TCLA Vacation Scheme Applications Discussion Thread 2024-25

[F2020202]

Hey! Does anyone know if Linklaters is still giving out AC invites or is it safe to assume a rejection

 

[Andrei Radu]

@Andrei Radu
Hi Andrei, your posts have been so helpful through my application process - thank you so much for your time. I really appreciate it.
I was wondering if you could help my with Sidley Austin and its competitors. I understand that they have big focus on finance and private equity - especially given their growth of private equity practice. Would I be right in saying their competitors would be Kirkland, Simpsons, Weil and Paul Weiss?
What is their wider reputation?
Thank you.

I would describe Sidley in London as a medium-sized outfit of an elite US firm with strengths in a suite of transactional and advisory practices. While it is undoubtably one of the most prestigious firms in the US, it currently is and historically has trailed the traditional V10 firms (Wachtell, Cravath, Simpson, Sullivan, Davis Polk, Paul Weiss, Skadden, Latham, Kirkland, Gibson Dunn) in terms of profitability. However, many see it as "leading the pack" of the immediate next tier; and indeed, being more similar to them than the rest of the firms in the V20. Thus, if I were to name Sidley's London competitors in terms of "type of firm" and general reputation, I would list Milbank, Cleary Gottlieb, Gibson Dunn, and Paul Hastings.

However, in many cases it is more informative to look at competitors on an individual practice area basis. Here, looking at Sidley's best ranked departments in London I would list the following:

• Banking and Finance (Sponsors): Kirkland, Latham, Simpson, Weil, Paul Weiss.
• Corporate M&A: Latham, Skadden, Cleary, Davis Polk, Sullivan & Cromwell.
• Private Equity: although (quite surprisingly) Sidley isn't ranked for PE, since I know it is very focused on this practice area, I thought to mention some of its potential competitors here as well. The rivals with the highest regarded PE practices would indeed be the likes of Kirkland, Latham, and Simson Thatcher. However, given that Sidley's PE offering doesn't seam to boast of the same size and recognition, it might make more sense to think of the likes of Willkie, Ropes & Gray, and Gibson Dunn as competitors (since they also target the middle to high end segment and have relatively smaller teams).
• Debt Capital Markets: White & Case, Cleary, Sullivan & Cromwell, Davis Polk, Akin.
• Life Sciences (Regulatory): Arnold & Porter, Covington, Hogan Lovells.

 

[mmm918]

I've PM'd you

Hi - would you mind also sharing with me? I am also struggling with what to write in an application. Thank. you!

 

[Andrei Radu]

Quick question for @Amma Usman @Andrei Radu @Ram Sabaratnam and anyone else:

Which firms do not use at least one of the following in their screening:
- Watson Glaser
- SJT/Arctic Shores/other behavioural test
- Video Interview

I vaguely recall that Slaughters(?) doesn't use any of the above, instead just relying on CVs for invites to ACs. Are there any other similarly streamlined application processes? I'm guessing the corollary of not having the above is a stricter focus on grades and/or written 'why X' questions.

Thank you!

I know Slaughters definitely does not have any of the above and that Davis Polk does not either. Besides that I know that Milbank does not have any of those up until the AC stage (as part of the overall AC assessment I had to complete a WG test).

 

[Rus]

The post AC wait makes me wanna crash out

 

[Chris Brown]

Could someone please explain the difference between debt finance and equity finance and what the relative advantages and disadvantages are of each type of financing (in the context of PE), but in a way that would be digestible to a lay person. Why would one be chosen over the other? I’m trying to get my head around it and my brain is simply not willing to co-operate with me at all. Please help. 🥲🥲

@Andrei Radu @Amma Usman @Ram Sabaratnam​

 

[Andrei Radu]

I have an interview with a small firm. Is it okay to reach out to a trainee and ask about the firm over a phone call or would it be used as trying to get an unfair advantage?

