Herbies is a corporate and litigation powerhouse with a big international slant.
Go your own way
The Queen, Neighbours, driving on the left, righteous indignation over whether Marmite or Vegemite is better – Australia and the UK share a lot. And thanks to British firm Herbert Smith's 2012 merger with Aussie Freehills, they now share a top-class law firm too. Trainees at HSF's London base might not spend their weekends sunning on a Sydney beach, but they appreciate the many advantages to life at this fast-growing international firm, one of which is “how easy it is to get an overseas secondment – if you want to go abroad, you'll almost certainly get to.” With 23 offices housing 2,800 lawyers worldwide, Herbert Smith Freehills already rivals the magic circle for size; a recent pay bump for trainees and NQs has put it on level with these City competitors too.
But enough with the magic circle comparisons. The trainees we interviewed were plenty satisfied with their firm's standing in the market (as they should be – HSF wins upwards of 60 Chambers UK rankings, and a not inconsiderable number of them top-tier). “The magic circle tag isn't as relevant as it used to be," thought one. "It's more important to aspire to an international presence and an ability to serve clients across the world, both of which we have." That doesn't mean the firm's ready to slow down on the expansion front, though. "The merger positioned us as one of the top firms in Asia-Pacific, and we've been bedding down there as well as targeting the US market,” sources noted, pointing to the recent office openings in New York and Seoul.
With the trainee cohort pushing 150, seat allocation is no easy feat.Corporate and litigation are HSF's core practices, and trainees are expected to complete a seat in each (there are plenty of options, though – each department houses specialist teams like IP, tax, and M). Trainees submit eight choices to HR before each rotation, and while “it's a little opaque how they get doled out, people do tend to get what they want eventually.” That said, there aren't always enough contentious seats to go around: “A lot of people don't get a litigation seat until their fourth seat, or find that if they've already done one they aren't allocated another.” Some 90% of Herbies' trainees go on secondment, either in-house with a client or abroad. Stints in Tokyo and Hong Kong are particularly sought after, we hear.
Herbies' litigation team has historically been its crown jewel, and although it's losing its dominance as other departments grow, it's still a major contributor to revenue and a big source of prestige: Chambers UK top-ranks the practice within the 'elite' division (it's one of two in the City to get this accolade), and deems HSF's civil fraud and contentious construction teams among the best in the UK (and its financial crime team among the best in London). This formidable reputation for all things contentious draws in a steady stream of news-grabbing matters. Recent highlights include representing Bernie Ecclestone in a $145 million shares dispute concerning $44 million worth of bribes the F1 boss allegedly paid to get an undervalued price; acting for British American Tobacco in a high-value legal challenge to the UK government's plans to bring in plain packaging; and offering the Child Poverty Action Group free representation during its intervention in the judicial review of the government's planned benefit cap.
Trainees can sit with one of nine sector-focused teams, which between them cover everything from fraud to media to financial services disputes. A popular choice is the public law team, which has close links with NGOs like Liberty, and acts for a mix of public and private sector clients, including Arriva, Westfield and EDF. Sky-high stakes mean litigation trainees are often saddled with "quite a lot of admin and document review," though we did hear from some who'd "been assigned some small disputes to balance out the big-ticket cases – on those you get more freedom to try out drafting." Still, “the department is very hierarchical," and some found that "partners will often avoid directly interacting with you – one still didn't know my name after I'd worked for him for six months!”
The chance to combine trials with travel through the litigation seat in Hong Kong is a popular option. Because of the office's smaller size, trainees here have close access to partners and to an exciting-sounding social scene. “Trainees from other firms are in the same apartment block – it's almost like you're at university," said one. "We travelled loads and took frequent trips around the islands.”
The corporate department has four sub-groups for trainees to join, including M&A. This team focuses on high-end, cross-border transactions, like India's United Spirits' £430 million sale of deluxe whisky brand Whyte & Mackay to Emperador, and TSB's £1.7 billion sale to Spanish bank Sabadell. Other recent clients include Sky, Virgin and Coca-Cola. “I walked straight into a huge takeover when I joined," said a source. "I got stuck in working on the announcement straight away, and they even took me to the board meeting where they put out the offer.” Others told of “preparing for board meetings, managing the data room for the client, helping out with drafting ancilliary documents like powers of attorney, and working directly with partners to look at corporate governance issues.”
