Private practice lawyer
A spotter’s guide to the men and women of finance.
There is a Rake’s Progress of attorney from private practice lawyer to inhouse counsel to structurer (with sickly branches peeling off towards human resources and head-hunter: whether those latter feeble strands are some kind of nascent Darwinian evolution we are witnessing in real-time, or simply a descent into decadent madness is a question on which the different constituents have their own opinions).
But those who stay the course, who don’t evolve, or adapt, but keep within their darkened partnerships, thriving in that gloomy cove, are a tough breed. They are like cockroaches — or, more flatteringly, Toyota Hiluxes — they will do whatever you ask, and will just keep going until you tell them to stop. The more tedious, the more compendious, the more laden with unmanageable complexity, the better. They may not sleep for three days; their complexions may take on a clammy green sheen, they may subsisting on tea, pizza and prescription amphetamines, but they will endure, their massive command of structural and documentational complexity intact.
Lawyers may be obliged by entry-barrier perpetuating regulations to maintain professional indemnity insurance but their no-claims bonus is safe. Even when it all goes pear-shaped — deals like this often do — it will be impossible to trace that failing back to them: How could anyone, not across that whole body of information, hope to? The germ of dissolution, if it is their fault, will be so deeply buried in some third side-letter to the series proposal for the fourth tranche of the mezzanine financing leg that no-one else has a hope of finding it, let alone seeing it for the smoking gun it purportedly is.
Will say: “This time-line is very aggressive. We don’t have time for a term-sheet: Let’s go straight to docs.”
Won’t say: “Seems fine to me. No comments.”
The loss of subject matter expertise
The sainted history of the eye-ess-dee-aye, and how its carriage has descended through the ranks of solemn wizardry to its present low state, pushed about by school leavers in failed communist states is recounted in our downgrading article. The negotiation of standard master agreements — especially the securities financing ones — has now passed so far down the “value chain” that private practice lawyers are positively destructive to the negotiation process, having none of the “metis” required to competently advise. It is amusing, but alarming, when apparently sophisticated asset managers outsource their contract negotiation to second-tier law firms anxious (late in the day) to get a piece of the derivatives action, who then resolutely bugger everything up for everyone else, not understanding foundational, if counterintuitive, aspects of the market, insisting on indemnities, close-outs for run-of-the-mill settlement failures, and to reserve rights to seek replacement costs and even consequential losses way of damages for non-performance under stock loans.
Folks: if it hiring a negotiator knock out your GMRAs seems extravagant, getting a trainee at Tubb Fuller Breaden Potter Bacon to have a go at £200/hr is positively prodigal. Especially since she won’t have a Scooby-Doo what she’s doing.
In a nutshell, your average negotiator — okay, maybe not a School-leaver from Bucharest, yet, but generally — has forgotten more than any private practice lawyer these days knows about the Global Master Repurchase Agreement, 2010 GMSLA and probably the architecture of the ISDA Master Agreement too. But does this stop institutions, who really should know better, blowing their own money and everyone else’s time and patience, on private practice lawyers?
It does not.