TCLA General Discussion Thread 2022-23

[laurabeaumont]

Do you guys know where I can find information to gain a general understanding of banking and finance?

Hi @S87,

I have identified the following resources that could help you!

• Jake Rickman identifies important areas of commercial law in the news in the following threads: https://www.thecorporatelawacademy.com/forum/forums/commercial-awareness-discussion.57/ This is an excellent place to build your general commercial awareness which can in turn improve your understanding of general principles of banking and finance
• If you are fortunate enough to hold a TCLA Premium membership (or are thinking of buying one), you can take a course on building your understanding of the financial world: https://classes.thecorporatelawacademy.com/courses/enrolled/2023718
• If you have a TCLA gold membership, you can obtain the commercial awareness booklet: https://classes.thecorporatelawacademy.com/
• This book is great for an in-depth understanding of banking - "Banking: A Very Short Introduction", "The FT Guide to Understanding Finance" and "The Intelligent Investor"

Hope this information helps!

Laura

 

[CallumJR]

Hi @Jessica Booker
I just saw your great news on Linkedin - congratulations!!!. I was wondering whether we will be able to count on your support in the future?

I always valued your helpful insights!

 

[Jessica Booker]

Hi @Jessica Booker
I just saw your great news on Linkedin - congratulations!!!. I was wondering whether we will be able to count on your support in the future?

I always valued your helpful insights!

Hi @CallumJR - thank you!

Yes, I will still be here in the forums and taking 1-2-1 calls with Gold members.

I am incredibly fortunate the firm I have joined is being incredibly supportive in allowing me to continue with TCLA, so I will be responding to the vast majority of questions in the forums as usual.

 

[marinary.v]

Hi team, I wanted to check if someone can take a look at my account settings? I've purchased a premium plan and requested membership some time ago but still cannot access the database - would be very grateful if someone could please check this? Thank you!

 

[Jessica Booker]

Hi team, I wanted to check if someone can take a look at my account settings? I've purchased a premium plan and requested membership some time ago but still cannot access the database - would be very grateful if someone could please check this? Thank you!

I can do this. I would you be able to send me confirmation of your purchase via private message and once I have got this I can change your access.

 

[wz_13]

does anyone know of any pharma-legal internships/ med-law work opportunities for final years awaiting graduation? Cant seem to find any online.

 

[Ameliaa]

Is it common for spots to open up so you can start your training contract earlier? I would love to start my TC this year or the next as I've done my LPC. I'm due to start in 2025 and the firm said they would let me know if any earlier position opens up but I was wondering how common this is.

 

[gdara]

I have a question abut a client pitch task - if I was pitching to a client in the area of financing a deal, does anyone have any tips regarding what points that should be covered? I've already covered out the pros and cons of third-party debt and cash deal but I'm not sure what else a client would want to know. any help is appreciated.

@Jake Rickman - would you be able to help on this?

 

[gdara]

Also does the TCLA have courses on finance and capital markets?

 

[Jake Rickman]

I have a question abut a client pitch task - if I was pitching to a client in the area of financing a deal, does anyone have any tips regarding what points that should be covered? I've already covered out the pros and cons of third-party debt and cash deal but I'm not sure what else a client would want to know. any help is appreciated.

@Jake Rickman - would you be able to help on this?

Hi,

I'm happy to try and help!

This is a broad topic, so without any further info, some general points to consider (which you may already have!):

