Expect a heavily transactional experience in the “buzzing” London office of American banking and finance big-shot Shearman & Sterling.
Shearman & Sterling's reputation precedes it: it's a veteran corporate player in the States with remarkable clout in the banking and finance arena, and it's been around since 1873 (which makes it positively ancient by US standards). The London office is 45 years old and while it's approaching middle age, so far the only sign of a mid-life crisis is the M&A department's communal Nutribullet. Joking aside, Shearman's offering in the capital is rather healthy. London outperformed the rest of the firm revenue-wise during 2015, when it posted a 3% rise to $149 million. This followed 7% growth in 2014 and a whopping 20% in 2013. "The firm is BUSY," trainees confirmed. "The office is buzzing and it's exciting to be a part of it. It feels like we're becoming one of the big players among City law firms."
The Chambers UK rankings confirm the firm doesn't need a blender to be a smooth operator: the banking and finance, capital markets and corporate practices all garner heaps of praise. Deals are big and span the globe. The M&A team was recently involved in the Qatar Investment Authority's $1.8 billion investment in global real estate company Brookfield Property, and the pair's joint takeover bids for Songbird Estates and the Canary Wharf Group, valued at $8.5 billion.
Trainees were impressed by the fact that “Shearman competes in the same league as the magic circle firms and is at the forefront of cutting-edge deals, while the smaller intake means trainees get a bigger share of the work.” Our sources were clear on their motivations for joining: “I wanted to work somewhere with 100-plus years of experience in complicated M&A and finance work.”
Trainees at Shearman don't get a choice for their first seat, but our interviewees didn't seem to mind. Ahead of each subsequent rotation, trainees get to list preferences, and HR “figures out the best way to accommodate everyone.” Sources had really appreciated the chance to attend a “departmental fair,” where lawyers from different practice areas set up a stall and trainees go around the room asking questions before making their choices. Everybody's required to visit two of the three core departments (finance, project finance and M&A), and complete a contentious seat (litigation, international arbitration or competition) or attend a week-long University of Law litigation course.
At least four trainees can be found sitting in M&A at any one time. The department doesn't mess around, focusing on big-ticket, cross-border work (nearly all Shearman's deals have an international element). Recent triumphant transactions which lawyers advised on include Anglo-American telecoms company Liberty Global's $8.2 billion acquisition of Cable & Wireless. The firm also advised telecoms firm Altice on its $17.7 billion acquisition of Cablevision. Most of our sources had worked on private M&A deals and had found themselves “managing the flow of information and the data room, having exposure to every single work stream and running the due diligence process.” This involved “a lot of client contact, liaising with investment banks,” as well as “exposure to other departments like finance, IP and real estate. I also drafted bits of the articles of agreement.”
Finance trainees generally do a mix of leveraged and structured finance, the latter encompassing hedge financing and derivatives. One source told us: “It's hard for trainees to get involved at first because the work's more technical, so you start with proofreading.” Some had found this frustrating, admitting they “hadn't expected so much admin, and since it's a busy department people often don't have time to explain things to help you progress.” Still, with a little patience, “eventually I was able to draft hedging agreements [agreements entered into to offset financial risk] and I was running small hedging deals.” On the leveraged finance side, rookies flit through restructuring, refinancing and acquisition finance transactions. Dealing with conditions precedent checklists was a staple trainee task across all areas of finance. Trainees also reported eventually getting “lots of client contact – you're often asked to send a simple email at the beginning of each deal so you end up becoming the main point of contact for the client. Things are addressed to you, you get the phone calls, and you have to deal with that.”
“At one point I was dealing with ten jurisdictions."
It's worth noting that first and second-seaters found finance more rewarding responsibility-wise, whereas second-years who had come from advisory seats (see below) felt a sense of regression tackling the initial basic tasks of complex finance work. The finance team is friendly with all the City big hitters (think Morgan Stanley and Citigroup), and again there's a heavy emphasis on cross-border work, an insider reporting that “at one point I was dealing with ten jurisdictions, which required a high level of organisation.” Shearman recently advised a syndicate of 20 investment banks including Credit Suisse and Barclays on the financing of the $10 billion acquisition of American slot machine makers IGT by Italian lottery company GTECH.
