax, pensions and employment, and real estate. And that's to say nothing of the overseas opportunities – a handful of third and fourth-seaters are despatched to places as far-flung as Hong Kong, New York and Australia to work in either a Slaughters office or one belonging to a 'best friend' firm. “They gave me all of the seats I requested, so I don't have any complaints at all,” said one source, and we heard similar things from all of the insiders we spoke to.
Four groups operate under the corporate umbrella, though our insiders were keen to stress that these divisions aren't indicative of any particular specialisms. “It's purely down to how the groups are staffed. Whichever team you sit with, you'll pick up an incredible range of work,” we heard. “You could be working on anything from private equity and capital markets to M&A and IPOs to joint ventures and debt funding. Slaughters doesn't limit itself to any particular sector – it could involve renewable energy or Polish vodka.” Recently the group acted for Bupa on its $355m purchase of Quality HealthCare Medical Services from an Indian healthcare group. Typical tasks for juniors include verification, research, due diligence and drafting ancillaries like board minutes and relationship agreements. “They don't put you in a straitjacket and tell you to do one kind of work. That can be very, very rewarding but also daunting at times. It's hard to get comfortable, and there's never any chance to rest on your laurels.”
In finance it's a similar story: there are three groups within the department, but whichever of these they find themselves in, juniors are involved in a whole host of matters. “We work very closely with the corporate practice, and a lot of the work is passed around – that's another facet of us being multi-specialists,” one source said. Deutsche Bank, Barratt Developments and the Manchester Airport Group are just some of the clients the group works with – it recently advised the last of these on the £1.2bn financing for its acquisition of Stansted Airport. Project finance, asset finance, debt markets, capital markets and restructuring were all areas our sources had been involved with. “Pretty much everything I worked on had an international element. There were deals coming out of Africa, Asia, the US and Europe while I was there. People play down the level of international work Slaughters does, but I really felt the force of it in the finance seat,” one trainee reported. Day-to-day tasks for juniors here include drafting board minutes, resolutions, director's certificates and parts of loan agreements.
In dispute resolution “a huge amount of regulatory investigations work has come through in the wake of the financial crisis, so that side of the practice is booming,” an insider told us. Elsewhere, sources spoke of working on commercial litigation, tax litigation, IP litigation and arbitrations, among others. Clients include BA, Royal Mail and Alliance Bank. The sheer size of the cases coming through means juniors are often left with some of the more menial tasks. “The majority of what I did was doc review. It was a case of reading communications for an investigation and collecting evidence. Five hours spent doing that each day isn't the most thrilling thing in the world, but then again the case was on the front page of the FT every day, which was exciting. I always knew more than the hacks.” A second source added: “All the proofreading and bundling I had to do felt worthwhile when I got to go to court. I also did some really interesting legal analysis.”
Slaughters' competition practice covers merger control and cartel work, as well as litigation, regulatory and state aid matters. “It used to be a support department, but it stands by itself now and is doing very well,” one junior said. “The nature of the work means you're interacting with the Brussels office all the time – it starts to feel like an annex of our office. Some trainees get to do a three-month stint there as part of the seat.” Juniors described their day-to-day chores as “quite dry” – there's a lot of data room management and sifting through emails and other communications – but said the legislation itself is “very cutting edge, very current and very interesting.”
Over in real estate, Slaughters' lawyers work with the likes of Arsenal, the Cabinet Office, Legal & General and ITV. The firm recently advised the Grosvenor estate on the sale of five mansions next to Hyde Park for a combined value of £114m. “It's a fantastic seat,” one trainee told us. “The group is much smaller than corporate, finance or DR, so you get a lot of responsibility. That means you could be taking the first cut at a document or fielding queries from a client directly.” Another source said: “It was classic real estate. I was helping out on the purchase and sale of some of the big buildings in the City. I attended a lot of client meetings and was drafting reports – I felt like more than just an expendable trainee.”
“Getting on one of the overseas seats is a more competitive process here than at other magic circle firms because we have far fewer offices,” one trainee told us. Still, around ten trainees in each intake are offered the chance to spend a seat abroad. Recent postings include Amsterdam, Brussels, Hong Kong, New York and Sydney. “It's not just a six-month jolly, particularly if you're going to one of the best friend firms – you're representing Slaughters, and there's a responsibility that comes with that. Nevertheless, it's a great opportunity, and the firm is very good at taking care of accommodation and making sure you're happy when you're out there.”
