East meets West at KWM, an international firm that offers classic City practices and an increasing amount of overseas opportunities.
Goodbye to Berwin
The 2013 tie-up between London-based SJ Berwin and Hong Kong-headquartered King & Wood Mallesons gave the legal world its very first Anglo-Asia-Pacific firm. The 31-office behemoth advises on Chinese, Hong Kong, English, EU and Australian law (legacy Mallesons was an esteemed Aussie firm and merged with King & Wood in 2012). As KWM's website notes, its primary focus is “connecting Asia with the world, and the world with Asia,” though trainees at the firm revealed: "This is maybe taking longer to materialise than planned. At the moment our Asian footprint is mostly in China, but management is looking at how to incorporate other Asian countries so we can increase the inbound and outbound workflow." In spring 2015 KWM opened a base in Singapore to increase its access to South East Asia and India. Insiders believe a stateside partnership is “the next logical step, though probably not for a few more years so that the merger can settle first.”
Because training contract applications are made two years in advance, the firm's current trainees initially applied to SJB, a firm cast in the yuppie-obsessed 1980s and known for its sharp elbows. “I bought into their go-getting, new-kid-on-the-scene vibe," one told us. "I liked the idea of this young entrepreneurial firm muscling into the establishment.” Our interviewees agreed that that ambitious streak remains intact but did note that “the image we promote now is friendlier, more colourful and modern than SJB ever had. The whole cut-throat rep is gone.” They also detected a shift in practice area dynamics since the merger: “Private equity was the cornerstone of SJB, but now there's a greater focus on attracting blue-chip clients and listed work. It's a good thing we're getting work from different avenues – it means other departments will be able to grow.”
Some recent departures and arrivals might shed some light on this shift. In 2014 London lost two key private equity partners to DLA Piper and Proskauer Rose, and a further blow was dealt when corporate co-head Richard Lever left in 2015 to set up a private equity practice at Goodwin Procter. The firm's litigation head and a handful of corporate associates recently defected too. On the plus side, KWM has onboarded 14 lawyers from Eversheds since 2014 (most are real estate lawyers, and half are partners), plus a corporate crime whiz from Addleshaws, and two projects partners from Linklaters and DLA Piper.
Despite these ebbs and flows, corporate and finance work remain king in London, though the firm's litigation, real estate and energy divisions are no small potatoes. Chambers UK singles out KWM's mid-market M&A and litigation work as top of the crop in London, and the firm's investment funds and private equity practices score highly on a nationwide basis. Heaps of other areas receive nods, from real estate finance to IP to competition. Trainees revealed that KWM is currently operating on an “80/20 goal: 80% of each office's work should be local, while 20% should be derived from referrals made from other locations.” Our sources noticed “significant Asian inbound investment from China, Singapore and Malaysia in particular,” as well as “a lot of recommendations coming from Australia.” According to one, “they're really pushing the idea of mobility – tons of associates have been moving between offices recently.”
Wanted down under
Trainees must complete two corporate seats and a contentious one. Our trainee sources called these requirements “rigid” but appreciated the range of options in both categories. The merger has opened up opportunities for overseas seats. The firm's recently added overseas seats in Sydney and Hong Kong; these join existing seats in Paris, Madrid, Frankfurt, Luxembourg and Dubai. “They're really keen on people going, a lot more so than when I joined,” said one second-year. Client secondments, meanwhile, are “few and far between – there's usually just one or two per rotation for 60-odd trainees.”
The international funds department is split between “those who do normal fund formation and those who do secondaries work, where clients are either acquiring or selling portfolios,” sources tell us. The team handles a mix of private, hedge, listed, real estate, infrastructure and debt funds, and you'll find big names like Triton, Patron Capital and Castle Alternative Invest on the books. London lawyers recently collaborated with their French colleagues on a €2 billion fund-raising for Antin Infrastructure's second European brownfield infrastructure fund. Our interviewees loved “the young, casual vibe of the department,” and told of nailing their drafting skills “on a wide range of agreements, including deeds of adherence and the main limited liability partnership agreement.” On the secondaries side, trainees typically contribute to international due diligence reports and lead enquiries on discovery calls.
