There is a saying within the US Navy Seals special forces community: “…under pressure you do not rise to the occasion, you sink to the level of your training, which is why we train so hard.” The success, or otherwise, of their operations is determined by how well prepared they are for all eventualities and contingencies.

Historically, this has been the opposite of how lawyers in the commercial world train for their day job. Of course, there is some classroom learning, but the reality is that the partners of today at the leading law firms learned by doing and getting their hands dirty on real world cases and transactions. Reviewing and amending hundreds of documents meant that they learned what the key provisions were, where they were in the multitude of pages and why they were contained there in the first place. This meant that when the time came to negotiate deals and transactions as they became more senior, they knew the implications in the documents of the key issues that were being debated by their respective clients. This allowed them to give informed, commercial advice where they mapped the needs of their clients to the documents. The training ground for lawyers was live deals and not rehearsing things through training, unlike Navy Seals.

What could change in the future?

The general counsel of a leading technology company recently stood up at the partner conference of one of the world’s largest law firms and told the assembled legal highflyers that the value of the commoditised work provided by their firm and for which they currently charge their clients will shortly be zero. Why? He was referring to the implications of artificial intelligence for law firms and how they operate. Historically the leading commercial law firms have charged their clients a lot of fees for deploying a large phalanx of junior lawyers to undertake what can broadly be called data checking or process driven activities. In a large litigation case, this could be a discovery exercise, in a merger or acquisitions deal, this could be the verification of warranties in the sale and purchase agreement and in a finance transaction, this could be the satisfaction of conditions precedent. The margins earned by law firms for this sort of work has been under attack for some time as clients have required that these sorts of activities should be done more cheaply, for example using offshore or onshore para-legals in urban centres where the cost of living is cheaper and hence the wages that need to be paid are lower.

However artificial intelligence threatens to take this attack to a new level. The use of this technology in law firms is in its infancy, partly because they pay out almost all their annual profits to the partners so have no war chest for IT investment and partly because these institutions are conservative when it comes to borrowing to invest in such areas. However, when one sees the current capabilities of Chat GPT or equivalent products it is clear that these data checking or process driven activities are fully capable of being undertaken by a machine learning platform. As AI begins to increasingly do this type of work, law firms may seek to avoid passing on this cost saving, but clients are too sophisticated for this to be a sustainable position, very quickly this will lead to no meaningful charge being levied for this work.

What implications will this have for law firms? They will have to reassess their business model. They will not need as many lawyers as AI will be undertaking a lot of the data checking and document drafting and reviewing. This will mean that there will be an inability to charge for the time of lots of lawyers which implies that law firms will need to charge much more for the value-added advice, for example partner time on the key strategy or negotiation issues. Think of the current model of seeking the advice of a KC on litigation matters. And for junior lawyers? Well, there are likely to be fewer of them because they will not be needed for the historic data checking and process driven activities and there will be far fewer opportunities for them to learn on the job by getting their hands dirty. They will handle entire documents far less so will lose sight of the architecture of their trade albeit they will need to focus on the key, value-add parts that are relevant to the case or transaction in hand. As a result, it is likely that law firms will have to fundamentally change their approach to training. They will need to take a leaf out of the book of the special forces communities and spend far more time on training their junior lawyers so that the partners of tomorrow have the sufficient depth of knowledge to justify their high charge out rates.

To discuss this article or chat about your next career move please contact Adam Freeman at adam@ltnpartners.com

Wishing all our candidates, clients, and friends a happy festive season and a fantastic 2024!

Maurice Allen, Chief Executive & Founder of LTN & partners quoted in Legal Business…

It’s a ‘yes’ from them – A&O and Shearman partners vote through landmark $3.5bn transatlantic deal – Legal Business

The battle for talent is never going to go away. What never seems to be discussed is how having an efficient process  affects the result greatly. It’s a bit like the tedious quote you hear from every single football player who makes a transfer, and they turn around to camera and say…“the club showed they really wanted me.”

How does that relate to the talent in law you ask? A firm that moves quickly when in a competitive situation is way, way more likely to be chosen over another, and that also relates to when the financial compensation on offer might not be as great.