“There's a lot of talk about how punishing the hours here are, but the reality has been pleasantly surprising,” trainees agreed. Indeed, pretty much every source we spoke to said they never started work before 9.30am and that there are stretches when you're out of the door by 6pm: “Tie off, books down and you're done.” The bottom line, though, is that you stay until the work is finished. “There can be weeks – or months – on end when you don't leave until midnight, or later, and 9pm finishes certainly aren't infrequent, even when you're not gunning to get a piece of work done.”
Much has been made of Slaughters' slightly traditional ethos, but our sources were quick to do away with the suggestion that it's all tweed suits and college ties. “It's not the kind of place where you'd just stroll into a partner's office and start talking about the weather, but that doesn't mean it isn't still an amicable, open environment,” one insider said. “It's very academic. You see it in the conversations we have over lunch – they tend to be fairly left-field, involving the rule of law or a point of academic interest. There's not a lot of talk about the football results,” we heard. “But the things written about us on certain law blogs are rubbish. It's worth talking to someone who works here or coming in to visit. Then you can make your own decision.”
Ahead of the firm's 125th anniversary in 2014, trainees predicted a low-key affair in keeping with Slaughters' restrained manner. Other social ongoings include a book club, football and netball teams, bake-offs, and regular trainee after-work drinks, and “there's a black-tie party at the Grosvenor Hotel every Christmas. Apparently it's been the same for the last 20 years, but it's still good fun. Everyone from the London office is invited,” one source said.
Slaughters historically posts the highest retention rates of the magic circle. In 2014 it kept on 71 of 74 trainees. “The perception is very much that we'll get kept on if we want to stay,” our sources agreed. Qualification is reasonably straightforward: HR asks trainees to complete a list of departments they'd go back to (including a first choice, should the department wish them to qualify there) and a list of the departments they're not interested in. “Then they marry things up with the partners based on their preferences. Of course, if you want to go into a specific department the partners will already know because you'll have done some schmoozing beforehand,” one source hinted. “It's a good system – there's no bitchiness or in-fighting. It does take a while for it all to go through, but it doesn't feel like an undue amount of time.”
“Trainees share an office with either a partner or an associate. With the former you get the view from the war room; with the latter you're in the trenches. Either way you learn a lot.”
Vacation scheme deadline: 12 December 2014 (spring); 5 January 2015 (summer and September)
Training contract deadline: 31 July 2015
Applications to both the training contract and vacation scheme at Slaughter and May begin with a straightforward online form, plus a CV and one-page covering letter. “I just wrote why I wanted to join the firm and why I wanted to be a lawyer,” one of the firm's trainees recalled. “Keep it short and sweet, though it does need to be formal of course.”
“We don’t have set criteria demanding you have 3 As at A level,” a source in recruitment says, “but we do look for a strong 2:1 degree.” Our trainee sources agreed that “the Oxbridge influence is undeniable, but no one looks down on someone who hasn't gone to a top-ten uni.”
Slaughter and May starts receiving applications for its vac scheme in November, and it's worth getting in there early as the firm schedules interviews on a rolling basis. The scheme is aimed at penultimate-year law and non-law students.
Vac scheme interviews usually take place on campus – the firm assesses around 120 students this way. The interview takes place with a partner and an associate, and includes a discussion about a topical article.
The firm runs a week-long scheme at Easter, two three-week schemes over the summer for law undergrads, plus another three-week scheme in September for non-law students. There are usually between 18 and 20 participants on each of the summer schemes, and 22 or so in September. All vac schemers sit in a single department for the duration of their visit, and take part in various workshops and case studies. One major highlight is a day trip to Brussels.
Vac schemers have the option of interviewing for a training contract during the last week of their placement. The firm informs us they aren't given special treatment over direct applicants, however, and are also required to do the written examination direct applicants do during their assessment day (see below).
Training contract applications
The firm typically receives between 1,500 and 2,000 direct applications each year for its 75 to 80 training contracts. For the 2016 intake, around 175 students came to the firm for a day of assessments that includes a written exercise, an interview with two partners, a tour of the office and a short interview with HR.
According to the firm's trainees, succeeding during the assessment day involves “showing you can think laterally. They don't want you to repeat verbatim what you learnt at law school; they want new solutions and fresh ideas.” Our grad recruitment sources tell us the firm is particularly interested in those who demonstrate “the ability to show grit under pressure” and “a range of interests outside the law.”
