Glowing financial results and growing geographies mean it's cheers all round at Lavanda, A&O's very own bar and terrace...
“I was attracted to A&O by its banking and geographical strengths,” one fairly representative trainee told us, although while banking is a big part of Allen & Overy's business, it is by no means the be-all and end-all. The global finance world's bounce-back in the years since the Great Recession helped A&O report record results in July 2014 – profits were up 7% in 2013/14 to £532m, with turnover 2% higher at a neat £1.23bn. “A&O has a big presence in China – with offices in Beijing, Shanghai and Hong Kong,” another trainee pointed out, trying to explain the glowing financials. Geographic expansion has indeed continued apace, helping to drive growth. Last year we reported new offices in Hanoi and Ho Chi Minh City; this year Myanmar is the latest pin on A&O's map of the world, bringing the total up to 43. At the same time, A&O has undergone a massive streamlining operation in the past few years. In a headline-grabbing move, it shifted its European and US support staff to Belfast in 2011. Improved efficiency and cost-savings are paying dividends. The Support Services Centre now employs some 350 staff.
Such is the importance of Spitalfields-headquartered A&O's international network of offices – and cross-border nature of much of its work – that many trainees spend the last six months of their training contract abroad. “Most go all around the globe – Dubai, Washington, Shanghai, Moscow, Paris...” The list seems almost endless. Many of those who stay at home for their last seat will go on client secondment, although some will miss out either through choice or because their desired destinations were too popular. “I was delighted to get my secondment – international opportunities were one of the reasons I joined the firm. I understand that a few people were pretty annoyed that they didn't get theirs, or got a client secondment they didn't put down.” Nevertheless, opportunity knocks even louder for the most globally minded, because there are usually “a dozen or so NQ jobs across the international network” each year.
Generally, though, interviewees spoke very positively about seat allocation. “The best thing about the training contract is the ability to work in any department I wanted to work in. Seat selection is very good. I got all my first-choice seats.” A couple of months before the end of their accelerated, A&O-tailored LPC, future trainees attend a fairly comprehensive open day, a bit like a careers fair, in which the various departments set up a stall each and showcase what they have to offer. “You also get a brochure from HR which describes the various groups and subgroups. You then submit a form noting down groups you're interested in and HR will then allocate people's first seats.” Three or four months into your training contract, you'll sit down to discuss your next two six-month seats, one being your 'priority seat' and one your 'request seat'. Sources praised this process as people usually get what they want. Furthermore, you can specify a subgroup and even a particular trainer (as supervisors are called here) – maybe you've heard good things about them, or met them at the information day and felt you 'clicked'. “They're very good at getting you where you want to go,” reiterated one junior. “By and large everyone gets what they want,” confirmed another.
A&O has two intakes each year, one in September and one in March. While there are lots of seat options on offer, as you'd expect in a magic circle firm, each trainee must do seats within two of the three core practice groups: banking, corporate and international capital markets (ICM). From 2014, they can do two banking seats rather than one. Other options include litigation, real estate and tax. There are some three-month seats, although they're rare: “You can do three months in litigation, then three months somewhere else like banking [litigation], pensions, environment – niche areas – but they do change a lot.” Trainers tend to be senior associates and, less often, partners.
The giant banking group is subdivided internally into different 'B' teams, each with its own number. We won't list them all here, but B2, for example, is structured and asset finance (like aircraft and ship financing), which is now separate from B3,which is leveraged finance and general lending. B4 is restructuring. You get the idea. A trainee might ask to do a banking seat and will be put into one of the Bs – or they might request a specific subgroup in advance. Banking clients include lenders like Barclays, HSBC and Goldman Sachs, borrowers like Marks & Spencer and advertising conglomerate WPP, and financial sponsors including CVC, Charterhouse, Cinven and HgCapital.