Real estate work is divided between acquisitions and disposals of large portfolios, and ongoing leaseholder work for large institutional investors. Clients here include the likes of AXA, The Crown Estate and British Land – the team recently advised British Land on its £3.2 billion joint venture with the Government of Singapore Investment Corporation, which now owns Broadgate, the 30-acre site surrounding Liverpool Street station. On large transactions, trainees can expect to find themselves managing data rooms, collating deeds, preparing certificates of title, proofreading documents and running errands. "There's more responsibility on small-scale leaseholder work – this is when you're drafting licences of alteration, negotiating leases with partners at regional firms, and in general getting a lot of client contact.”
Over in corporate, there's team A, which focuses on real estate deals and public M&A, and team B, which specialises in private equity transactions, "though there's more and more public work here.” The latter group recently advised Baupost, one of the world's largest hedge funds, on its £150 million acquisition of assets from the RBS Special Opportunities Fund. On such hefty matters, “there's typically a partner, two associates and two trainees, so your role is pretty administrative – you draft board minutes and manage the completion checklist. But on small deals you work with just a partner and get to draft things like shareholder agreements."
It's not easy being green
The litigation group handles commercial, fraud and banking disputes, as well as arbitrations. The diverse client list ranges from telecoms giant Sky and rating agency Standard & Poor's to investment firm Morgan Stanley and tyre manufacturer Michelin. Still, the firm's flair for finance tends to come to the fore here: a big highlight in 2014 was representing the liquidators and administrators of The Connaught Income Fund, who brought £104 million worth of claims against the fund's operators, including one of unlawful promotion to investors. Trainees here revealed: “It's difficult to get involved in such high-level work, as it's so complex.” That said, amid their bundling duties they still found opportunities to draft witness statements, write memos and collate info for case management conferences.
Energy, resources and infrastructure is “at the forefront of KWM's plans," insiders revealed. "They want to create a leading project finance team in the City, as evidenced by our recent partner hires on this front.” Australian investment firm Macquarie is an important client for the department: lawyers recently helped the fund acquire a £370 million gas turbine plant in Wales and another in Lancashire, which it bought from EDF Energy for £170 million. Trainees here reported a mix of “regulatory work, where you have to look into the structure of the electricity market, and deal work, where you manage corporate transactions.” One told us: “It's the most commercial department. You really have to think about where deals will happen in the future and how we can win clients in anticipation of that.”
The EU, competition and regulatory group handles merger control matters, CMA investigations and cartel issues. It's recently been tied up defending Qantas in a multi-jurisdictional cartel case involving 20 defendants and thousands of claimants. The damages claims ran into the billions, and raised issues of conspiracy and liability of cartel participants. “It's one of the more academic seats,” a trainee said. "There's a lot of analysis of complicated EU regulations and how those affect clients down the line." Interviewees who'd sat here described responding to regulator requests for information and drafting due diligence reports on competition issues for international investors.
Each department at KWM has its own programme of training for trainees, with most front-loading sessions in the first week and “following up in the next few months.” Trainees get the lowdown on their performance during mid and end-of-seat reviews, and receive a grade at the end of each seat: red (“very dangerous”), amber, green or silver (“exceptional”). “Most people get green.”
Are we there yet?
The KWM takeover may have stamped out SJB's more aggressive side, but it certainly hasn't quashed its enterprising foundations. “Everyone here is so ambitious and entrepreneurial. I think we're all motivated by the amount SJB managed to achieve in such a short period of time and want to take that success forward." This vaulting ambition “doesn't create a negative culture, though; it just means the firm attracts lots of big personalities and wheeler-dealer types.”
