For some time, the best money a lawyer could earn anywhere in the world was working for one of the leading offshore law firms. The combination of low or no income tax and commission based remuneration meant that in the boom years mid level associates were earning US$500k plus per annum.

Perhaps less well known was that many of the leading offshore law firms owned corporate services businesses that administered many of the structures created by their lawyers. The annuity income from these businesses allowed the equity partners of some firms to draw multiple millions of dollars each year - far outstripping even the most profitable of onshore firms.
 
However the global downturn has seen a number of offshore firms review their compensation structure. Earning caps have been introduced and commission has been largely done away with, in favour of the more traditional salary and bonus model. In some cases this has significantly reduced the earning capacity of associates, even if the lack of income tax means most still do much better than their onshore counterparts.

Interestingly, many offshore law firms seem to be placing their corporate services businesses in the shop window. As we saw when Mourant de Feu & Jeune (now Mourant Ozannes) sold its fund administration business to State Street in 2010, this can be great news for the equity partners. However, it is certainly less so for the senior associates and salaried partners coming through the ranks, who can only watch helplessly, as the pot of gold is removed, just as they reach the end of the rainbow.

Offshore firms looking to restructure the way they compensate and/or sell off their assets, must not forget that if they want to continue to recruit and retain the best and brightest people in the legal market, they need to make it as attractive as it was for them when they joined the offshore gold rush.

Law is frankly never sexy, no matter how much that partner may try to convince you. However, Arbitration seems to be one of the buzz words about the City at the moment.

Managing Partners absolutely love it for the marquee clients it attracts, plus the long and stable income flow it provides. At the top table, whilst most arbitration practices can’t shout about the clients they advise, when they do they are the governments or transnational companies that most firms would kill for.

Arbitration at the top level requires a global presence. Readers will have noted the recently announced opening of an office by Herbert Smith in New York as part of this strategy. With London, Paris, and New York continuing to be the strong centres for arbitration, along with Vienna, Hong Kong and now the rise of Singapore and Geneva, the demand for arbitrators globally, has rarely been greater.

With London seen as being a very attractive centre of arbitration for the emerging markets, the scene here is set to grow. You only have to look at the work that Freshfields is getting out of the CIS and Latin America, or Herbert Smith out of Russia, to see how lucrative this business can be.

The traditional winners are being challenged though. First, there was Allen & Overy challenging Herbert Smith, because of their global presence and strong presence in Energy, building a very strong practice with the likes of Stephen Jagusch and Judith Gill.

Across town on Park Lane, Wilmer Hale set up shop and now have one of the largest arbitration teams with Gary Born at its centre.Wilmer Hale IS an American firm, boldly stating that London will be its base for arbitration.

Coming up in the rear view mirror (at some pace though) are Debevoise & Plimpton. They are generating a lot of heat with the likes of Sophie Lamb, Karolos Seeger and ex Attorney General, Lord Goldsmith, leading the charge.

This clique and secretive part of the top firms is set to grow and there is going to be some serious jockeying for position for the Magic Circle if D&P, Wilmer Hale, Skaddens, Fulbirghts or perhaps even Quinn Emmanuel have anything to say about it...

For a confidential discussion on the arbitration market or other legal sectors, please contact Freddie Lawson on 0207 015 0504.

Most associates have a distinct opinion of what it's like to work at a US firm in the London market and some of these opinions have at times been negative, resulting in many myths.  You owe it to yourself to take a closer look at some of the myths in the market to ensure that you make the most appropriate career decisions.

A typical cry from most associates at English law firms is that the hours are more punishing at US firms in London. However, compared to most Magic Circle and top ten English law firms, the hours work out to be fairly similar.  This is particularly the case within certain practice areas.  The pressure on hours is at times more to do with deadlines set by clients and the nature of the deals as opposed to the type of law firm.  In essence, it doesn't really matter where you work, you are still expected to do the hours and you will end up doing the hours.  At least at US law firms, associates are handsomely rewarded, both in terms of base salary and bonus, whereas some English law firms still lag behind.  Wouldn’t you as an associate rather pick up quality work, quality client contacts and get compensated handsomely for doing the similar hours?

Another moan from associates is to do with the apparent lack of commitment to the London office/European market by US law firms in London.  Associates must appreciate that in the current economic climate, law firms, like most businesses, will follow the money.  This will result in law firms flocking to jurisdictions and practice areas where they see the work flooding in during the next decade or so.  Under such circumstances, you will see law firms, even MC/top tem law firms, increasingly rebranding themselves as “International” without a distinct focus on London/Europe but rather a focus on economies from South America and Asia.

Some argue that the onslaught of “New York” type US law firms in the London market has resulted in a generally aggressive working environment.  Associates again need to scratch the surface and look closely at the personalities involved in top management and the firm to ascertain whether it's just the US law firms which have an aggressive reputation or not.  Most US firms, compared to MC/top ten law firms are unstuffy, non hierarchal and dare I say it, friendly. You could even go as far as to say that most, if not all City law firms can be accused of being highly pressurised places to work at and the pressure and aggression has nothing to do with the jurisdiction of the head office.

Most of the myths are propagated by partners at MC/top ten English law firms who have lost quality associates over the years.  It’s always worth gathering good market intelligence to figure out whether certain firms work for you and for your particular career aspirations or not.  Just as law isn’t for everyone, US firms and City work isn’t for everyone.  However, if you are an ambitious, eager young thing, do not discount some of the most profitable law firms in the world with exceptional clients, which will provide an excellent platform to facilitate career progression, be it either within a law firm or in-house. 