On a typical deal, said one interviewee, “I got to go to lots of internal meetings, and all-party meetings to discuss the terms of the financing. Towards the end of the deal I co-ordinated board minutes, and went to the client's office for the day to review documents with another firm.” Another trainee told us: “I spend quite a lot of time liaising with counsel and local parties, and circulating documents. You spread yourself over two or three deals. It's nice to deal with other jurisdictions.” Occasional travel abroad is one perk we heard about in a banking seat. Trainees described banking as “very, very busy” – a good thing for getting more responsibility “out of necessity, because trainers are so swamped! Mine gave me a lot of drafting, got me involved in internal discussions, let me loose on clients.” Another did “extensive drafting of documents I'd never seen before, for my trainer to review.”
Corporate subteams are similarly divided into numbers. C6 in particular is one to watch right now, as half of what it does, private equity, is an area “the firm is investing in heavily” (the other half of C6 is oil and gas work). For example, it recently brought in a heavy hitter from Ashurst, Stephen Lloyd, to co-head the group, as well as other lateral partners. General M&A is the bread and butter for corporate lawyers, and sources spoke of the usual peaks and troughs in this type of work. “I had a fair amount of client contact and was taking calls myself towards the end of it. The amount of work goes up and down. When there's a lot going on people expect you to pull your socks up and be there. When it's quiet you can leave.” Another experienced “high-level work” in this seat –"I was thrown into the fire on a big transaction. I worked on four or five different things. There was a lot of drafting work and client contact, drafting memos based on research, legal documents – generally I felt I was contributing.”
Among many notable work highlights, lawyers in the Paris office (located next to the Arc de Triomphe) advised French multinational Vivendi on the €17bn sale of its phone unit SFR to European cable group Altice. In another highlight, A&O advised on the complex £3.4bn loan and bond refinancing for broadcast transmission provider Arqiva, a transaction which involved partners in departments including banking, corporate, ICM and tax. Lawyers in London, Germany, Romania and the US recently advised Romanian state-owned electricity company Electrica on its dual listing and IPO on the Bucharest and London stock exchanges.
With over 450 lawyers worldwide, A&O's ICM practice is huge too, and trainees for the most part enjoyed their time here. Clients like Bank of America Merrill Lynch, Deutsche Bank, Credit Suisse and Citibank benefit from brainy legal advice involving concepts like derivatives, securitisation, structured finance and intercreditor issues – if, like our chancellor George Osborne, the question 'what is seven times eight?' makes you break out into a cold, silent sweat, then probably best to avoid this one if you can. Thankfully, said one trainee, “my trainer was great and has kept in touch throughout my training contract.”
Quite a few avoid doing a formal litigation seat, racking up their 40 hours SRA-required contentious experience in pro bono matters instead. Employment is a popular team –"very competitive but they fitted us all in. It's a smaller team, so you get more exposure to each other's working styles. The hours are probably better than in the transactional teams because there's less business-critical work where you have to find a deal and it must be done tonight. By contrast, employment follows tribunal dates so it's easier to plan ahead. You get work requests from all of litigation in a general email, and you can chip in ad hoc on anything if you're not busy. But generally you only do work for your subteam.” Other litigation subteams include arbitration (where “people can have wildly different experiences”), finance/regulation, commercial litigation and intellectual property. “You're better valued as a trainee in transactional groups,” some found. “Litigation is hierarchical – trainees do bundles and legal research. You can't really have trainees running round and sending emails. There is a lot of copy checking, bundling – not stuff you can give to a secretary, but not the most exciting legal work.” Litigation is a strategic priority for A&O, so expect to see further growth here in the coming years. In one recent case, the firm acted for private equity firm CVC in a dispute over monies owed following the onward sale of a beer company to Molson Coors.