Shearman splits its projects work into project development and project finance, but trainees are encouraged to experience both strands in a seat here. International oil, gas and energy projects dominate the department, which courts clients across the globe but specialises in emerging markets in particular. Most matters are confidential, but we can reveal that lawyers recently advised on the $5 billion development of a coal-fired thermal power plant in Kazakhstan, as well as acting as lenders' counsel on the development and financing of a $3 billion gas-power and desalination plant in Qatar. One source was buzzing from the seat, claiming to have had “a lot of responsibility above my level, essentially doing junior associate tasks and working to a crazy timeline. I saw a deal from start to finish, which is rare, and in the last couple of days I was managing the process alone and ended up closing the deal myself, with supervision.” More often, trainees join mid-deal and have to “hit the ground running.” One source notes that in projects “a trainee's role is less analytical and more about management and keeping on top of things.”
There's a whole world out there
Rookies who do a seat in one of Shearman's advisory practices – asset management, competition, employment, financial institutions advisory, real estate or tax – will often find themselves the lone trainee during their seat. These groups have their own clients but often act as ancillary support for the transactional departments. Take tax, for example, which works closely with the M&A and private equity teams, recently helping on the Liberty Global and Qatar Investment Authority matters mentioned above. Advisory seats tend to heat up around the time the government announces the budget and when it makes its autumn statement, as “clients want advice on how changes could affect transactions, structures and regulations.”
A seat in financial institutions advisory (ie financial regulation) is a “slower, more academic” affair compared to the hectic experience of a transactional seat. Typical tasks? “Research, writing memos, trawling through case law and European regulations, figuring out what legislation means and how it applies to the matter at hand.” Sources stressed that “the focus is on getting it right, and following through a thought process. It certainly exercises your brain, and because you're making new discoveries you feel you're at the forefront of the industry.” While the department is known for advising clearing houses, Shearman is keen to dispel the notion that this is all it does. For example, lawyers were recently involved in establishing an entire legal and regulatory regime from scratch for Abu Dhabi's international financial centre. “Yeah, that was a big job,” sighed one happy but exhausted trainee.
“You're doing interesting work, not photocopying, and the whole deal team is there with you.”
Shearman's overseas seats are always in demand, with trainees lining up to hurl themselves at capital markets and finance seats in New York, competition in Brussels, projects in Singapore, and either international arbitration or a mix of projects and M&A in Abu Dhabi. One who had been to the Big Apple reported experiencing a “less face-timey culture. Not that it's bad in London, but in New York if it's 3pm and it's quiet, you don't even need to be told to go home, you just go because no one else is around!” In Singapore “it's difficult because people don't really know how the training system works, so you're not supervised in the same way as in London, though that doesn't mean you don't have mentoring or guidance.”
“I'm not going to lie,” began one source ominously when we asked about hours, “you work hard here.” Although time spent in the office varies greatly from seat to seat, all our sources had experienced some long hours. Finance was a serial offender, with the worst report citing “a six-week stretch of starting at 8am – because of Abu Dhabi – and staying until 2am, plus working every weekend.” M&A was apparently “not as bad,” and all confirmed that “when there's nothing urgent, you can leave at 5.30pm.” And even when deadlines and all nighters come a-knockin' (cause they will) “you're doing interesting work, not photocopying, and the whole deal team is there with you.” Occasional days off in lieu are offered “without having to ask for them,” and “generally your efforts are appreciated.” One wise insider advised that “if you want to stay here long-term, you need to take care of yourself. There's a world outside the firm and you have to seize opportunities to do other things sometimes.”
"Expectations are high and there is pressure."
Sources told us that the international nature of the work also informed the atmosphere and culture of the firm. “It's quite diverse and that makes it distinctive,” one felt – the trainee group has a healthy gender balance and good ethnic diversity. Another source added: “Different personalities are allowed to flourish. You can jump from having an engaged conversation about legal issues to one about something personal and you can let your personality shine through without constantly being on your guard.” Others agreed, adding that “people don't put up a professional front – I'd describe our culture as entrepreneurial but relaxed.” That said, “expectations are high and there is pressure. But considering the high calibre of the work we do, it's not that stressful. For example, if you're working late partners will often come up to you and say, 'You don't have to do that tonight.'”
Prospective trainees meet on the LPC and at firm events in the build-up to the training contract, “so by the time we get here we're already like a big family.” This fed into the social life, partly co-ordinated by a trainee-led committee funded by the firm. “Every seat we get a budget for two nights out, but often the impromptu drinks are the most fun. The M&A team goes out a lot.” We heard there's an active sports scene, with football, netball and softball teams. Some felt “the firm itself doesn't organise that much,” but they had enjoyed a Christmas party at minimalist Italian restaurant L'Anima.