There are probably numerous examples we could offer as evidence but take the example below and tell us which firm you would choose:

We have worked with two firms (one US and one UK) who were looking to add to their lateral ranks in a very specialised and highly competitive area.

The process with the UK firm had dragged on for some 8 months. When the US firm showed serious interest, they told us that they aimed to have the entire process wrapped up in eight weeks from the time of the first interview to having an offer on the table for the candidate. In exceptional circumstances they can commit to getting things done in four weeks.

Over the last several years, we have become accustomed to US firms hiring high performing partners from the UK’s leading firms, whereas the UK firms have largely focused on promoting their internal cohorts. With UK firms increasingly more often tapping into the lateral market, however, the effectiveness of their process becomes far more relevant. If UK firms are to replenish their ranks, they will need to become nimbler and streamline their hiring process.

This is particularly relevant in the present market as more and more firms, US, and UK, have made the strategic decision to focus on funds clients, as opposed to large banks or corporates. A number of our clients have identified sophisticated private capital (private equity and credit in all their iterations) as a priority for the next several years. Given that most multi-asset managers have traditionally been headquartered in the US, if UK firms are to win more work from these clients, they will invariably need to penetrate the US market, both by investing in their offices in the US and by cementing their relationship with US-headquartered fund clients throughout Europe, the Middle East and Asia.  

If this strategy is to be executed successfully, UK firms will need to hire high performing partners from the firms that have traditionally had strong relationships with US funds. Whilst stretching the traditional lockstep model is a step in the right direction, an efficient hiring process that conveys a given firm’s interest in a particular candidate is also of paramount importance.

Several years ago, the Managing Partner of the London office of a leading US firm, who had been a UK Partner for decades, used a simple sailing analogy to describe the difference between the UK and its US competitors. US firms are nimble, agile, and particularly adept at responding to changing market conditions, not dissimilarly to fast motorboats. The UK firms, on the contrary, are more akin to large and much harder-to-steer? cruise ships, with the effect of any changes made occasionally requiring months or years to manifest themselves. If UK firms are to transform themselves into faster and more responsive vessels, they should begin by overhauling their hiring process.

To discuss this article or chat about your next career move please contact Filippo Falchi at filippo@ltnpartners.com

Today marks the start of Pride Month 2023 and LTN & Partners want to take the opportunity to celebrate all our friends and colleagues who are proudly part of the LGBTQ+ community.

🌈 Happy Pride Month! 🌈

We are thrilled to be sponsoring the Law Society rugby 7s and netball tournament again this year. Its a great event so hope to see you there. More details here soon!

Law Society RFC 7s & Netball Tournament 2023: Sponsorship Announcement | New Law Journal | The leading weekly legal magazine

When speaking to Associates at the start of their search for a new role, I am still surprised by how many are inclined to rule out US firms in their entirety. This is often based on a concern around hours and expectations.

I find this is a sentiment held by many junior Associates and Trainees in particular, and a large portion of those who are coming from overseas jurisdictions.

After a bit of probing, it is apparent that these opinions are heavily (if not entirely) based on hearsay and the same horror stories that have been passed down from one contact to another, rather than being based on any real or recent first-hand experience.

I spend a lot of time myth-busting around this point, and actively encouraging these Associates to take a more open-minded approach to their search.

The reality is that whilst Associates at US firms do work hard (they often service the biggest clients on the most complex and cutting-edge transactions/disputes) the expectations are really not much different to Magic Circle and other international outfits too.

In many cases the hours are the same.

For US firms quoting 1,900 or 2,000 hours you will find that some allow 200 of those hours to be a combination of client development / pro bono, know-how work etc, (i.e. not just client billings). So in reality, you are looking at 1,700 chargeable hours as the gateway to  eligibility for a bonus – directly competing with non-US headquartered firms.

After recognising that there is often little to no difference in the hours, the stark difference in pay scales between UK and US headquartered law firms in the City makes the latter an extremely attractive option.

US firms also tend to operate with much leaner teams, providing Associates with higher levels of responsibility and the opportunity to work directly with Partners and clients at a much earlier stage in your career. This dynamic can propel your professional development forward, at a pace unmatched by large UK teams, where Associates can feel like small cogs in a big wheel.