When it comes to appraisals, trainees get a “very helpful” mid-seat informal review –“it's good to hear where you stand before the formal end-of-seat review.” A 'buddy' in your first six months “mostly answers silly questions like how to turn on the computer.” Trainees update their 'record of experience' as they go along, ticking off the types of work each department does as they do it. They're graded between one and five at the end of each seat, one being the best and five the worst. “It's good to show progress, but some trainers never give more than a three, while some always give one,” we heard, although “there is a meeting between partners to iron out inconsistencies. There's trainee gossip about more lenient departments, but the system works.” In reviews, trainers “give input, and advice about what to focus on in the next seat.”
And what of those notorious magic circle hours? “When I started I thought 'how will I ever do such long hours?' But the days go so fast a lot of the time. You work on quite interesting stuff, so you're happy to see it through to the end. Plus, the rest of the team is there with you.” There were rumours of sleeping pods, whose existence was confirmed by more than one source: “Yes, I've seen them! There are four, like tiny hotel rooms, with a single bed and en suite bathroom.” People can take time off in lieu (known as TOIL) if certain mega-hours and “business targets” have been met, but more commonly “lots of departments operate a discretionary system.” Most interviewees regularly worked well into the evening every weekday, sometimes past midnight, but equally felt able to leave much earlier (5.30pm or 6pm) during quieter times. “A&O is good at distributing work evenly, so the week after a really hard shift I was given less work. Some trainees can get quite stressed, but everyone's part of a team and the firm does look for resilient characters.”
Is it all work and no play? “Before I started I thought people would be driven, high-achieving, but they're also normal and sociable.” A&O's very own café/restaurant-by-day, bar-by-night, Lavanda (whose name may or may not be a pun on the lavender plants on its terrace), is ever-popular. As the office has “one foot in the City, and one in Shoreditch,” there are tons of hipster pubs, bars and restaurants nearby, including The Gun, and The Water Poet. This year's trainee ball was in the "jungle room" of the Barbican Centre (a hidden gem, we can assure you), while various sports and arty things (like a choir and theatre) are available for those so inclined. The basement gym is a “social hub,” as is the “mini sports hall” which hosts things like football, badminton and classes like spinning and “boxercise.” However, “the tennis club seems to have more social functions than actual games!” A&O has long-established pro bono links with Toynbee Hall and Battersea Legal Advice Centre, among other places. And in 2009 the firm launched its 'Smart Start Experience' for underprivileged Year 12 students to sample a week in A&O's office.
In 2014, 82 of A&O's 99 qualifiers stayed with the firm.
Training contract deadline: 31 December 2014 (law); 31 July 2015 (non-law)
Vacation scheme deadline: 31 October 2014 (winter 2014); 31 December 2014 (summer 2015)
This firm seeks high-flyers, no question. As such, Oxbridge-educated trainees are a dime a dozen, though there are plenty of people at A&O who elude this categorisation. In our sample of trainee interviewees we came across a number of people from Russell Group unis as well as institutions abroad. The current intake has trainees come from over 40 universities.
While insiders agreed “there's no typical A&O trainee,” many pointed out the firm is not a place for slackers. “There are certainly enough people to hide behind, but you won’t be rewarded for it.” Likewise, a shy personality won't do you any favours. “People are extremely personable and most can hold a conversation with anyone. That's something they keep an eye out for during interviews.” Chatty Cathys, take note.
A good way to get an insight into who fits in is by attending an A&O open day, which is “kind of like a vac scheme in a day.” Students can attend workshops, shadow trainees and, perhaps most importantly, get tips from insiders on the interview process. Learn more about how to apply for a spot here.
All applicants fill out the online assessment form. If their application is successful, the next stage (whether for a vacation scheme spot or a training contract) is an assessment day with two one-on-one interviews. The first is based on a case study, on which candidates give a short presentation to the interviewer, and the second interview revolves around their application form.
Of the case study interview, one source recalled: "Mine was a set of documents that I got 30 minutes to read over. They don’t go easy on you, but it’s not as though it's confrontational. They want you to succeed.” Our sources advised applicants to “prepare for it just as you would any interview – read the news, be ready to talk about what’s going on in the industry and really think about why you’re applying here.”