If you would like a confidential conversation regarding working for a US firm in London, please contact Freddie Lawson on 0207 0150 0504.

The key skill for an in-house lawyer is being able to provide quick, practical and commercial advice that meet the needs of the business. Sounds straight forward enough, but this is not a skill taught to many junior lawyers in law firms, where the spectre of the negligence suit looms large over every piece of advice a lawyer gives an external client. Nearly every General Counsel that I have spoken to always reiterates the same two words: “COMMERCIAL AWARENESS”. They are not interested in someone who can produce a 10 page document on legal issues; they want a solution and want it quickly!

The advantages of moving in-house seem to be well known by most lawyers: better work life balance, greater remuneration package, working closer with the business and exposure to a variety of legal work. However, in these uncertain economic times, that is not always the case. For instance, many in-house lawyers work similar hours to private practice lawyers, especially as clients and their needs become global in nature and time zone sensitive.

When it comes to pay, the uncertain market conditions have altered the landscape. Tradiditionally law firms have paid higher base salaries with in-house businesses bridging the gap with higher bonuses. However recently bonuses in-house have not been as good as in previous years, whereas law firm salaries have remained competitive. Law firms are also now competing with their in-house counterparts when it comes to additional benefits such as pensions, gym membership, etc.

Nowadays no one can guarantee job security, whether you are in private practice or in-house. Many recognised banking institutions have had to cut staff in order to remain profitable. Some may even argue that law firms are now a more stable environment due to the diversity of practice areas and client base. This is especially true of full service law firms where if the corporate/real estate department is struggling, another area of the business, say litigation/insolvency, could be thriving.

Before making a move in house, you should therefore make every effort to be sure that it offers you the best long term solution, based on your career objectives. Leaving behind the intellectual rigour, security and rewards offered in private practice should not be given up lightly.

A determining factor in the success of a move from the law into recruitment is the lawyer’s motivation. Lawyers simply looking to escape the law and do something different whilst trading on their legal expertise often fail the fastest. However, those who are motivated to work in a more commercial, people centric and relationship driven environment have a much better chance of success.

The job of a lawyer and a legal recruiter are radically different. The key elements that make a successful lawyer - technical expertise, intellectual rigour and problem solving are not those that make a successful recruitment consultant, where enthusiasm, energy, resilience, self motivation and tenacity are key.

Another error that some lawyers make when starting their career in recruitment is in thinking that their knowledge of the law and strong network of friends and acquaintances will provide them with a lucrative transition into the industry. Whilst a lawyer’s background can undoubtedly help, unless they see the job for what it is from the outset - namely a sales role - they will never make good money.

For those lawyers that embrace this and marry their intelligence and hard working attributes to the qualities needed in any sales role, the rewards can be fantastic. Not only is legal recruitment constructive and dynamic, but at Glass you can find yourself earning much more money than you ever did as a lawyer.

So, once you have plucked up the courage to tell your parents that you have given up the law and all your Uni mates have sniggered at your move, it really is you who can have the last laugh.

Most managing partners still view promised books of business with scepticism. Many quality firms have been burnt horribly, by partners promising the earth and delivering little.

However it is increasingly rare for a law firm to make a lateral hire unless the joining partner has a following (real or otherwise). It is therefore vital that the lateral and the firm both agree on the parameters for the discussions about following from the outset.

A point to bear in mind is that you need to pick a recruiter who understands your business plan in sufficient depth. This is crucial as it’s your recruiter who is likely to be the first to discuss and have to do justice to it. Other agents are often accused of exaggerating a following and firms have cottoned onto this. Some even routinely discount 25% from the figure proffered by an agent and that can destroy your credibility early on. Working with an agent who knows the firm and partners well enough, has been through partner hires and business plans with them before and understands their latent attitude to the question of following is vital.

I’m inclined to always be conservative on a following as I think it’s appreciated on both sides and it also makes it far easier for a new partner to then exceed expectations. I’ve had some partners over the years (even with a genuine following) refuse to be held to a number as they didn’t want to be judged just in terms of adding  to bottom line profitability. Some firms are even happy to announce they need, say £1million following, to get straight into the equity and you then need to work out whether your genuine £850,000 should be ‘rounded up’ or whether there’s one more client you’d initially been cautious on that you could include. Or do you go in, head held high, ready to be grilled on your £850,000?

Certain practice areas also come with their own idiosyncrasies although there isn’t space to dissect the considerations in detail here. Suffice to say, in some areas the presumptions are fairly obvious - finance lawyers will need to decide if specific panels are a prerequisite to any move they make and can be exploited at a new firm; tax, share schemes and pensions are areas which traditionally expect not to necessarily have followings and to require work  thrown to them by corporate (I currently have two partners who have brought an impressive level of work through to their corporate teams over recent years and it is interesting how this is being received by firms); litigators have the best and worst of it, particularly on cases which have already run for a number of years. Often the client only knows that partner and the partner is so familiar with the ins and outs of the case in hand that there would simply be no point briefing another partner, if they were to leave. However, apart from estimating the length of the case still to run and fees due, the reality is that most clients are not repeat instructors bringing future work through to the new firm.

The question still comes back to whether, after all the analysis and perhaps even speaking candidly to clients,  (as an ex employment lawyer, I’m not going to start on restrictive convenants), do you just put a finger in the air and guestimate how much you think you’ll bring? Senior stints in house are incredibly useful as are best men, spouses and siblings at a client if you have them, or can conjure them up! How much bravado you then deliver it with, makes the difference in terms of perception.

For a confidential discussion regarding Partner opportunities, please call Jonathan Glass or Adil Lalani on 0207 015 0500, whilst Sonya is off on maternity leave.