Shearman usually has pretty good retention rates and at the time of our calls trainees were optimistic: “We all have different interests so it doesn't feel competitive.” A chat with HR is followed by a form-filling exercise where hopefuls indicate their preferred departments. Partners then meet and make decisions; there are no interviews. In 2016, all 13 qualifiers were retained.
Shearman's hard-working trainees appreciated office perks like a Nespresso machine, subsidised gym and dry cleaners, and free late-night taxis home.
How to get a Shearman & Sterling training contract
Vacation scheme deadline: 4 November 2016 (winter); 20 January 2017 (spring and summer)
Training contract deadline: 31 July 2017
Competition for training contracts at Shearman & Sterling is increasingly fierce: applications for the firm's 2018 training contract were up 44% compared to the previous recruitment round. There are 17 training contracts on offer each year, and future trainees need a minimum AAB at A level and 2:1 degree.
Recruitment officer Katie Makey tells us the online form – which is used for both vac scheme and direct training contract applications –“is pretty standard” and contains three questions: two open-ended ones – 'Why do you want to be a solicitor?' and 'Why Shearman specifically?' – plus “a commercial question about our place in the industry.”
“There are three things that can really make a candidate stand out on paper,” Makey says, “and they are strong academics, work experience, and tailored answers to our questions.” She mentions that while legal work experience is not essential for vac scheme hopefuls, it is a must for direct training contract applicants. “We like to see that, at the very least, they've attended firm open days or other non-assessed events – that shows they're committed to a career in the law. ”
Interviews and assessments
Around 6% of applicants go on to a first-round interview. This takes place with either a senior associate or a partner, and a member of the graduate recruitment team, and “isn't too formal,” according to Makey. “We aim for a conversational tone to ensure it's a two-way process.”
Candidates are asked the usual 'Why law?' and 'Why Shearman?' questions because “we want to see a genuine interest in us as a firm. We also expect candidates to be able to speak knowledgeably about our place in the industry at large,” Makey says.
Success at this stage leads to an assessment centre for training contract applicants; for vac scheme applicants this takes place in the second week of their placement. The day-long assessment centre starts with a written exercise that Makey assures us “is accessible to both law and non-law candidates.” A group exercise in the form of a business case study follows. “Seeing how candidates behave and conduct themselves as part of a team is very important to us,” says Makey. “Our London office is quite small, so we need to see that people can interact well with others.”
Next up is a case study assessment: candidates are asked to review a news story before discussing it with two lawyers. Forming a balanced argument is key, as is being able to discuss commercial issues confidently.
The final step is an interview, usually with two partners. We have it on good authority that this is “much more commercially-focused than the first interview.” According to Makey, “a big part is also determining whether the interviewee will fit into our culture.”
The day also includes a lunch with trainees, a tour of the office, and a drink with some of Shearman's lawyers to round off the day.
The vacation scheme
Shearman runs four vacation schemes: one in the winter, one at Easter and two in the summer. All vac schemes run for two weeks and there's room for up to ten candidates on each.
Vac schemers spend each week in a different department. On top of that, “we try to connect those who express a particular interest in a certain area with relevant people around the office,” says Makey. “We might arrange for them to have a coffee with a partner from that department, for example.”
She goes on to tell us that supervisors “are told to treat vac schemers as they would a first seat trainee. We want them to have as authentic an experience as possible.” Along with a supervisor for each department they visit, attendees are assigned a trainee mentor, whose workload they shadow in between various HR-led activities.
Vac schemers undertake the assessments outlined above – written and group exercises, a case study assessment, plus a partner interview – during the second week of their placement.
Interview with graduate recruitment partner James Webber
Student Guide: What highlights from the past year would you like our student readers to know about?
James Webber: In the London office we hired partner Frank Miller who joined us from Freshfields. We’re very focused on trying to ensure that all our trainees get offered a job on qualification, and last year, remarkably, we managed to give each and every one of them their first-choice preference. At the moment, we're concentrating mainly on organic growth. We also made up six new partners and two new counsel in London last year. That shows the confidence and ambition that we have here in the London office. Last year, we also underlined our Middle Eastern ambitions by opening in Dubai and entering into a joint venture with a Saudi Arabian firm.
SG: Which practice areas are growing and are any shrinking?
JW: None are shrinking. Every practice area in London continues to grow, especially finance, lit/arb and M&A. By late 2016, we will have grown to eight M&A partners in London – up from only three at the beginning of 2013. So you can see our momentum and success.