• Are you pitching to a corporate client — i.e., the party raising financing — or the party financing the deal, such as a private equity fund or investment bank underwriting a debt issuance? (I am assuming it is a corporate client).
• What sector does the client operate in? Some sectors like oil/gas and telecoms have high levels of gearing compared to other sectors like professional advisory and pharmaceutical industries. Unless the client has a good reason otherwise, you would not want deviate too aggressively from the industry norms.
• Has your client considered accessing internal forms of financing to fund the deal? If it has a high volume of retained earnings, rather than undergo a large one-off dividend or share buyback, it might consider reinvesting these retained earnings to keep the external sources of financing lower. This will depend on the financial performance of the company, as well as the industry. For instance, growth stocks like Amazon and Alphabet generally use a higher rates of internal financing because they do not issue dividends and have more cash on hand.
• As a general point, it is important to tailor advice to the client's own finances. An investment grade company can raise debt more cheaply than a company with less favourable credit ratings.
• In an interview, you are likely to score more points by considering wider macro-economic factors. I'm mainly thinking of interest rates and their impact on the cost of borrowing. Right now, the cost of credit worldwide is more expensive because interest rates are at their highest points since before the 2007-08 Global Financial Crisis. Therefore, financing a highly-levered buyout requires the predicted return on capital employed (from the client's perspective) to far exceed the minimum levels we saw two years ago. In other words, debt financing is more expensive now than in the past decade or so. There are therefore fewer deals out there that can justify the added interest costs. Therefore, your client might look into alternatives, like hybrid financing. I am thinking of issuing convertible debt securities. The investors get the option to convert the loan amount into equity in the future, which entitles the issuer to demand a lower interest rate. The issuer also avoids having to keep cash on hand to pay off the loan amount if it is reasonably confident that a sufficient number of noteholders will exercise their convertible options.
  • A corollary point that arises here is that pure equity financing in the form of an IPO is also less attractive because equity investors are more skittish due to wider market uncertainty. This has driven down valuations for companies looking to go public or raise further equity financing on the public market. But depending on the client's circumstances, a private placement might be a better option to raise equity finance.
• As you say, it is good to consider in broad terms the benefits of debt (interest payments are tax fee [whereas dividend payments are not], returns on shareholder equity are "juiced" with more gearing), compared to equity (requires less stringent financial management because there is no added interest payments to service, no need to bother with debt investors taking additional security or having to comply with loan covenants).
• Is there any pending litigation or publicity issues that might influence financing decisions? Lenders are less likely to lend if a client is facing likely liability for a massive lawsuit, and bad publicity drives down the price of shares, which may make equity financing less viable (see Cineworld's financial troubles partly arising from a high-value judgment entered against it in Canada).

I am sure there are loads more points I have missed, so I'd welcome others adding on to this.

Also, it is important not to get too bogged down in the details. You'd have a hard time getting all these points across in an interview. So pick a few that are the most interesting to you.

 

[Jake Rickman]

Also does the TCLA have courses on finance and capital markets?

Not sure about a course that solely focuses on finance and capital markets, but @Jaysen would be best advised to comment on this.

I have debt capital markets on my tentative list of future premium articles, if that might be of interest?

 

[gdara]

Hi,

I'm happy to try and help!

This is a broad topic, so without any further info, some general points to consider (which you may already have!):

• Are you pitching to a corporate client — i.e., the party raising financing — or the party financing the deal, such as a private equity fund or investment bank underwriting a debt issuance? (I am assuming it is a corporate client).
• What sector does the client operate in? Some sectors like oil/gas and telecoms have high levels of gearing compared to other sectors like professional advisory and pharmaceutical industries. Unless the client has a good reason otherwise, you would not want deviate too aggressively from the industry norms.
• Has your client considered accessing internal forms of financing to fund the deal? If it has a high volume of retained earnings, rather than undergo a large one-off dividend or share buyback, it might consider reinvesting these retained earnings to keep the external sources of financing lower. This will depend on the financial performance of the company, as well as the industry. For instance, growth stocks like Amazon and Alphabet generally use a higher rates of internal financing because they do not issue dividends and have more cash on hand.
• As a general point, it is important to tailor advice to the client's own finances. An investment grade company can raise debt more cheaply than a company with less favourable credit ratings.
• In an interview, you are likely to score more points by considering wider macro-economic factors. I'm mainly thinking of interest rates and their impact on the cost of borrowing. Right now, the cost of credit worldwide is more expensive because interest rates are at their highest points since before the 2007-08 Global Financial Crisis. Therefore, financing a highly-levered buyout requires the predicted return on capital employed (from the client's perspective) to far exceed the minimum levels we saw two years ago. In other words, debt financing is more expensive now than in the past decade or so. There are therefore fewer deals out there that can justify the added interest costs. Therefore, your client might look into alternatives, like hybrid financing. I am thinking of issuing convertible debt securities. The investors get the option to convert the loan amount into equity in the future, which entitles the issuer to demand a lower interest rate. The issuer also avoids having to keep cash on hand to pay off the loan amount if it is reasonably confident that a sufficient number of noteholders will exercise their convertible options.
  • A corollary point that arises here is that pure equity financing in the form of an IPO is also less attractive because equity investors are more skittish due to wider market uncertainty. This has driven down valuations for companies looking to go public or raise further equity financing on the public market. But depending on the client's circumstances, a private placement might be a better option to raise equity finance.
• As you say, it is good to consider in broad terms the benefits of debt (interest payments are tax fee [whereas dividend payments are not], returns on shareholder equity are "juiced" with more gearing), compared to equity (requires less stringent financial management because there is no added interest payments to service, no need to bother with debt investors taking additional security or having to comply with loan covenants).
• Is there any pending litigation or publicity issues that might influence financing decisions? Lenders are less likely to lend if a client is facing likely liability for a massive lawsuit, and bad publicity drives down the price of shares, which may make equity financing less viable (see Cineworld's financial troubles partly arising from a high-value judgment entered against it in Canada).