As a trainee, "it helps to be outgoing and talkative" to deal with this assertive working culture, our sources pointed out. "The partners expect you to be confident, ready to take the reins and able to work all the strong characters here. There's a lot of pressure to do a good job and get it right. No one wants to be accused of being the weakest link.” A strong constitution is also a must when it comes to the demanding hours. “Tons of clients are international, and accommodating time differences can be challenging. It's generally what you'd expect from a City firm – if you're overly concerned about work/life balance, I wouldn't suggest coming here.” Real estate reportedly requires “regular midnight finishes,” while the unpredictability of corporate work is that “it can wear on you. It could be 4pm and something comes in, and then you're in the office for the rest of the evening.” Fortunately, senior lawyers keep an eye out for trainees. One source recounted a time when “I was exceptionally busy and the associates on my team re-delegated my work. People do care about you.”
In keeping with KWM's entrepreneurial spirit, trainees are strongly encouraged to network. At the time of our calls our sources had recently attended a 'Big Guns of Funds' mixer as well as an “igloo-themed do where each of us was asked to bring three similar-aged contacts in the City to the firm to mingle.” It's not all client schmoozing, though; trainees have their own firm-sponsored drinks event up on the “glorious” roof terrace every three months.
Qualification at KWM is a rather formal affair. “Each department has an interview process. This could be a simple chat or a very technical interview, and some require you to take a written test too.” Core groups like corporate, funds, real estate and litigation tend to have “plenty of NQ opportunities” each year, while roles in smaller teams like commerce and technology are harder to come by. Retention rates haven't been outstanding in recent years, and again only 21 of 37 stayed in 2015. The firm told us this is sometimes down to the vacancies not being in the desired departments, but that it is working on improving rates.
Seats in corporate team A, corporate team B, international funds, finance funds and indirect real estate (FIRE) all count as corporate. Litigation, property litigation, employment, IP, and EU, competition and regulatory are contentious.
You may also be interested in...
The other silver circle firms:
These major City firms with a strong international presence:
How to get a King & Wood Mallesons training contract
Vacation scheme deadline: 31 January 2016
Training contract deadline: 31 July 2016
When we asked our graduate recruitment sources at King & Wood Mallesons what the firm is looking for in future trainees, this is what we heard: “We want commercially minded candidates who are looking to get real responsibility right from the start of their career here.” An insider added: “You need to be proactive and ambitious, but not to the extent that you'll trample on people to get to where you want to be.”
The firm offers 30 training contracts a year, and is on the lookout for a minimum 2:1 degree. Look out for KWM at law fairs up and down the country – representatives typically attend around 20 (in addition to giving presentations at eight or so universities each year). The firm also holds a few open days each year for law and non-law students at its Queen Street Place headquarters in London.
The vacation scheme
KWM runs three vacation schemes a year: a two-week long placement at Easter and two two-week placements in the summer. Each scheme takes 20 students who spend their time in two different departments during the scheme. The pay is £310 per week, and it's worth noting that around 80% of each trainee intake is generally made up of ex-vac schemers.
Vac scheme hopefuls apply through an online form that covers a candidate's academic history and work experience, and asks a few questions on why they want a career in the law and what skills they can bring to the firm. The application also tests commercial awareness by asking about a recent news story.
“The form needs to be free from errors and well written,” says a source in graduate recruitment, adding “we like to see that candidates have held a position of responsibility or a leadership role, or that they've been part of a team that has functioned well.” It's also important to make your reasons for applying to the firm clear. Approximately 1,000 people apply for the vacation scheme each year, and around 8% are invited to an interview with a member of the graduate recruitment team and a managing associate. From here, the firm chooses who gets a place.
During the vac scheme attendees are mentored by three supervisors: a partner, an associate and a trainee. Typical tasks include basic drafting and research, and participants often have the chance to observe client meetings and even go to court. “We offer vac schemers real work in a real office, so be professional,” our graduate recruitment source advises. “Show us who you are – the different departments will be looking to see if you're someone who will work well within the team.” Vac schemers also attend several 'know-how' training sessions, and in their final week they have a training contract interview.
The firm arranges a number of merry social jamborees over the course of the vac scheme. In recent years these have included sushi making, cocktail making, bowling and ping pong.
