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Lawyers at these firms found you could name a preposterous hourly rate, and the banks would hardly blink.<ref>In the 1990s, £350 pounds was a preposterous hourly rate. The preposterity has not been tempwered with time: the going rate for a magic circle equity partner, at the time of writing, displays a sustained contempt for gravity and the general principles of mean reversion, and is more like £1,000. To give you some idea of the scale here, when the [[JC]] first stepped onto Southampton dock, from the slow-boat from the South Seas in the late 1990s, the biggest transaction he had ever worked on was about seven million Australian dollars. Within a year in London, he had worked on at least one deal where the ''legal bill'' was bigger than that.</ref> | Lawyers at these firms found you could name a preposterous hourly rate, and the banks would hardly blink.<ref>In the 1990s, £350 pounds was a preposterous hourly rate. The preposterity has not been tempwered with time: the going rate for a magic circle equity partner, at the time of writing, displays a sustained contempt for gravity and the general principles of mean reversion, and is more like £1,000. To give you some idea of the scale here, when the [[JC]] first stepped onto Southampton dock, from the slow-boat from the South Seas in the late 1990s, the biggest transaction he had ever worked on was about seven million Australian dollars. Within a year in London, he had worked on at least one deal where the ''legal bill'' was bigger than that.</ref> | ||
After all, work needed to be done, and it was the lawyers who would usually do the hard yards, churning out thousands of pages of [[verbiage]], running down every quixotic idea, accommodating every spurious risk factor that the issuer’s finance director could confect. The lawyers regularly worked through the night to meet an artificial deadline imposed by | After all, work needed to be done, and it was the lawyers who would usually do the hard yards, churning out thousands of pages of [[verbiage]], running down every quixotic idea, accommodating every spurious risk factor, war-gaming every nightmare market that the issuer’s finance director could confect. The lawyers regularly worked through the night to meet an artificial deadline imposed by a junior analyst who, when it was met, would ignore the proffered draft for a couple of days before advising, without remorse, that he’d forgotten to mention the deal changed Thursday last, and the draft — knocked up in lieu of a long-planned anniversary dinner — hadn’t been needed in the first place. | ||
====The rise of the [[Magic circle law firm|magic circle]]==== | ====The rise of the [[Magic circle law firm|magic circle]]==== | ||
Forged of these fires was | Forged of these fires was the [[Magic circle law firm|magic circle]], a concept which has been with us since at least the time of the [[First Men]] and, yea, even unto the primordial pagan era before them when [[Children of the Forest]] roamed the [[Bretton Woods|Woods of Bretton]]. The business model was simple: a form of intellectual rope-a-dope: we will turn heaven and earth to document whatever you require us to document, whenever you want it, with two considerations: firstly, our [[legal opinion]] will disavow responsibility for all the stupid things you made us put in the document, and secondly you will pay us handsomely, by the hour, without question, for doing so. Our end of the bargain is our blood, sweat, toil and tears, expended in the pursuit of whatever hare-brained intellectual contrivance should catch your fancy. Yours is to pay, through the nose, for the privilege. | ||
Since, in the context of a two-hundred million dollar deal, ''whatever'' we ask you to pay us will be a drop in the ocean, everyone wins. | |||
As the roaring nineties wore on, the deal pipeline grew ever fatter. [[The Jolly Contrarian:About| | For many years, this state of affairs was all fine and capital: everyone clipped their ticket, lived prettily and maintained nice homes in the stock-broker belt to and from which they commuted each day in late-model German cars. In house legal barely got a look in, but to trot along to companies house every now and then to have a [[Slavenburg]] rejected. It was the corporate end-clients who paid for it, after all, and since their executives were commuting from the same stock-broker belt, in the same sorts of cars, they weren’t any more bothered about it than anyone else. | ||
As the roaring nineties wore on, the deal pipeline grew ever fatter. [[The Jolly Contrarian:About|Fortune-seeking young contrarians]] started pitching up in London from all sorts of far flung places clutching foreign degree certificates and the phone number for Robert Walters. Law firms hired them without question, rightly supposing they would work like Spartans for a pittance before buggering off after a couple of years to spend the rest of their lives pleasure-boating on Auckland harbour and kicking the crap out of the rest of the world at Rugby Union. A handful stayed. | |||
====The weaponised legal department==== | ====The weaponised legal department==== | ||
As the deals came through ever faster the bankers began to wonder whether they could rationalise that legal spend a bit. “The less we spend on the legals,” they reasoned, “the nicer our German cars will be.” | As the deals came through ever faster the bankers began to wonder whether they could rationalise that legal spend a bit. “The less we spend on the legals,” they reasoned, “the nicer our German cars will be.” | ||