The key message here is to take other peoples’ opinions with a pinch of salt and always do your due diligence / make your own mind up.

More often than not, Associates for whom US firms were not instinctively what they thought they wanted, come away from these interview processes feeling incredibly enthusiastic and excited by the prospect of joining them.

If you are a Trainee or Associate interested in having an honest and confidential chat about opportunities available to you, get in touch with myself or one of my colleagues on the LTN Associate team.

To discuss this topic or talk about a potential move please contact aoife@ltnpartners.com

Gender diversity – a hot topic of conversation among legal industry insiders and analysts.

One that is never too far away from the pages of the legal, business, and mainstream press.

Law firms have understandably been at pains to promote the efforts they put into diversity, equality, and inclusion. This is readily apparent these days from the law firm websites, marketing materials, or their rankings in various surveys and publications. This push is not only a recognition that they still lag other industries but is increasingly a result of direct client pressure.

According to the latest figures from The Law Society, in July this year there were 153,282 solicitors practising in England and Wales, a 2% rise over the previous year. The number has more than doubled over the past 25 years. The research reports that women account for 53% of practising solicitors.

But looking at the statistics at partner level there is still some way to go.

So, where do we see the opportunities to further redress the balance.

In the era of flexible working, organisations should now be reaping the benefits of a more open-minded approach to the way their workforce want to work. In theory, this provides firms with access to an untapped pool of talent that they have neglected up until now – namely, lawyers who have left the law (for various reasons but largely to start a family) and feel there is no clear path or encouragement to return.

A talent pool they seem tentative to try and access. Many firms (US as well as UK) have in the past flown to far-flung jurisdictions to unearth well trained- common law qualified lawyers. Granted, this would normally focus on junior lawyers but not exclusively. Australia, New Zealand, and Canada were, and remain, happy hunting grounds. A diverse and deep talent pool sitting in front of them is oddly not.

One could equate the loss of female lawyers in their late 30s/early 40s to the way many UK firms turn their senior partners out to pasture once they hit 55. By that we mean, here you have these talented and experienced professionals, and an organisation does not see a role or even a desire to find a role for them. We find that quite strange.

We would be asking the organisations that track statistics around gender diversity is what percentage of law’s female lawyers ever come back, who have left for whatever reason? To continue that train of thought through to its conclusion, another question might be: what proactive steps do law firms take in making a return appealing, and easier once you have been out for several years?

Several avenues and options should, in this post-Covid era, be open to lawyers who have returned to the law following a period away from it.

These options provide both firm and lawyer with flexible options – be that to turn a role into something more permanent or not. 

Looking at the other side of the coin, not all of this is doom and gloom. Some law firms have teamed up with organisations that have identified this area as a glaring omission. Women Returners is a network that was established in 2014 and is dedicated to not only supporting women to return to the workplace after an extended break, but also to encourage employers to take advantage of this talent pool. Women Returners has partnered with a range of employers across a variety of sectors, including the Big Four, the Bank of England, the BBC, and law firms.

Other firms have joined forces with the Reignite Academy, a similar initiative to Women Returners. Reignite was established in 2019 and aims to help women return to work, specifically in the legal sector, providing support and coaching as they transition back into permanent roles. Reignite has partnered with several law firms, including CMS, Hogan Lovells, Sidley, Travers Smith, Baker McKenzie, Mayer Brown and Macfarlanes.

Other firms have chosen their own path by creating their own specific programmes. DAC Beachcroft launched their returners programme, Reconnect, in October 2020. The programme was created by Nicola Baxter, a HR business partner, who recognised that many talented lawyers faced multiple barriers that prevented them from returning to work.

One leading US firm that appears to be open to tapping into this pool of talent is Latham & Watkins as set out in the Law.com (requires subscription) article dated 14 October 2022 setting out the hire of leveraged finance partner, Tania Bedi after a five-year career break. Ms. Bedi now finds herself in a leadership role at Latham.

Win-win we would say and dispels the myth that you cannot regain the skills/knowledge lost from being ‘out of the game’.

The Latham example should be the model in bringing experienced talent back into law. This of course is not exclusive to partners and applies equally across all levels of the legal industry. We would be encouraging firms to look closer to home when assessing their headcount needs.

nick@ltnpartners.com