Mayer Brown has a significant focus on finance in its London office. We asked lawyers at this global firm to tell us what working in finance law involves day to day.
Finance is a very broad term. What range of work comes under its remit?
Sam Bold (trainee): Finance law is predominantly to do with the borrowing of money and the management of financial liabilities. The term can be refined into various practice streams, which change in line with market trends and practices.
Rachel Speight (partner): In broad terms, 'finance' covers the range of ways that companies can borrow money.
Can you give us an idea of the clients you work with and why they need lawyers?
Jaime Lad (associate): We mainly work with lenders (banks and hedge funds for example) and other agents. These entities need lawyers to provide advice in relation to the main loan documentation such as inter-creditor arrangements and security arrangements. The lawyers usually draft and negotiate the main documents in accordance with the term sheet which has been agreed between the lender group and the borrower group. Lawyers will also assist their clients with coordination of the conditions precedent (CP) process which junior lawyers are often very heavily involved in.
“In broad terms, 'finance' covers the range of ways that companies can borrow money.”
Does Mayer Brown have a particular specialism within finance?
RB: Mayer Brown's finance group in London is widely known for structured finance (ie securitisation and derivatives) and it has a Chambers UK tier one mining finance group. We also cover project finance, asset based lending, capital markets, insurance finance, real estate finance, leveraged finance and restructuring.
JL: Finance work at Mayer Brown covers a range of areas including advising lenders or borrowers on the following transactions: receivables finance, securitisation, derivatives, leveraged finance, real estate finance, project finance, capital markets and funds. This is what makes the department perfect for trainees and junior associates – they are able to gain a broad range of experience within the finance law sector.
On your latest transaction, how did you spend your days?
SB: The last transaction that I worked on was a project finance deal relating to the financing of a mine in Africa. As the trainee on this matter I assisted with a variety of tasks relating to the conditions precedent. These tasks included liaising with the others side's foreign and local counsel, collating documents ready for closing, finalising execution versions of drafts and managing the CP check-list to ensure that everything that needed to be finalised had been prior to closing.
“The partner's role is typically to oversee just about all areas of the transaction.”
RS: I'm on the phone or email to clients and colleagues and our overseas local counsel as well as lawyers on the other side. I'm coordinating tasks and making comments on documents to ensure our clients' interests are fully protected. The partner's role is typically to oversee just about all areas of the transaction and to coordinate the lawyers running the different work streams. Overall, my role is to ensure that the commercial aims of our clients are being achieved in as efficient a manner as possible.
JL: The last transaction that I completed was a project finance transaction. As a junior associate, I was involved with drafting certain ancillary documents (eg fee letters, security documents, the opinion etc) and coordinating the CP process (liaising with local counsel and reviewing CPs such as corporate authorisations and security documents).
Are there any departments you tend to work with more than others?
SB: Not particularly, although this could vary from deal to deal. For example on a real estate finance deal you are likely to liaise predominantly with the real estate department. In general however you work with a variety of other departments including pensions, corporate, tax, construction and real estate.
Describe the overseas interactions you have on a transaction.
RS: We have been recently working on a transaction for a group of lenders proposing to lend to develop a large copper mine in Panama. Our group of clients came from Japan, South Korea, Finland, Sweden, Germany and the US. It involved meetings in Panama City, Washington DC, Seoul, Tokyo and London.
“Despite our client being an English company the matter featured aspects of Norwegian, Senegalese and Mauritian law.”
JL: We have to liaise with lawyers in overseas jurisdictions when there are foreign law elements in a transaction. For example, if security is being given in an overseas jurisdiction, we will require local counsel in that jurisdiction to draft the security and advise us on any particular registration etc formalities.
What is the most interesting deal you have worked on?
SB: The most interesting deal that I have worked on to date was a project finance matter where our client was borrowing approximately £300 million from a syndicate of lenders to help refinance an existing bond issuance, being used to finance a mining project in Senegal. Despite our client being an English company the matter featured aspects of Norwegian, Senegalese and Mauritian law.
RS: There have been many. I particularly enjoy the international and emerging markets flavour of my practice – for example, we spent many years advising the government of Afghanistan on the development of its mining industry. We also advised on the financing of a project in Burkina Faso during the country's recent coup and a project in Liberia during the Ebola outbreak.
What are the threats and opportunities on the horizon for a finance lawyer?
SB: Strong financial markets mean ample transactions and therefore ample work for finance lawyers. Financial lawyers therefore have a vested interest in the wellbeing of the global economy. Strong markets may lead to new opportunities as new financial products are introduced.
“The immediate threat is presented by Brexit.”
RS: The immediate threat is presented by Brexit and what this means for the pre-eminence of the UK's financial services industry. Another threat is the general increase in regulation being imposed on banks which has caused a slowdown in activity. In terms of opportunities, the regulatory burden has led to the growth of alternative finance providers, eg hedge funds, who face different regulations.
What do you think the effect of Brexit will be on the future of the markets?
SB: It's still too early to predict the precise effect that Brexit will have on the financial markets. The leave vote has served to weaken the pound against both the euro and the dollar. It is likely that the markets will experience a period of prolonged volatility as the Brexit negotiations unfold.
RS: The short term effect of the uncertainty of Brexit has resulted in a slowdown in the number and value of deals being done.
What personal qualities make a good finance lawyer?
RS: A good finance lawyer should have good commercial awareness and flexibility, the ability to communicate complex ideas in a clear manner, good attention to detail and bags of enthusiasm.
JL: Good organisational skills, attention to detail and the ability to work accurately and efficiently in highly pressured situations.
How should a student prepare for a career in finance?
SB: Whether by watching the news or reading publications such as the FT or The Economist, staying up to date with global financial trends will help prepare a student for a career in finance law. I would also recommend seeking out work experience wherever possible within the financial industry.