Keeping it real

There's a lot more to commercial real estate law than the buying and selling of big buildings. Jane Edwards explains

What does commercial real estate work involve?

It can include a very wide range of transactions involving real estate. For example, we act for landlords and tenants on commercial lease transactions. We buy and sell land and buildings. We also help clients raise the finance needed to buy or develop their property. Development work is particularly exciting, as you are involved for the long haul, from acquiring the site and helping clients obtain planning permission, through to and appointing contractors and professionals to design and build the scheme. An example would be the Emirates Stadium, where we acted for Arsenal Football Club on the financing and development of their new stadium. As an Arsenal fan, it was particularly rewarding for me to be part of that team! We are acting for Lend Lease on their development of the Athletes' Village for the 2012 Olympic Games. We also do a lot of corporate M&A work, where real estate is often the main value or risk in the transaction and therefore directly affects the pricing.

Do you personally do all this different work?

Yes, at Slaughter and May we try to ensure that our lawyers are what we call multispecialists. This means that, even in specialist departments such as mine, we do everything that relates to commercial real estate. We don't have lawyers who only do leases or only act for landlords. We think that the variety makes the job more interesting. It also produces better lawyers for our clients with a breadth and depth of experience and the confidence to deal with new challenges.

What does the corporate M&A work involve?

In any merger or acquisition deal there's almost always property involved. Sometimes it can be a relatively minor part of the deal but still important. For example, a client effecting a takeover may already have a head office and, although it wants to acquire the business of the target company, it may not want or need to end up with two expensive head offices. You might advise the client on which lease to get rid of or how it might, for example, sublet the space. That's one end of the scale. You could also work on transactions where real estate is the reason for the whole deal. For example, an investor may wish to acquire a whole portfolio of properties which are vested in companies. They may choose to buy the companies rather than the property, perhaps for tax reasons. Or you might work on a merger between two large retail organisations which each have a large number of shops. They would look strategically at things like where those shops are, how they are held, how much the rent is and how long they have left on each lease, in order to value the target business. It's very real, very tangible work and that's why I find it interesting.

What does the financing work involve?

Let's say a client was buying property as an investment and needed to raise debt to buy that property. We would act for the client in its negotiations with the banks and negotiate the terms of the lending. The loan will impose various restrictions on the client's dealings with the property. It's important that those restrictions are workable in practice. If you need the bank's consent to wash the windows then it wouldn't work. You need to make sure that all the operational restrictions in the loan agreement actually work for your client in practice and are not going to be too restrictive.

Has your work been affected by the financial crisis?

Yes, it has. Because of the crisis there's less debt-funding available, which the private equity buyers traditionally relied upon for transactions involving property. They have been unable to invest at the same level and there are fewer smaller and mid-level transactions going on. But that doesn't mean that nothing's happening. So, for example the firm has recently acted on the acquisition of Gatwick airport for Global Infrastructure Partners (GIP); we are acting for Cadbury's in relation to the bid that's been made by Kraft and we're acting for BA in the merger discussions with Iberia (see page 9). Also our multispecialist approach means that our lawyers can move across from doing, say, a private equity acquisition to working on other very busy areas like restructuring. We have been busy acting for H.M. Treasury throughout the financial crisis in relation to the bank bailouts. Just because we are in a recession it doesn't mean that nothing is happening, but the balance of the work we do has changed.

What do you look for in graduates?

Our trainees are from every type of degree background; fifty per cent of our trainees did not study law at university. At the firm we have people who graduated with humanities, languages, sciences and mathematics degrees. It doesn't matter what you've studied as long as you are bright, interested in commerce, enthusiastic and willing to learn.

Do you have any advice for graduates who are thinking of applying for a training contract?

The application process here is very simple. It's a CV and a covering letter submitted online and a forty minute interview with two partners. That's it. It's important for the candidate to try to relax at interview and remember that the partners interviewing them want to employ them. Some firms choose to run two or three day assessments. That's not what we do. We focus on getting to know the individual by talking to them about their experiences and their CV. There is no such thing as a "Slaughter and May type".

On a CV we're not looking for someone to have climbed every mountain and done every type of legal work experience out there. It's often not possible to get summer or Christmas legal work placements because places are limited and it is very competitive, but there are other ways to show us that you have an interest in commerce and an interest in the way that the City works. For example, I interviewed someone recently who's going to do some work experience with a political thinktank. They have also done some work experience in an M&A team at an investment bank. They have read about what City work entails and have a range of interesting experiences. They haven't just ticked off the law work experience roles over the years. Clearly some legal work experience is useful to make sure that it's what you want to do but, more than anything, we're looking for bright, well-rounded, focused individuals.

Comments