A&O receives around 5,000 applications for training contracts and vacation schemes, and interviews around 10% of applicants. The firm recruits 85 trainees a year over two intakes, March and September.
There are about 60 vacancies across the summer and winter vac schemes. Students get £250 per week and work with a trainer (a partner or associate).
During the vac placement, schemers have an appraisal with their trainer – an opportunity to discuss strengths, development areas and career goals. Then there's a training contract interview at the end of the placement. Assessors take into account your performance on the vac scheme and this interview.
Vac schemers are assigned a trainee buddy and usually sit alongside a qualified lawyer for their three-week visit. "You spend one and a half weeks in one department, and the other one and a half weeks in another," said a source, who told of attending client meetings during their placement.
Alongside this supervised work are workshops and talks on various practice areas and key skills, as well as other negotiations and presentations. Around 12 vac students in the summer vacation scheme in 2015 will be able to work in one of four international offices for one week. Past destinations have included Dubai, New York, Hong Kong and Frankfurt.
Every now and again, a senior partner at a distinguished old firm is hit by a sudden flush of nostalgia. Perhaps he passes a fresh-faced trainee in the corridor and is reminded of his own youth. ‘What larks I had!’ he thinks. ‘No cares and responsibility to weigh me down. No equity points to accrue or leadership battles to fight. The whole world ahead of me. What a joyous life that young trainee must lead! If only we could swap places…’ The trainee, meanwhile, is looking the other way and thinking: ‘It must be great to be a senior partner! You can do what you like. No qualification worries, no sucking up to superiors. If only we could swap places…’
Anyway, the usual upshot of all this is that the senior partner gets to thinking about his own training back in the pre-BlackBerry age, his old supervisor ‘Spiffy’ Jenkins, the pretty secretary who became his wife etc., and decides that it’s about time someone wrote down what life was like at the firm in the good old days before everyone who remembers it has died out. A book is commissioned and sits proudly in the firm’s library, where nobody reads it.
Except us. Some years ago we procured a copy of Allen & Overy: The Firm 1930 – 1998, a 105-page history by lawyer-turned-journo Humphrey Keenlyside. It’s a lot shorter than A History of Freshfields (which you can find reviewed elsewhere on this site) because A&O is much younger. This is all to the good because it means A&O: The Firm is less reliant on centuries-old documents and instead has plenty of anecdotes and information about the founding partners and big characters from people who knew them personally. It’s actually quite entertaining.
Here’s a summary of the best bits.
Inauspicious beginnings: the founding of A&O
On the last weekend of 1929, two men dashed from their old firm, Roney & Co, with a cab full of client files. One was the darkly handsome George Allen; the other Tom Overy, who had the sort of face that scares small children. Their personalities were as different as their appearances. Allen was an austere, tidy man who “rarely smiled, and if he did, it looked like a forced smile.” By contrast, Overy was warm and approachable, had a “puckish” sense of humour and his desk was a mess, “piled high with papers.”
It’s possible the two men left Roney & Co because they were effectively carrying the rest of the partnership (it was later claimed that the pair were doing 80% of the work for 20% of the profits), but there was little prospect of them progressing as equity partnership status at Roney was only available to family members. But that was not uncommon in those days, and a more mundane reason for their departure might simply be that Sir Ernest Roney couldn’t afford to pay them their salaries.
The abdication crisis
A&O’s reputation was solidified as a result of George Allen’s role as adviser to His Majesty during the abdication crisis of December 1936, when Edward VIII sought to marry divorcee Wallis Simpson.
The job came about through serendipity. During World War I Allen served in France and saved a wounded officer by dragging him to safety from the trenches. That officer was Walter Monckton, a leading barrister and founder of Monckton Chambers, which still exists today.