On the technology, media and telecoms team, it's mostly tech outsourcing work for multinationals like Telefónica O2. "On some deals I do a lot of admin and project management, but there are other responsibilities too, like using the client's instructions to amend documents,” said a source here. Over in the energy group, meanwhile, we heard from a rookie who was able to “get involved in a nuclear power station deal for EDF and draft important provisions in the contract from scratch.”
A few trainees were rankled to find out "your opinion isn't asked for at all” in the finance department. On the plus side, "it's a relatively small division, so there's more scope for responsibility; trainees don't just work on boring admin and billing." On the project finance side, lawyers work with banks to raise cash for heavyweight infrastructure and energy projects, like the Thames Tideway Tunnel, a £4.1 billion sewer destined to flow under London's streets, and the construction of the controversial Hinkley Point C nuclear power station, which will be Britain's first new plant in two decades. “It's a really challenging and rewarding seat," thought a trainee here. "I worked alongside partners and was able to contact the client directly – not many teams here allow trainees to do that.” Another spoke of “getting a lot of drafting experience and taking responsibility for tasks like collecting documents at every stage of the deal.”
Our interviewees found that “training is a pretty high priority for the firm." There's certainly a lot of it on offer, including “a really useful, very structured advocacy course” that all litigation rookies participate in. Trainees are also sent to a 'trainee development centre' for two days during their second seat: "There's a mix of fun activities like cocktail making and also more hardcore stuff like public speaking and understanding your personal brand.” Departmental training is, as one trainee put it, “quite high quality and not just gratitutious HR babble. Partners give you a lot of one-to-one guidance, and there are talks from visiting lecturers.” Guidance also comes during mid and end-of-seat reviews with supervisors. “The grading system is a bit funny – different supervisors will grade you very differently – but the in-depth analysis of your work is really helpful.”
The nature of the beast
Trainees were happy to report that HSF "is a place that embraces people's quirks and individual personalities. They don't try to fit you into a corporate mould; there are lots of different characters here." What they have in common is that "most are friendly and inclusive. The firm values a sense of approachability, and it's visible in the way that partners talk to you – they look out for you and ask about any personal issues you might have going on. And they thank you for your hard work."
On the whole, "long hours are standard," though "litigation is more tame than corporate or finance," sources agreed. "You'll have weeks of leaving at a reasonable time there before disclosure keeps you here late – and even then it's not usually beyond midnight." Transactional seats, on the other hand, "can require consistent stays into the early morning. You might not have a proper all-nighter, but the hours are silly all the same." One source told of "weeks of staying until 2am," while another reported "six weeks where I rarely left before 11pm." One interviewee felt that “partners don't always trust trainees to be adults and work from home effectively. I've been the only one here at 3am before.” Conversely, we heard from one who insisted: "There's never a feeling you're stuck here on your own; we're all in it together." In any case, trainees were looking forward to the 'agile working programme' the firm has recently been trialling. "The associates are absolutely glowing about it. Hopefully they'll roll it out across the whole firm.”
The firm organises plenty of opportunities for trainees to kick back (when they can find the time, that is). Annual trainee-only dos include a summer ball and Burns Night supper, and there are some lively departmental socials over the year, including the finance team's much-loved 'Advent Doors' event at Christmas: "Every day of December we open the door of a different office, and they'll have decorated inside. It's basically an excuse for a quick 4pm piss-up."
Sporty trainees are catered for with a host of teams as well as an annual ski trip, while less active types have the higher-brow option of “Wednesday evening film nights, where we get popcorn and watch small-budget indie films and documentaries.” Informal get-togethers often involve the attractions of nearby Exchange Square: “Drinks on the Square are a regular feature of Friday nights, especially in the summer. There's even a screen where they show the tennis when Wimbledon's on.”
This London hub is formed of two offices. “There's a bridge across, so it's essentially one building. People prefer Exchange Square because it's much lighter and all glass, whereas Exchange House is furnished with dark wood." Some sources felt the office “could maybe do with a lick of paint, as it feels a bit 80s,” though the recently upgraded canteen came in for rave reviews. “There's a sandwich bar now, and you can quickly grab a cake or pastry.”
In 2015, 71 out of 77 qualifiers took up NQ positions at HSF.