The training contract application
On top of those who apply for the vacation scheme, the firm receives another 1,000 or so direct applications for its training contract. The application form is exactly the same as that for the vac scheme, and between 50 and 70 candidates are asked to a first interview, which takes place with a member of the grad recruitment team and a managing associate. Applicants are also given a tour of the building by a trainee.
Those invited back for a second interview are given a case study and asked to give a ten-minute presentation on it to two partners. Interviewees face questions on their presentation, as well as some competency-based inquiries meant to test their commercial and analytical skills.
More on the KWM SJB merger
On 1st November 2013, the legal industry witnessed a merger first: London's plucky silver circle upstart SJ Berwin joined forces with Hong Kong-headquartered King & Wood Mallesons. The result? The first Anglo-Asian firm, complete with 2,700 lawyers and 30 offices spanning Asia, Australia, Europe, the Middle East and North America. SJ Berwin, founded in 1982 by Stanley Jack Berwin (who had previously founded Berwin Leighton Paisner) was especially known for its private equity panache and uncompromising approach. King & Wood Mallesons, meanwhile, was the result of a 2012 tie-up between Hong Kong's King & Wood and one of Australia's finest, 'Big Six' firm Mallesons Stephen Jaques.
A move East was not always on the cards for SJ Berwin: its attention was once firmly fixed on the US. Previous managing partner Rob Day explored merger options with both Orrick and Proskauer Rose in 2010, before briefly courting Mayer Brown in 2012. Then KWM's silhouette rose on the horizon. “It was a completely unique proposition,” graduate recruitment partner Nicola Bridge told us in 2014. “The growth potential in the Asian market is incredible.”
The advantages were clear. The deal would give SJ Berwin a more robust funds offering in Asia, and boost its broader finance and litigation practices. The new firm's Swiss Verein structure also proved appealing, as each legacy firm could maintain its own profit pool while operating under the same branding and strategy. With both firms eager to one day crack the US, their combined strength could potentially prove more attractive to a stateside partner.
SJ Berwin would have to sacrifice its name and branding though. Commentators in the legal press began to posit SJ Berwin as a junior player in a global operation, and speculated over the impact losing the brand would have. Some suggested that the loss would have little effect, as several key client relationships were tied to prominent corporate partners – like Steve Davis, Richard Lever, Tim Wright and Ed Harris – rather than just the firm's name.
However, all of those partners mentioned above have now moved to US firms or other large international outfits in London. The office also lost its litigation head, as well partners in its regulatory and IP teams. In addition, a July 2015 review of the firm's UK partnership saw 15 individuals given their marching orders. Further tension was reportedly caused as pricing arrangements were standardised across the platform: London lawyers apparently found Chinese clients' budgets much tighter than anticipated.
Yet there are reasons to be optimistic. The firm's global revenue in 2014 rose by 3% to $1.03 billion, while in London it increased by a robust 10%. Collaboration is on the up too: the number of matters that drew in lawyers from at least two parts of the network grew by 130% compared to 2013. Key clients like Macquarie and GE are beginning to use the firm in all jurisdictions as well. While some important figures were lost in London, others were gained. In summer 2015 a private equity partner joined from Fried Frank, as did three projects partners from Linklaters and nine real estate lawyers from Eversheds. You lose some, you win some.
Global managing partner Stuart Fuller has made it clear that KWM is not desperately seeking a US suitor. For now, the focus is on integration and collaboration across jurisdictions. What's more, the firm now has some serious competition at its heels: in 2015, the ever-ballooning Dentons announced its intention to merge with China's biggest legal shop, Dacheng, to create the world's largest law firm, with over 6,500 lawyers. Other firms, like Mayer Brown and Baker & McKenzie, haven't opted for the merger route, but have entered into joint ventures and associations with Chinese firms instead.
Private equity made public
Private equity work was a big deal at SJ Berwin, which frequently topped the private equity league tables for volume and value of buyouts across Europe, and even won the award for Private Equity Team of the Year in the Financial News Legal Awards the year it joined forces with King & Wood Mallesons (2013).
