Law Training Contract Application Specialists
Banking & Finance is a popular sector, despite its long hours – lawyers specialising in this field, or working at firms who specialise in the field, can expect high pay and bonuses. It’s a huge sector too – it intersects with numerous industries and indeed with other areas of legal practice.
Essentially, all lawyers working in this field will deal with the loaning and repayment of money, or managing financial liabilities. They will need to draft and negotiate documentation that sets out the relationship between borrower and lender. You should expect specific activities to include:
– Carrying out due diligence. This will involve assessing a borrower – be it a business, bank or HNWI – and deciding whether the information that they are relaying to the lenders is accurate. This will also be relevant if you are working with a company raising finance through equity, where you will need to assess the company’s profile and offering in much the same way.
– Negotiating with the other party’s lawyers to set the terms of a deal and record them appropriately. Expect a lender’s lawyers to produce documentation first, which will be negotiated by the borrower’s lawyers.
– Work with other parties to ensure that financial models and projections are suitable and accurate
– Ensure that all laws are being followed by the other party and its business model
– Bring all parties together to ensure that all aspects of the transaction are reviewed appropriately and that documentation is signed.
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There are numerous areas that you might specialise in. As an overview, the following should be understood and researched further:
– Bank lending: where a bank lends money to a party who then repays that amount through set terms.
– Acquisition finance: where a loan is made to a party so that party might acquire a company. This includes leveraged buyouts, which are when a borrower borrows significantly against collateral in order to buy out another company.
– Project finance: this is the financing of infrastructure and public services projects. Expect cash made by the project in future to pay back the borrowing that financed the project.
– Real estate finance: where a borrower is loaned money in order to acquire a property or land. Mortgages fall within this area.
– Asset finance: where a borrower is loaned money in order to acquire assets like aircraft, large pieces of machinery, etc.
– financial services regulation: this involves ensuring that banks are operating within the bounds of relevant legislation.
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You should expect higher profile and more complex work if you work in the City, versus (relatively) more straightforward work if you are with a regional firm. Expect the potential for very long hours, especially with the most prestigious City firms and the large international US firms. Expect to be part of a team that is heavily focused on finance, and who are able to discuss its ins-and-outs fluently. You will need to be able to understand your client’s position, which requires a detailed understanding of the wider financial world, as well as macroeconomic trends and current affairs. You’ll benefit from an exciting work environment, high-paced deals, and the potential for very generous salary packages.
Currently, COVID-19 is leading to vast changes in the sector. Traditional, face-to-face banking is being fast-replaced by digital banking, with people used to using online banking as their primary interface. Contactless payments have risen, in tandem with a new generation used to ‘challenger banks’ like Monzo, Revolut and Starling, and less reliant on the traditional high street banks. Rising inflation is a huge issue that is affecting the UK, as well as the US and other developed countries. The Bank of England has been instructed to keep inflation at 2% – an optimistic target. Expect to see central banks taking more aggressive measures to keep inflation as low as possible – like increasing the interest rate. Sovereign debt held by EU banks is set to rise due to the COVID-19 pandemic, due to central banks covering losses by the private sector.
You should read the Financial Times daily to ensure that you are up-to-date with the latest in banking and finance.