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How to get a Herbert Smith Freehills training contract
Vacation scheme deadline (2016): 31 October 2015 (winter), 8 January 2016 (spring and summer)
Training contract deadline (2018 - finalists and graduates only): 8 January 2016
Training contract deadline (2018 - penultimate-year students, finalists and graduates): 31 July 2016
Herbert Smith Freehills has a unique advantage among its competitors: twin lead offices in the UK and Australia. Their positioning at opposite ends of the earth (and in practically opposite time zones) has proven attractive to clients looking for a 24-hour global service.
Australia's geographical proximity to Asia – and its several shared time zones – means that the region is a natural candidate for the newly merged firm's expansion plans. Legacy Aussie outfit Freehills already had an office in Singapore, but post-merger there have been numerous additions in Bangkok, Beijing, Hong Kong, Shanghai, Tokyo and, most recently, Seoul.
The rush to Seoul
HSF was only the third international firm to launch in Seoul, setting a trend that would see many an ambitious player follow suit. It all started when South Korea decided to liberalise its market, mirroring similar moves across the region: Singapore, Malaysia and Myanmar have all begun opening their doors to foreign enterprise. Law firms have historically 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 to and periodically volatile relationship with North Korea – a point that impacts on its credit rating and can make long-sighted investors wary.
Moving in, moving out
Opening up in international markets is a tricky business, and firms are quick to close overseas arms that aren't profitable, or are otherwise at risk. Just as firms are rushing to the South Asian market, they're reconsidering their presence in the Middle East – and HSF is at the vanguard of this trend too, having closed its Abu Dhabi office in 2015. The region's once booming economy has faltered since the recession, thanks to falling oil prices and an uneven recovery of its property market. Faced with a shrinking pool of project finance and infrastructure work, Latham & Watkins is set to close both its Abu Dhabi and Doha offices by the end of 2015, relocating staff to Dubai in the process.
But a firm of HSF's size can afford to be flexible. As developing economies worldwide open up to foreign investment, there are a host of opportunities to choose from: and as a bumper round of partner promotions in the firm's Asia-Pacific offices show, the firm is more than ready to exploit them.
Privatisation and the law
On both sides of the globe, Herbert Smith Freehills is making a name for itself with headline privatisation work. In Australia, it advised the Commonwealth government on the high-profile privatisation of Medibank, formerly a government-owned health insurer. It was sold at the end of 2014 during an IPO worth nearly A$6 billion. And back in our corner of the Northern Hemisphere, HSF advised the Royal Mail on the regulatory and competition aspects of its privatisation.
This privatisation 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 £1.8 million 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: £37.5 billion of Royal Mail’s legacy pensions liabilities had to be transferred to the state (including around £9.5 billion 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 £1.08 billion.
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.
Over in Australia, privatisation is equally contentious. Former Prime Minister Tony Abbott initiated an ambitious programme of privatisation which has already affected medical insurance and electricity provision. Water, forestry, and other infrastructure resources are also tipped for sale to the private sector.
The short-term benefits for governments are clear: privatisations give them a quick injection of billions that can be used to fund other infrastructure projects or to manage their debt-load. They also argue that privatisation encourages services to be delivered more effectively as a result of free-market competition. But 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: in Australia, those who opposed the privatisation of electricity have highlighted the reality of soaring bills post-sale. In the UK, attention has focused on the potential threat to the NHS in particular.
But for law firms, privatisation means a bonanza of work that straddles corporate, finance, competition, regulatory and IP fields. Firms like HSF – with strong track records for advising governments – are more than ready to reap the benefits.
Herbert Smith Freehills
- Partners 481
- Total staff 4,773
- Total trainees 125
- Contact email@example.com, 020 7374 8000
- Method of application Online at www.herbertsmithfreehills.com/careers/london/ graduates
- Selection procedure Online application form, online assessments and assessment centre visit
- Required degree grade 2:1
- Closing date for 2015/16 vacation schemes Winter 31 October 2015 Spring/summer 16 January 2016
- Closing date for 2018 training contracts Finalists and graduates should apply between 1 October 2015 and 16 January 2016
- Training salary
- 1st year £42,000
- 2nd year £46,000
- Post-qualification salary £69,000
- Overseas offices Asia, Australia, Europe, the Middle East and the USA
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