I am sure there are loads more points I have missed, so I'd welcome others adding on to this.

Also, it is important not to get too bogged down in the details. You'd have a hard time getting all these points across in an interview. So pick a few that are the most interesting to you.

Thank you so much, @Jake Rickman - this is so helpful!

Re further info: I'm pitching as part of a team as 'lawyers' of the firm to a prospective client who is looking to acquire a company through third-party debt and private equity, so I was trying to sort out the financing portion of the pitch - these are excellent points

 

[gdara]

Not sure about a course that solely focuses on finance and capital markets, but @Jaysen would be best advised to comment on this.

I have debt capital markets on my tentative list of future premium articles, if that might be of interest?

Yes that sounds very interesting - I look forward to checking it out when/if it comes out

 

[LLM2022]

Hi @Jessica Booker or anyone able to answer my question.

I graduated in July 2022 from my postgraduate course and pursued a gap-year. During my gap-year, I worked in retail for a few months and did some international travel with friends. I was quite burned-out from my postgraduate course and really wanted to take some time to recover. However, now that I am back, I do worry how firms will view this year...

I am now doing much better mentally and am fully dedicated to completely throwing myself into applications. However, given I still have a few months before the start of the application cycle, I was wondering if it is advisable for me to try and get a full-time paralegal job (or any job), so it doesn't look like I am still unemployed prior to applying? Or would my employment-status not be a huge issue at the time of application?

Would appreciate any advice!

 

[Jaysen]

Also does the TCLA have courses on finance and capital markets?

Hey there - yes, we had a breakdown of capital markets from a capital markets lawyer in our Understanding the Financial World course: https://classes.thecorporatelawacademy.com/courses/commercial-awareness-training/lectures/45950768

We also have a written breakdown in our Understanding the City course: https://classes.thecorporatelawacademy.com/courses/introduction-to-the-city/lectures/22243652

 

[Lawyerwithadream]

Hi @Jake Rickman @Jessica Booker , I recently received feedback on my commercial awareness interview. The main feedback was that my analysis was very superficial. How can improve that? Are there any courses on here I could consult? Any advice would be great! Thank you

 

[Jessica Booker]

Hi @Jessica Booker or anyone able to answer my question.

I graduated in July 2022 from my postgraduate course and pursued a gap-year. During my gap-year, I worked in retail for a few months and did some international travel with friends. I was quite burned-out from my postgraduate course and really wanted to take some time to recover. However, now that I am back, I do worry how firms will view this year...

I am now doing much better mentally and am fully dedicated to completely throwing myself into applications. However, given I still have a few months before the start of the application cycle, I was wondering if it is advisable for me to try and get a full-time paralegal job (or any job), so it doesn't look like I am still unemployed prior to applying? Or would my employment-status not be a huge issue at the time of application?

Would appreciate any advice!

Spending time for travelling is fine - many people do this.

As you are now back in the U.K., I would try to secure something. This doesn’t have to be paralegal work, it can be anything. Being unemployed isn’t necessarily an issue but obviously being in some form of employment will only be an advantage. The only issue with being in employment is that it may limit your ability to do vacation schemes - so it does depend what your application strategy is and what type of jobs you are applying to.

 

[laurabeaumont]

Hi @Jessica Booker or anyone able to answer my question.

I graduated in July 2022 from my postgraduate course and pursued a gap-year. During my gap-year, I worked in retail for a few months and did some international travel with friends. I was quite burned-out from my postgraduate course and really wanted to take some time to recover. However, now that I am back, I do worry how firms will view this year...