Unlike the other magic circle firms, Slaughter and May maintains a minimal overseas presence. Its offices in Brussels, Beijing and Hong Kong are the only formal extension of the S&M brand. Instead of planting a flag in every nook and cranny the globe offers, Slaughters' international practice largely relies on a network of 'best friends' – that is, reputable local law firms in other countries that the firm's managed to establish links with. This network includes the likes of Bonelli Erede Pappalardo in Italy, Bredin Prat in France, De Brauw Blackstone Westbroek in the Netherlands, Hengeler Mueller in Germany andUría Menéndez in Spain and Portugal – not to mention a raft of other affiliated firms throughout Asia, Australasia and the Middle East.
Slaughters' website states that each firm in the group is: a market leader in its respective jurisdiction; has a formidable reputation in its own right; and is an authority in cross-jurisdictional best practice. Thus, according to executive partner Richard Clark, Slaughters "prefers to work with leading like-minded firms in other jurisdictions as it allows us to keep brand consistency and maintain our focus on excellence."
Trainees have the opportunity to go on secondment to one of the firm's own offices or to one of its best friends during the second year of their training contract. The nature of the best friends network means that “secondments are always shifting year to year as new ones are added and others deleted.” Trainees in recent years have spent time in Amsterdam, Auckland, Barcelona, Helsinki, Madrid, Milan, Munich, New York, Oslo, Paris, Stockholm and Sydney. Secondments typically last six months, though trainees doing a seat in the competition group have the opportunity to spend three months in Brussels.
To apply for a stint abroad, “you fill out a preference form listing the countries you'd like to go to along with a supporting statement explaining why. The firm then interviews you and speaks with the people you've worked with.” A source told us: “You're allocated based on availability, the reviews and work you've done previously: they regulate it to make sure everyone has broad range of skills. If you wanted to go away in your fourth seat, for example, you'd need to have already done a contentious seat.”
Judging by our research over the last few years, it appears that around a quarter of fourth-seaters try their hand overseas. Although insiders insisted “those who want to go away are usually able to,” there is no denying the trend of “people increasingly declining the opportunity to spend time abroad. Although it does vary year on year, application numbers may not be as high as at other firms.” Why so? One source had this theory: “I think people are worried about jeopardising their chances when it comes to qualification. If you go to a 'best friend' firm, you're not working at a Slaughter and May office; you're working at a completely different firm, so it might be better to have in-house experience. People don't apply speculatively.”
Those who venture abroad are well looked after. The firm takes care of all the practical arrangements for trainees, including flights, accommodation and work permits. While away, you're not cast adrift from the London office; secondees receive support and guidance, and benefit from an allocated supervisor back in London with whom they can discuss their progress.
One of Slaughter's own offices is in Hong Kong, where it's had a presence since 1974. “It's a much smaller office than London,” a trainee who spent six months there told us. “I sat with a partner who did a mix of finance and corporate work, and it's only about three-quarters of the size of the corporate department here. It was a fantastic experience, though. I got to draft some contracts – such as sponsorship contracts – and did compliance work for FTSE 100 companies that have a dual listing in Hong Kong and are concerned about not contravening the country's listing rules. So I did a lot of work on that side to make sure everything was fine compliance-wise.”
Those who spent time at one of Slaughter and May's best friends found the experience equally rewarding. “I was one of three trainees who was seconded to a firm in Auckland,” a source informed us. “When they've lined up a firm interested in having a trainee from Slaughters, you send over a short CV, and they allocate you into groups based on your previous experience. I had a really awesome six months. I was working in a small team with just a senior associate, a partner and me, so I was really in the thick of it. I worked on two public takeovers, which is a high percentage of the takeovers in New Zealand.”
One trainee who joined up with an affiliate firm in Italy explained that although the stint was “challenging,” the legal education they benefited from was “second to none. It was great – absolutely fantastic. Working for another law firm which is one of the top two or three in that jurisdiction is an invaluable learning experience. Essentially you're out there on your own – even though there is a support network – and doing your own thing. Most of their secondees are associates, so as an English trainee coming over you're treated as more senior than you are. I got good levels of responsibility and client contact. Sometimes I'd be the only English person in the office, and they'd make a point to involve me in the deals with English elements to them.”
Our source offered this sage advice to anyone who might follow in their footsteps: “You have to make an effort to learn the language, otherwise it’s a bit of a waste of time. Also, you have to be proactive in meeting people and letting them know you're there. As long as you're willing to work hard you will have a good time.”
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.
Slaughter and May
One Bunhill Row,