Private equity funds are investment funds that use investors’ money to buy out privately or publicly owned businesses. The funding for these acquisitions typically comes from a combination of the investors’ money and bank debt (making it a ‘leveraged buyout’ or LBO). The types of companies invested in come from virtually every sector of the economy, and most generally need fixing in some way or other. Once in the private equity firm’s stable, a company is known as a ‘portfolio company’. A private equity house will typically spend three to five years improving a company before making an ‘exit’. Exits are typically structured as a sale of the portfolio company to another company or investment fund, or as an initial public offering (IPO) on the stock exchange. If the latter route is taken, the company becomes public (possibly once again).
Venture capital, a subset of private equity, was a particular strength of SJB – and continues to be a strength at KWM – earning nods from Chambers UK for many years now. This type of work sees venture capital firms invest in start-up companies and then sell them to a private equity firm or take them public.
Since the merger, some of legacy SJ Berwin's key private equity partners – Steve Davis, Richard Lever, Tim Wright and Ed Harris – have jumped ship. Their departures were significant due to the notable client relationships they'd cultivated with the likes of Lion Capital, Terra Firma, Duke Street and Lloyds bank. As a result the firm slipped a bit in the Chambers UK rankings moving from band one for venture capital in 2011 to band three in 2014. The department is now also smaller in size.
However, KWM is in the process of rebuilding its private equity practice and in July 2015 hired a partner from Fried Frank. Time will tell how KWM's post-merger reshuffle will impact on SJ Berwin's once solid status as a private equity hotshot, but for now, take a look at some of the firm's recent work highlights in the area:
Interview with graduate recruitment partner Nicola Bridge
Student Guide: What is KWM's strategy for the next few years?
Nicola Bridge: We see it from the point of view of the overall KWM business: we've always said that our vision is to create a unified, top-tier global firm which is headquartered in Asia. However, we still look at the strategic positioning of the business and our history in Europe and the Middle East. We're aiming to be a top-tier corporate-concentrated practice in those regions, while also being the firm of choice for Asia-related matters. All in all, we'll be continuing to grow across Asia, while also strengthening our practice locally and regionally, across Europe and the Middle East.
SG: Has KWM opened any new offices in those key jurisdictions?
NB: Asia is certainly a central component of the firm's operations, and we've recently announced a new office opening in Singapore (which focuses on corporate and funds work). From a more local/regional perspective, we strengthened our presence in the Middle East last year – we were already in Dubai, but we opened up in Riyadh. Future expansion is always going to be driven primarily by our clients and the new markets and practice areas that they want to see us in.
SG: Is KWM actively pursuing a US merger?
NB: It's just pure speculation at the moment. At the tail end of last year, one of our senior funds lawyers, George Pinkham, relocated to New York and took a managing associate with him, in order to service funds clients from there – that may have started the rumour mill. We've always acknowledged the US market as a very important one: we have a good relationship with many US firms, and we have many clients who need expertise in that jurisdiction. We aim to provide services to global clients, but we're not aiming to compete for US work in that particular market.
SG: Which practice areas should we watch out for in the future?
NB: We're aiming to build up our corporate department, certainly. Over the past year we've made 17 lateral partner hires in EUME [Europe and the Middle East], and they have joined a wide variety of teams: we've had people joining litigation, real estate, commerce and technology, energy and infrastructure, private equity, finance, and employment. So that covers a wide range! Corporate is an important area for us, but we're not looking to grow it at the expense of other practices: we'll continue to hire in all areas when we spot good candidates that we'd like to bring on board.
SG: How are London's practice areas evolving in light of the merger with KWM?
NB: We've certainly seen a big increase in clients who are interested in exploring opportunities within Asia. We've also seen lots of referrals around all parts of the network. We compiled some figures at our year-end, and we found that for the third quarter of 2014, the total number of new matters that had been brought about as a result of joint work had increased by 200% compared to the same period the year before. We've been seeing lots of cross-border work as a result, and there are many more opportunities to work with colleagues in other jurisdictions.