Monckton and Allen subsequently struck up a friendship, and it was this relationship that would give Allen & Overy its big break over a decade later. “One of Walter Monckton’s contacts from his days at Oxford was the then Prince of Wales. That connection resulted in Monckton being appointed legal adviser to the Prince in 1932. When asked by his royal client to recommend a personal solicitor, Monckton had no hesitation in suggesting George Allen. As events unfolded, the advice that George Allen was called upon to give turned out to be far more than the drafting of wills and the handling of property matters. He became one of King Edward VIII’s inner circle during the abdication crisis of December 1936.”
Allen was eventually needed to advise on the terms of possible Bills to be put before Parliament to allow the abdication to go through; to help with the drafting of the abdication speech; to help draft the agreement under which the Duke of Windsor (as he became) was to receive an income from the Crown or the Civil List; and to seek Counsel’s opinion on whether the Duke could legally be physically prevented from returning to the UK. At one point the King was on the telephone to Wallis Simpson and asked Allen to write on a piece of paper the exact words he should say to her. Sweet nothings were obviously not Allen’s forte. He suggested the King tell Simpson: “The only conditions on which I can stay here are if I renounce you for all time.”
Anyway, it all turned out for the best: “George Allen stood like a stone wall during our worst hours,” the couple would say later. “The story goes of the time when two articled clerks [the old name for trainees] were called upon to witness a document signed by Edward. While waiting nervously to perform this simple task, their hands became so sweaty that they rubbed them on the wall to dry them off. For years afterwards their dirty handprints remained as a stain on the wall. Even when the offices were decorated, the hand smudges were left, almost as a badge of honour.”
The 1930s: the firm progresses
Allen & Overy’s offices at Finch Lane gradually filled with new hires. Hours were reasonable: 9.45am to 6pm in the week, and to 1pm on Saturdays. It sounds like a pretty hard-working place all the same, though. Tom Overy’s favourite catchphrase was ‘Where would you be if I didn’t drive you?’“The two senior partners would have their underlings carry their bags for them – exactly ten paces in front… a young solicitor, Garth Wilkinson, was dismissed summarily by George Allen for choosing to play cricket one Saturday rather than coming to work; and one drink too many at lunchtime which resulted in him being late for a meeting with a client accounted for Raymond Shingles at the hands of Tom Overy in 1939.” Wilkinson went on to become ICI’s in-house lawyer in India, while Shingles eventually became a senior partner at Linklaters.
Exclusive: Tom Overy peed in sinks
“[When future senior partner Geoffrey Sammons] did start his articles it was a further year before he met George Allen, an encounter which took place in adjoining urinals. The conversation went thus: Allen: ‘What’s your name?’ Sammons: ‘Sammons, sir.’ Allen: ‘Oh, yes. I knew your father.’ End of conversation. The opportunities for meeting Tom Overy in the urinals were even fewer; it was his eccentric practice to use the washbasin in the wardrobe behind his desk.”
There’s not a lot you can add to that really, is there?
The 1940s: post-war profitability
Billings in 1947 were £100,000, half of which was pure profit. George Allen and Tom Overy earned nearly £12,000 that year, making them rich men at a time when you could live more than comfortably on £500 a year. The firm expanded from its original offices in Finch Lane into overflow buildings on Old Broad Street and Threadneedle Street. New royal clients came on board, among them the Duke of Kent, the Maharajah of Jaipur and the Princess of Bihar.
As Atlee’s new Labour government set about creating the welfare state and nationalising Britain’s core industries, A&O found itself negotiating for steel companies, shipbuilders, repairers and more.
The 1950s: the founders fall out
It is quite possible that George Allen and Tom Overy were never particularly close personal friends, but they got on well as business partners. That is, until the summer of 1951, when the time came to draw up the conditions of their retirement and the future of the firm. Suffice it to say that the two had very different ideas on how things should be run, and what started as minor disagreements degenerated into bitter and personal attacks. They did end up making some kind of peace in 1953, but by then Allen was about to retire. He went on to set up his own consultancy, Gallan Consultations, but died just three years later.