As long as you do not ask about the specific questions the trainee got in their interview it should be fine. Just ensure you ask the trainee in an appropriate manner: show you are mindful of their busy schedules and that you appreciate them taking the the time to speak with you. In terms of questions you could ask that could give you some insight into the interview without crossing the threshold of unfairness, I would consider some of the following:

• How would you advise me to prepare for the interview?
• Was your interview more focused on competency questions or technical/commercial questions?
• What traits do you think the interviewing partners look for in candidates?
• What do you think are the most important criteria a candidate's performance is assessed on?
• Are there any easy to make mistakes you would advise me to avoid in the interview?

 

[mariistm]

Finally got round to do WBD test, 6479, that 4 for applied intellect is giving me stress but hopefully enough to move forward 🫠

 

[👩🎓]

For people that applied to PMC but have not heard back - what is the "last update" date for your application on their website? Mine is 04/01, which is the day after the deadline, and idk if that just means they processed my app or if it means they had my answer of PFO/next stage on the 4th?? (In which case it's deffo a PFO but could've been informed ages ago)

I did email them regarding an update about a week and a half ago and haven't heard back so they might still be considering applications 🤞

 

[loe]

Does anyone know if Hogan Lovells is still inviting people to ACs?

 

[Andrei Radu]

Could someone please explain the difference between debt finance and equity finance and what the relative advantages and disadvantages are of each type of financing (in the context of PE), but in a way that would be digestible to a lay person. Why would one be chosen over the other? I’m trying to get my head around it and my brain is simply not willing to co-operate with me at all. Please help. 🥲🥲

@Andrei Radu @Amma Usman @Ram Sabaratnam​

The basic distinction is that with debt financing a company will borrow money from a lender and will in return make a promise to return the initial borrowed sum + an agreed upon interest. With equity financing, the company gets money from an investor but never has to pay the investor back in return. Instead, in exchange for the money the investor gets equity in the company, which is just another term for shares in the company/a percentage of the ownership of the company. Equity financing always takes place when a private company goes public, in that the company issues shares to the public through an IPO and in exchange gets capital which can be used for further growth. However, equity company can also be used by a private company in a private transaction, when existing shareholders agree to sell a part of their shares or issue new shares to a particular investor/group of investors.

To look in more detail at debt financing, the main two methods to obtain it are loans (normally taken from a bank) and bonds (which can be issued to any investors). The difference is that loans normally have to be repaid on a monthly period (the borrower pays a proportional part of the total borrowed sum + interest) while with bonds, the issuer (ie the company that borrowed the money) only has to make the interest payments on a regular basis - the initial borrowed sum (or "the principal") is paid all at once at the end of the agreed upon repayment period (the "maturity date"). While there are a number of other differences that are relevant in assessing the pros/cons of using loans or bonds, for the sake of comparison with equity financing I will look at only advantages and disadvantages that equally apply to both. It should be noted however that in PE generally and for buyouts in particular PE firms normally use highly leveraged loans. Essentially, to minimize the amount of investor capital spent on any transaction (and thus to maximize the total number of profitable transactions a given fund can enter into), a PE firm will normally finance around 75-80% of the cost of a buyout by getting a loan from a bank and then offering as security the assets of the target company itself.

Now, to list some of the main advantages of debt financing I can think of:

• Allows the company (and the controlling PE firm) to keep compete control of the target company. This is particularly important for the PE firm to be able to implement its growth/efficiency improvement plans and its desired exit strategy.
• Allows the PE firm to keep all the dividends and profits from selling the company later on.
• It is often makes for a simpler and more standard negotiation process both for the financing deal and for the actual buyout. For an industry like PE where deals tend to be very fast paced and where targets normally have a number of suitors, this is also a benefit that should not be understated.
• Interest payments are tax-deductible.

Whereas the main advantages of equity financing are:

• It does not add any financial burdens on the target company. This means it should have more capital which can go towards investments in growth rather than repayment of debt. It also decreases risks of insolvency.
• It often means working with institutional investors or huge corporates with significant resources and expertise, which can make them invaluable partners for growing a business. A very successful example of such a relationship is that between Open AI and Microsoft.

 

[confusedbird]

I've PM'd you

Hey, would it be possible for you to share them with me as well? Thank you!!!!