SG: Is the merger between SJB and King & Wood living up to internal expectations?
NB: It is always challenging when you have a big organisation like this, but it has gone very well. We have the '100 person' programme – it's our global secondment programme. It's our aim to have 100 people within the KWM network working abroad in one of our offices at any one time. In my own team, we have two associates over from Australia, one for two years and one for a year. We have quite a few partners moving around too: we have some London-based corporate partners in Hong Kong and China. We also have Mike Wang from China in London.
We have lots of associates moving around, and we're very keen for them to take advantage of the opportunities to work abroad. It makes a difference: learning about other offices, their work streams and what their practice areas are like. We've put our associates in 'buddy groups,' and we mix them up with associates in other offices and put them in touch with one another, which is working really well. On the work-front, since the merger we've got on a lot more global panels and have seen an increase in the amount of cross-border work we're doing, so it's been very positive so far.
SG: There have been quite a few lateral hires and departures over the past year. Do they reveal anything about the firm's future plans or priorities, or is this more in the realm of opportunistic coming and going?
NB: It's normal attrition and hiring. Another factor is this: once a big merger takes place, you'll find that headhunters are all over people, as they think it's a time of flux and change. It often happens when a firm has done something dramatic and exciting – some people look again at the firm and think 'shall I give this a go or shall I try something else?'
SG: Are there any highlights from the past year that you'd like to draw our readers' attention to?
NB: The opening of the Singapore office is definitely one. We've also had one client that we've been advising, and that work has involved teams from Germany and China, as well as about eight different practices, so that's a good example of how we seeing people collaborating on matters.
SG: Will the number of overseas secondments for trainees increase in the years to come?
NB: We've got about 11 trainees across the firm participating in a transfer programme at the moment: we have two trainees from London just about to leave for Australia, and we have two coming back. We're also starting a secondment to Hong Kong on the next rotation as well. In the future we would like to offer secondments to mainland China as well, but it's a bit more challenging because of linguistic requirements and ensuring that all SRA requirements are met.
Our trainees are also interested in doing client secondments. Whenever we have a client who expresses an interest, we try to offer a relevant secondment. Opportunities tend to be more ad hoc; we might have trainees going for a year or something like that. Often the clients' needs vary, so they don't always want a trainee, or they may need maternity cover, or maybe a client has a big deal on and they require some extra assistance. The placements often change at each rotation.
SG: Given KWM's aims and its culture, what are you looking for in future trainees?
NB: Enthusiasm goes a long way! That's enthusiasm not just about a future career in the law, but for life in general. When I'm interviewing, I'm always looking to see whether this person will be a team player – it's important to understand the value of making others look good too, not just yourself. And a good level of common sense can go a long way too. We sometimes see some very bright candidates, but they don't have much in the way of common sense, while that's important too.
In light of our global position, we wouldn't want to force anyone to go abroad, but if people were interested and would relish the opportunity, we would love for them to do it. Being commercially-minded is a factor, but students always worry about how they can show that they are. Sometimes they get too stressed about it, and often all we need to see is that they've held down a job and understood how the business operated and what its priorities were. They don't have to worry so much!
King & Wood Mallesons
10 Queen Street Place,
- Partners 94
- Assistant solicitors 175
- Total trainees 65
- Contact Graduate recruitment team
- Email email@example.com
- Website careers.kwm.com/en-uk
- Method of application Online application form
- Selection procedure Video interview / face to face interview / case study
- Closing date for 2018/19 31 July 2016
- 2016 Spring and summer vacation schemes 31 January 2016
- Training contracts p.a. 30
- Applications p.a. 2,000
- % interviewed p.a. 10%
- Required degree grade 2:1
- Training salary
- 1st year £39,250
- 2nd year £43,500
- Holiday entitlement 25 days
- % of trainees with a non-law degree p.a. 50%
- Post-qualification salary £63,000
- Overseas offices Over 30 offices across Asia, Australia, Europe and the Middle East.
Main areas of work
How to apply