Five years younger, Tom Overy carried on… and on… and on. “He started behaving strangely and unpredictably.” Fellow partners started to hint that it was time for him to retire, but Tom was oblivious. In November 1960, he suffered either a nervous breakdown or temporary mental illness and was certified under the Mental Health Act and taken to St Andrews Hospital, Northampton. In his absence, the partnership deed was re-executed, removing him from the ranks of the partnership.
On his return, Overy was distraught at this treatment, writing: “I am staggered by your attitude to me having suffered three and a half months’ great cruelty. I got away from Northampton expecting to receive the help of my partners. It is not money I want, it is merely a life that will continue my association with a firm I love and helped to found.” The reality, however, was that Tom Overy was no longer fit to work: “A sad end to a great career.” He died 13 years later at the age of 80.
The swinging 60s
By 1960 A&O was known as one of the top firms of solicitors. In fact, the magic circle as we know it today was pretty complete: Slaughter and May, Linklaters & Paines, Freshfields and A&O were considered the big four. Links and Slaughters led the way for corporate work, but A&O had a good litigation practice. After Tom Overy’s retirement, a triumvirate of partners took over, though in reality only one of these called the shots. Jim Thomson was fiercely ambitious, an incredible client-winner and widely regarded as one of the finest commercial lawyers in the City.
The age of the generalist lawyer was ending, and carving out a niche was more in vogue. The focus in this era of the firm’s history was on the corporate side of the business. Two big client wins in the 60s were Rupert Murdoch’s News Group and The Grade Organisation. A&O helped Murdoch with his first acquisitions in the UK: The News of the World and The Sun. At the close of 1969 the firm had 20 partners, a staff of 217 and five thriving departments: commercial; conveyancing; litigation; probate and trusts; and tax.
The 1970s: testing times
A curious A&O policy saw the firm hire female solicitors from other firms but only take on male articled clerks. One applicant, whose first name was Jocelyn, got as far as interview only because A&O assumed she was a male Jocelyn. “She was rapidly ushered out and told the firm would put her in touch with a family law practice.” Charming.
A&O only got with the times and took on its first female articled clerk in 1971, after she “sent in an application letter, simply signing her name with her initials and not putting in ‘Miss’. It was assumed that the person applying was the son of [famous banker] Sir Julian Hodge. However, once she came to interview, the panel applauded her initiative and offered her articles.”
The unexpected death of Jim Thomson in 1971 sent shockwaves through the City and caused the chairman of one bank to predict: “That will be the end of Allen & Overy.” Nevertheless, the firm carried on, and the atmosphere softened under the new regime. “It no longer became out of place to continue to call a colleague by his first name after he had been made a partner.”
It’s clear the 70s were a transitional period for A&O, as many of the old guard retired and a new generation came through. It was also the decade when the firm first started its international expansion, with an office in Dubai opening in 1978 to support the construction of many new airports springing up in the region. A Brussels office followed later that year.
The 1980s and 1990s: into the modern age
The Thatcher government’s programme played to A&O’s strengths, with lawyers advising on many headline projects including the Channel Tunnel negotiations with the French and the development of Canary Wharf. The firm continued to prosper thanks to a boom in banking and international capital markets, and between 1976 and 1986 turnover increased from £3m to £20m. The firm also doubled in size between 1985 and 1990 as the network of international offices expanded further.
A new senior partner, Bill Tudor John, came to power in 1994 and shook things up once again. “A four-page memo from one of the partners setting out suggestions as to how he should conduct his senior partnership and demanding a response to no fewer than 27 points was swiftly returned with the words ‘f*** off’ scrawled on the top of the page.” The success of the business replaced the traditional character of the partnership as a top priority. In short, how much money partners made became the most important thing. Five partners were shown the door, and others were warned they would follow if their performance did not improve. This was also the era when fee earners started to work longer and longer hours.
The book comes to an end in 1998. A sequel, A&O at 75, was published in 2005, but for now you’ll have to search that one out for yourself.
Allen & Overy LLP
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