I am now doing much better mentally and am fully dedicated to completely throwing myself into applications. However, given I still have a few months before the start of the application cycle, I was wondering if it is advisable for me to try and get a full-time paralegal job (or any job), so it doesn't look like I am still unemployed prior to applying? Or would my employment-status not be a huge issue at the time of application?

Would appreciate any advice!

Hi @LLM2022,

Just to add to @Jessica Booker's great advice. It also depends on what you already have on your CV as well. If you feel like you have sufficient experience already to demonstrate your enthusiasm, then there is little reason to pursue only legal jobs. However, it definitely wouldn't hurt.

Also on the VS point (ie having time to complete vacation schemes) - from my experience over the past few months, many agencies do have several short-term jobs in the legal space involving document review. They are usually very casual or at most part-time, also with good pay. It may be worth contacting Larbey Evans or Ryder Reid!

Hope this helps

 

[laurabeaumont]

Hi @Jake Rickman @Jessica Booker , I recently received feedback on my commercial awareness interview. The main feedback was that my analysis was very superficial. How can improve that? Are there any courses on here I could consult? Any advice would be great! Thank you

Hi @Littlemisslawyer,

Great to hear you are actively acting on feedback! It is difficult to know how your analytical skills are developing without having someone observe/offer feedback on your answers, so I would suggest the following courses/activities to help:

• Interview Simulator for Gold Members - You will be provided with in-depth feedback as to your performance and you can ask for specific guidance on the case-study aspect.
• As a premium member, you have access to a course on practising technical case-studies
• Follow @Jack Rickman's articles - It will be important to be able to confidently communicate your opinions on commercial topics, so what better way of improving your confidence than by taking part in discussions in the comments/threads of the articles?
• Freshen up on basic commercial jargon - A great way to 'fake it until you make it in relation to communicating your commercial understanding is by using common commercial terms like your understanding of "interest rates" for example". In the area of Real Estate, detailing how you know "interest rates have gone up to 5%" when establishing why it will be more difficult for a company/client to obtain a tenancy/mortgage/rent in the current market rather than simply saying "prices have gone up" demonstrates your commercial awareness more effectively. You can improve your mental commercial dictionary by completing courses on "understanding the financial world", "how to think commercially", or "developing your commercial awareness".
• Just reading the FT and practising understanding the jargon and concepts in the article once a day can have a great impact on your commercial understanding.
• Reading books on the commercial world: I recommend All You Need to Know About Commercial Awareness and All You Need to Know About the City which I read during my application cycle and gave me that lightbulb moment in relation to analysis.

Hope this helps!

Let me know if you have any more questions via this thread

 

[Lawyerwithadream]

Hi @Littlemisslawyer,

Great to hear you are actively acting on feedback! It is difficult to know how your analytical skills are developing without having someone observe/offer feedback on your answers, so I would suggest the following courses/activities to help:

• Interview Simulator for Gold Members - You will be provided with in-depth feedback as to your performance and you can ask for specific guidance on the case-study aspect.
• As a premium member, you have access to a course on practising technical case-studies
• Follow @Jack Rickman's articles - It will be important to be able to confidently communicate your opinions on commercial topics, so what better way of improving your confidence than by taking part in discussions in the comments/threads of the articles?
• Freshen up on basic commercial jargon - A great way to 'fake it until you make it in relation to communicating your commercial understanding is by using common commercial terms like your understanding of "interest rates" for example". In the area of Real Estate, detailing how you know "interest rates have gone up to 5%" when establishing why it will be more difficult for a company/client to obtain a tenancy/mortgage/rent in the current market rather than simply saying "prices have gone up" demonstrates your commercial awareness more effectively. You can improve your mental commercial dictionary by completing courses on "understanding the financial world", "how to think commercially", or "developing your commercial awareness".
• Just reading the FT and practising understanding the jargon and concepts in the article once a day can have a great impact on your commercial understanding.
• Reading books on the commercial world: I recommend All You Need to Know About Commercial Awareness and All You Need to Know About the City which I read during my application cycle and gave me that lightbulb moment in relation to analysis.

Hope this helps!

Let me know if you have any more questions via this thread

Thanks so much!! That’s super helpful