 

[trainee4u]

Finally got round to do WBD test, 6479, that 4 for applied intellect is giving me stress but hopefully enough to move forward 🫠

aren't there also verbal & numerical reasoning scores?

 

[cwhite233]

Could someone please explain the difference between debt finance and equity finance and what the relative advantages and disadvantages are of each type of financing (in the context of PE), but in a way that would be digestible to a lay person. Why would one be chosen over the other? I’m trying to get my head around it and my brain is simply not willing to co-operate with me at all. Please help. 🥲🥲

@Andrei Radu @Amma Usman @Ram Sabaratnam​

I am neither of these people but I do have an understanding of this! On a basic level: debt finance = you, as a company, are raising money by borrowing (e.g. a loan, such as from a bank, a group of banks or credit fund). equity finance = you, as a company, are raising money by issuing shares (aka equity) to either existing or new shareholders of the company (could be other companies or individuals acting as shareholders). These entities or individuals will pay you money for those shares. Very basic pros and cons: if you give equity in your company, that means you are relinquishing/diluting control of the company as equity in a company often gives you voting rights (or if not voting rights, economic rights). You may have a founder who owns 60% of the equity in the company who does not want to lose their controlling stake for example. You may not want to go for debt if interest rates are high, meaning the payments you make on the loan will be higher. If the company already is struggling slightly, further debt could bring in a risk of insolvency. Moreover, depending on the type of company you are, you might not be able to get a loan to begin with (if you're a really small company, the bank would want to secure it against the personal assets of the founders/owners) OR the loan you can get isn't large enough to cover the amount of capital you need to raise.

If you're concerned with debt finance (aka leverage) in a PE context, I suggest researching why leverage is so commonly used in this industry. The short answer is that it boosts returns far more than if you used equity (the committed capital in a PE fund) to finance acquisitions of targets. That's why you'll see ratios of like 70/30 or 60/40 debt to equity ratio. The return on equity is just SO much higher in PE if you use leverage. Part of this is tied to the fact that using debt (and some equity) to finance acquisitions means that a single PE fund can make far more investments using leverage than just using the committed capital of that fund. This is also a reason why PE can be controversial - the debt doesn't sit with the fund or the PE manager or GP....

Hope that helps Definitely more pros and cons than those listed but I wouldn't expect you to need to know more for interview.

 

[desperateTCseeker1998]

Do you think Paul Weiss will send out a third round of invites ? As few received today should I just loose hope for PW? My scores were 21/36 and my answers were above average.

I think they might… I’ve only seen one person get an invite today as well so fingers crossed

 

[desperateTCseeker1998]

Paul, Weiss Interview! Got it at 5:39pm. My SJT scores weren’t that great so guys, don’t loose hope lol!

Congeats!!! To those of us still waiting, this is good news!!

 

[Legallywhatever]

Will the next cycle start in autumn? And will it be for a 2028 intake?

 

[Chris Brown]

The basic distinction is that with debt financing a company will borrow money from a lender and will in return make a promise to return the initial borrowed sum + an agreed upon interest. With equity financing, the company gets money from an investor but never has to pay the investor back in return. Instead, in exchange for the money the investor gets equity in the company, which is just another term for shares in the company/a percentage of the ownership of the company. Equity financing always takes place when a private company goes public, in that the company issues shares to the public through an IPO and in exchange gets capital which can be used for further growth. However, equity company can also be used by a private company in a private transaction, when existing shareholders agree to sell a part of their shares or issue new shares to a particular investor/group of investors.

To look in more detail at debt financing, the main two methods to obtain it are loans (normally taken from a bank) and bonds (which can be issued to any investors). The difference is that loans normally have to be repaid on a monthly period (the borrower pays a proportional part of the total borrowed sum + interest) while with bonds, the issuer (ie the company that borrowed the money) only has to make the interest payments on a regular basis - the initial borrowed sum (or "the principal") is paid all at once at the end of the agreed upon repayment period (the "maturity date"). While there are a number of other differences that are relevant in assessing the pros/cons of using loans or bonds, for the sake of comparison with equity financing I will look at only advantages and disadvantages that equally apply to both. It should be noted however that in PE generally and for buyouts in particular PE firms normally use highly leveraged loans. Essentially, to minimize the amount of investor capital spent on any transaction (and thus to maximize the total number of profitable transactions a given fund can enter into), a PE firm will normally finance around 75-80% of the cost of a buyout by getting a loan from a bank and then offering as security the assets of the target company itself.

