A period of frenzied corporate dealmaking has heightened the need for lawyers who can advise on cross-border transactions, with a war for talent sending the pay of junior and mid-career lawyers soaring to fresh peaks.
This is welcome news for graduates of the world’s elite law schools, which feed the most prestigious firms, and especially those students taking LL.M. courses that specialize in corporate law, which is having its moment in the sun, as rising geopolitical tensions and the coronavirus pandemic make cross-border negotiations a more delicate undertaking.
Several of the world’s leading schools of law offer LL.M. programs in corporate law, which include University of Cambridge Faculty of Law in the UK, New York University (NYU) School of Law, and National University of Singapore (NUS) Faculty of Law.
The lavish pay is being driven up by the increasing demand for legal expertise at a time when the global M&A market is enjoying a hot streak. In the six months to June, private equity firms alone struck a record-breaking $500 billion worth of deals.
Cross-cultural skills and cross-border transactions
Several Big Law firms have reported their best ever financial results because of the soaring demand for corporate lawyers. “There is always demand for lawyers to work on M&A deals, and recent reports suggest that competition between US and UK law firms is driving up salaries very rapidly,” says Andrew Johnston, professor of company law and corporate governance at University of Warwick School of Law, in the UK.
He says the hallmarks of a successful deals lawyer include knowledge of local law, along with attention to detail. “But because cross-border deals involve more than one legal system, cross-cultural communication skills are also essential,” says Johnston.
“Lawyers will have to deal with counterparts in other jurisdictions who are advising on the local rules, whether as they relate to the conduct of takeovers, financing arrangements or possible requirements for government approval.”
The LL.M. programs at Warwick are globally focused and allow students to focus on Commercial Law, International Corporate Governance, and Financial Regulation along with International Economic Law.
Johnston leads a module on the Regulation of M&A, which gives students a critical overview of the regulatory regime and policy considerations. As well as careful consideration of the UK takeover regime, students in the course adopt comparative perspectives and explore the growing role of institutional investors in deals.
“This can be seen very clearly in the current situation surrounding the outcome of the private equity bids for Morrison’s supermarket in the UK,” says Johnston, citing the trio of private investment groups that struck a £9.5 billion deal to acquire Britain’s fourth-largest supermarket chain in July.
Navigating Covid-related uncertainty
Lawyers who are effective in these cross-border deals tend to have “an awareness of what one does not know and access to people who know, and an ability to coordinate with others around the globe”, says Professor Michael Klausner, who leads the LL.M. program in Corporate Governance and Practice at Stanford Law School in California.
That’s in addition to sophisticated negotiation skills, an ability to think creatively, and a willingness to invest the time and energy needed to work through unique challenges, says Professor Geoff Krouse, who teaches Mergers and Acquisitions at Duke Law School in North Carolina.
“Of course, having a strong command of the substantive law and meaningful knowledge of various elements of the deal process are also very important,” says Krouse, the Assistant Dean for Alumni and Development.
Like in all areas of our lives, he says Covid has introduced an additional layer of uncertainty in a world where cross-border deals already encounter numerous issues beyond the control of the parties, such as regulatory approvals, acquisition currency risk, compliance with unusual foreign laws, and other items which impact deal certainty.
“Specifically, force majeure and similar provisions in deal documents have been tested in numerous M&A transactions as a result of the pandemic,” Krouse says. “In addition, Covid has negatively impacted certain businesses or caused significant delays in global supply chains, which can be particularly problematic in cross-border deals.”
At Duke Law, LL.M. students have several opportunities to train for these sophisticated transactions. The school has a deep bench of semester-long transaction and corporate law courses, including Business Associations, Commercial Law, Securities Regulation, M&A, Deal Skills, Negotiations, and many more.
Students can also take certain classes offered in the MBA program at Duke University’s Fuqua School of Business, learning substantive US business law while developing “softer” skills like communication and collaboration.
In addition, there are short, skills-based courses led by prominent legal practitioners. Students can also complete off-campus externships with the in-house departments of multinational corporations, or join one of 11 legal clinics at Duke law.
“These experiential opportunities allow students to work with real clients and supplement their substantive legal knowledge with many practical skills such as communicating with clients, meeting deadlines, and dealing with other real-world issues,” says Krouse.
Heightened geopolitical tensions
Meanwhile, law schools are having to take into account how cross-border deals are evolving amid heightened geopolitical tensions. At the center of such tensions is the role of China as it continues to grow its economy and expand internationally, says Professor Don De Amicis, faculty co-director of the Center on Transnational Business and the Law, at Georgetown Law in Washington DC.
“M&A transactions in certain sectors that raise national security concerns will not take place, or will be approved with regulatory conditions that may require divestitures or corporate governance changes,” he says.
De Amicis expects that cross-border deals will see lengthened deal timelines and market uncertainty, along with buyers being forced to conduct more due diligence on issues where government approval is required. In addition, he expects more rigorous review by national authorities of anti-trust and competition law filings for M&A transactions.
The classes offered at Georgetown Law are designed to provide LL.M. students with an understanding of the roles and responsibilities of international stakeholders. The school offers hundreds of related classes each semester, and students have additional opportunities outside of the classroom at dozens of student organizations, centers, and institutes such as the Center on Transnational Business and the Law.
“Additionally, thanks to our Washington DC location, our students can enroll in externships at different international organizations, law firms, and multilateral institutions here in the nation’s capital that complement their legal education,” says Andrea Rodriguez Escobedo, director of International LL.M. programs at Georgetown Law.