SG: What is the strategy when it comes to Shearman's London office?
JW: Fundamentally, our strategy remains the same: to keep on doing what we’ve done so well for so long. We'll continue to put our clients first, and recruit and retain the finest legal talent. The London office is really important to the firm – it's the second largest. Already, over half of the firm’s lawyers work outside the US and London is a hub for European and Middle Eastern business. We will continue to build and strengthen this office, and we'll do so organically (in particular, by hand-picking and developing the finest trainee talent). It's the best way to protect our extraordinarily collaborative and collegiate culture. We’re never afraid to champion and pioneer the new initiatives that the firm introduces. With pro bono, for example, we have just made one of our associates our first- ever European pro bono manager. We are really pushing pro bono in London: we want our stats to be the cause of envy for the rest of the firm. We're really hot on diversity & inclusion here as well.
SG: Globally, are there any more office openings in the pipeline?
JW: You never know! I’m not aware of any imminent new office openings. We're not trying to plant a flag in every jurisdiction though – we’re not really an “if you build it they will come” type firm. We have spent decades building up our 'best friend' network of first-rate independent local law firms so that we can provide excellent client service everywhere and anywhere right across the world. If a client wants to start doing lots of business in a place where we don’t already have an office, we decide whether that client would be best served by working in collaboration with our local 'best friend' or whether we need to set up our own office.
SG: Has anything changed in the scope or method of recruitment that we should know about?
JW: We’ve revamped our graduate recruitment literature and website. We now run vacation schemes not only over the summer but also in the winter and at Easter. We’ve introduced campus ambassadors and we also now do in situ vac scheme interviews on campus at some universities. These on-campus interviews are working well for us (and, so we’re told, for our applicants), so we’re going to visit even more universities this year. We’ve also been using social media much more to raise awareness and to improve attendance at various events: that initiative has proved remarkably successful.
SG: What's the number one thing Shearman can offer young lawyers-to-be, and the number one thing you expect of a trainee?
JW: We are really proud of our international footprint, and our ability to provide our clients with a world-class service anywhere. There are some firms that also have international offices but who are really only recruiting grads for their London office. Here, we are genuinely international: the trainee talent that we recruit is the firm’s talent – we don’t own it in London. So, if someone wants to spend time in Singapore, or Abu Dhabi, or New York, we are delighted to be able to offer them those opportunities. The number one thing we can offer our young lawyers is that. Truly, the world is their oyster.
What’s the number one thing I expect of a trainee? That’s hard but I’ll say... enthusiasm. I like to see self-starters – trainees with the “get up and go” to spot those wonderful opportunities and then go and grab them. I expect all of our trainees to be enthusiastic people who really want to take responsibility for their career progression.
SG: How would you describe the culture of the firm?
JW: I think it is very collegiate and highly collaborative. In London, there's a real feeling of team spirit and you can feel the momentum and buzz. We're very light-touch in our management: we treat everyone as a grown-up, so we don't need to have loads of rules and regulations. We want people to be able to get on with their work and to really enjoy what they’re doing and what we’re all helping to build.
The firm's history
First the worst, second the best? Shearman apparently doesn't abide by that playground rhyme judging by the list of firsts on its website – the firm advised on the first ever IPO, the first sovereign wealth bond issuance – and its predilection for working on the biggest deals around. The firm's made up of more than just deal-doers but its financial and transactional practices are what Shearman's traditionally best known for so here's a brief look at the firm's history by way of its corporate and financial feats:
Shearman & Sterling LLP
9 Appold Street,
- Partners 42
- Assistant solicitors 200
- Total trainees 30
- Contact Paul Gascoyne, 020 7655 5000
- Method of application Online at ukgraduates.shearman.com
- Selection procedure Interview with HR and a senior lawyer/partner, and assessment centre
- Closing date for 2019 31 July 2017
- Training contracts pa 15
- Applications pa Approx 2,000
- % interviewed pa 6%
- Required degree grade 2:1 or international equivalent
- Training salary (2016)
- First year: £45,000
- Second year: £50,000
- Holiday entitlement 24 days pa
- Post-qualification salary (2015) £95,000
- % of trainees offered job on qualification (2016) 100%
- Overseas offices Abu Dhabi, Beijing, Brussels, Dubai, Frankfurt, Hong Kong, Menlo Park, Milan, New York, Paris, Rome, San Francisco, São Paulo, Saudi Arabia, Shanghai, Singapore, Tokyo, Toronto and Washington DC.
Main areas of work