Now, to list some of the main advantages of debt financing I can think of:

• Allows the company (and the controlling PE firm) to keep compete control of the target company. This is particularly important for the PE firm to be able to implement its growth/efficiency improvement plans and its desired exit strategy.
• Allows the PE firm to keep all the dividends and profits from selling the company later on.
• It is often makes for a simpler and more standard negotiation process both for the financing deal and for the actual buyout. For an industry like PE where deals tend to be very fast paced and where targets normally have a number of suitors, this is also a benefit that should not be understated.
• Interest payments are tax-deductible.

Whereas the main advantages of equity financing are:

• It does not add any financial burdens on the target company. This means it should have more capital which can go towards investments in growth rather than repayment of debt. It also decreases risks of insolvency.
• It often means working with institutional investors or huge corporates with significant resources and expertise, which can make them invaluable partners for growing a business. A very successful example of such a relationship is that between Open AI and Microsoft.

Thank you so much @Andrei Radu this was so useful. I have been trying to wrap my head around this topic for a couple of days and had virtually no luck at all. This makes it seem somewhat less complicated than I perhaps initially thought it was (the big words probably threw me off). I didn’t realise there was a link between debt finance and insolvency. I might be able to draw on some knowledge I have of insolvency since I did it as an undergraduate module. Once again thank you, you’re literally a life saver. The GOAT has come in clutch. 🐐​

 

[Chris Brown]

Will the next cycle start in autumn? And will it be for a 2028 intake?

Some firms would probably be recruiting for a 2027 start but most would be 2028/29 I think.

The next cycle starts around August / September time for WVS applications.​

 

[Chris Brown]

I am neither of these people but I do have an understanding of this! On a basic level: debt finance = you, as a company, are raising money by borrowing (e.g. a loan, such as from a bank, a group of banks or credit fund). equity finance = you, as a company, are raising money by issuing shares (aka equity) to either existing or new shareholders of the company (could be other companies or individuals acting as shareholders). These entities or individuals will pay you money for those shares. Very basic pros and cons: if you give equity in your company, that means you are relinquishing/diluting control of the company as equity in a company often gives you voting rights (or if not voting rights, economic rights). You may have a founder who owns 60% of the equity in the company who does not want to lose their controlling stake for example. You may not want to go for debt if interest rates are high, meaning the payments you make on the loan will be higher. If the company already is struggling slightly, further debt could bring in a risk of insolvency. Moreover, depending on the type of company you are, you might not be able to get a loan to begin with (if you're a really small company, the bank would want to secure it against the personal assets of the founders/owners) OR the loan you can get isn't large enough to cover the amount of capital you need to raise.

If you're concerned with debt finance (aka leverage) in a PE context, I suggest researching why leverage is so commonly used in this industry. The short answer is that it boosts returns far more than if you used equity (the committed capital in a PE fund) to finance acquisitions of targets. That's why you'll see ratios of like 70/30 or 60/40 debt to equity ratio. The return on equity is just SO much higher in PE if you use leverage. Part of this is tied to the fact that using debt (and some equity) to finance acquisitions means that a single PE fund can make far more investments using leverage than just using the committed capital of that fund. This is also a reason why PE can be controversial - the debt doesn't sit with the fund or the PE manager or GP - it sits with, you guessed it, the company that the PE firm bought and will eventually sell off, and partly because of this, not every company that gets bought by PE has a happy ending!

Hope that helps Definitely more pros and cons than those listed but I wouldn't expect you to need to know more for interview.

Thank you @cwhite233 this was super helpful! There seems to be an overlap of basic company law concepts with debt and equity finance based on what you said (I did company law at uni so hoping I’m not as cooked as I thought I would be). This topic will definitely take some time to understand properly, but this post has made it more digestible. I appreciate the help a lot! 🙂​