Hi everyone!
I recently attended a Shearman & Sterling Open Day and wanted to share what they shared with everyone here. They gave really informative presentations and I thought their last one on Project Development & Finance (PDF) was particularly eye-opening, especially if that's a sector you are keen on or want to talk about in your applications/interviews!
An Introduction to the firm - James Webber, Antitrust Partner
This bit is pretty in-depth so if it's not your cup of tea, skip it!
I recently attended a Shearman & Sterling Open Day and wanted to share what they shared with everyone here. They gave really informative presentations and I thought their last one on Project Development & Finance (PDF) was particularly eye-opening, especially if that's a sector you are keen on or want to talk about in your applications/interviews!
An Introduction to the firm - James Webber, Antitrust Partner
- James reiterated the importance of categorising the different law firms in the market. This includes whether they are small and why they are small (in S&S's case, it's to retain their eliteness. They don't need size to do what they do best. More on that later...), whether they are American and what kind of American firm (are they East coast elite and have strong connections with Wall Street, like S&S, or are they like Reed Smith and have history with steel manufacturing in Pennsylvania. James strongly suggested that these differences are crucial)
- James suggested that the longer a US firm had been established in the UK, the more successful and grounded they were likely to be, as business connections and culture establishment take time. S&S came to London in the 70s.
- S&S is a Global Partnership. All partners of S&S are partners of the same firm and they all share a single profit pot. This is a model that is slower to grow but is more stable and the culture is more cohesive across borders. It fosters close collaboration between offices.
- S&S is relatively small when compared to the biggest firms in the world. In comparison to the largest which have lawyers in the thousands, S&S have 200 partners and 850 lawyers. I think James was mentioning these things to really hone into the crowd what mattered to the firm. They're not about physical growth, but more so profit growth. James urged the audience to go to a law firm that was growing and profitable (For a hint about this mattering to them, check their graduate recruitment brochure. The first page says: "Ready? Steady. Grow") See more here ***
- S&S is a full-service firm meaning they provide virtually all basic legal advice/services. But, they have 4 big departments that they focus on/are known for: M&A. Project Finance, Finance (Debt/Leveraged), Capital Markets.
- Sector Focus: Not strictly a sector-based firm but their clients fall into several, broad categories.
- Energy, Healthcare, Financial Institutions (largest client base), Industrials (2nd largest), Mining & Metals, Private Capital, Tech/Media/Telecomms
- Global Opportunities. This is an actual tagline in their recruitment literature.
- All offices work together on international deals and disputes - one transaction/deal for one network. Local offices don't necessarily generate local work. It's more about the big-ticket deals that need support all over the world
- Business Data***: 7 consecutive years of growth
- S&S want to grow further into disputes (litigation/arbitration)
- Growth will most likely be in London and New York so watch this space
- Landmark deals:
- Citigroup (Citibank) have been S&S's client since 1897 when the bank was formed through a merger. They are S&S's top billing client. This links back to the firm's New York links and the importance of developing relationships over a sustained period of time.
- S&S advised on Ford's IPO in the 1950s
- S&S is known for its "firsts", working on deals that no one's attempted before. This needs further research but it's relatively easy to find and appears to define them strongly. Could help you answer their application question on how they retain their elite standing.
- Q&A session
- Would S&S consider a merger?: Never say never. Culture cohesion is important for the firm, they consider themselves a "social" organisation, and its difficult to capture a good merger synergy (where the two firms' culture aligns well and they both have similar expectations with their relationship going forward). James suggested that firm's who were weaker usually pursued this strategy - i.e. they needed help growing.
- What legal/commercial issues do you foresee?: Politics is becoming increasingly intrusive. Calm prosperity appears to be coming to an end and governments are looking to constrain or control economies, which don't usually end well. Business of law, subsequently, becomes harder, more costly and less predictable.
- 13 trainee places last year
- 2742 applications -> 90 interviewed -> 30 on vac schemes -> 13 offered a TC
- Not figures to scare you. They just demonstrate that a good application form is vital. After that, you've got a roughly 1:3 chance of passing. Take each step you pass as a success.
- Re-applications are welcomed, only if you haven't completed a vac scheme with them and been rejected
- Trainee spaces fill up quickly so applying for the earlier vac schemes, Winter and Spring, is advised (but they aren't recruiting on a rolling basis)
- Doesn't consider AI a good topic to talk about relating to S&S, simply because it isn't affecting them much yet
- Situational Interview Questions: prepare questions about...
- 1) You (e.g. why you? what qualities do you have that would make you a good lawyer?)
- 2) The profession (why do you want to be a lawyer? do you know what it entails? how is the legal market at the moment?
- 3) The Firm (have you considered why you want to apply to S&S? Can you pinpoint what exactly it is and have you considered whether we're a good suit for you? - such as, do you prefer the smaller trainee intake)
- Work Experience section:
- Link it back to skills relatable to law, in full prose
- Really honed in on how precise you need to be with your application questions, with the three prose questions weighing differently in terms of importance for the recruiter reading it (essentially, it goes from most important, to least)
- Stellar academics will not make-up for spelling mistakes. Look for mistakes even in how you've spelt your subjects, not just in the big prose sections
This bit is pretty in-depth so if it's not your cup of tea, skip it!
- What is it?
- Projects can cover infrastructure of all-sorts such as buildings, transport and energy facilities. Quite often, they take place in emerging markets.
- Financing a project often lasts 4-5 years, much longer than a regular finance deal
- The tangibility of the product, and therefore its liability to delays and mounting costs, also means if differs to regular financing
- Local governments can get heavily involved, not usually the case with other deals
- Who is involved?
- Project company - usually created with a Special Purpose Vehicle which takes on the risk, seperate to the "Sponsor" or parent company who came up with the company.
- Sponsor - For example, this could be BP or Shell. They want the project, but they don't want the risk that comes with it. They create the SPV using a shareholder agreement (S&S's job) to create a standalone company for the project.
- Lenders - Connected to the Project company via a loan agreement (the only financial document in this project). They essentially agree to lend the company the money to make the project work. They are usually big banks like JP Morgan and Goldman.
- Operator - Connected to the project company through an operating agreement. They essentially "operate" the facility when it's done, so oil rig workers if it's an oil rig
- Construction Contractor - (Construction agreement). They build the project.
- Input supplier - (input supply agreement) Lost my notes for this bit
- Offtake purchaser - (Offtake purchase agreement) Buys the product being made, e.g. wind energy is sold to energy suppliers who provide it to our homes
- Grantor - (concession agreement) Usually a government who gives the project permission (a license) to go ahead
- More jargon - Some words that become commonplace in this sector:
- Debt/equity finance - Projects are mostly financed with debt finance (loans from banks). Equity finance, usually raising capital by selling shares, wouldn't create enough for a project
- Syndicated lending - essentially different banks chipping in money so risk is reduced
- Conditions precedent - conditions that have to be met by all participants. Can be around 400 to 500 conditions and these have to be kept track of during the time the project is coming to life
- Financial close - everyone agrees to how much money is given. Everyone says yes to the finance side of things
- Security - collateral that guarantees repayment
- Limited Recourse Financing - Ensures that the lendor can only get money back from the project company. They cannot pursue debt from the sponsor and its shareholders.
- Some Risks and Other Considerations
- Delays - the contract will set out variations and obligations in case there is more money needed
- Protestors and environmental concerns. Being careful with your image
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