The day is finally here. IT has set you up with a brand-new laptop, you’ve decked out your home office, you’ve done a tech check, and you’re ready to get to work. Congrats on starting your job as a first-year Biglaw associate!
Once new associate orientation and training is over, it’s go time. So you sit, and you wait for that very first “Assignment” email from the assignment coordinator to come across.
You probably have some sense of what kind of work your firm does from your time as a summer associate, but you can only learn so much during a 10-week period that is focused more on socializing than on the work itself.
Some summer associates might not have even rotated through all or any of the groups they actually want to work with. When I was a summer associate, I decided to give a rotation in litigation a shot, mainly to rule it out (which I promptly did). That means I only had about five weeks of work with any of the corporate groups.
Two of those weeks were spent in the actual physical library trying to research the difference between “material adverse event” and “material adverse change,” which, to this day, I’m not sure of the difference. Needless to say, I had close to zero knowledge of what a corporate associate actually did when I started working as one.
If you’re anything like I was, you’re probably wondering what the work – the actual, billable work – will look like when you begin your job as a first-year associate. Or, if you’re like many of the law students I spoke with over the summer, you’re wondering things like “what is this ‘signature page’ thing all about?” or “how do I possibly go about drafting a legal document in one day?” Let me explain!
In Part 1 of this post, I’m going to explain four of the top eight common assignments Biglaw junior associates, including brand-new first-year associates, will very likely encounter. Part 2 will follow later this week with, you guessed it, the remaining four common assignments.
While a lot of things about the Biglaw experience are the same for litigation and corporate lawyers, the actual work itself is quite different. Since I was a Capital Markets associate, I’m just going to speak to the transactional associates this time around. Let’s dive in!
1. Due Diligence
In a corporate transaction, due diligence is the process of reviewing documents to uncover everything you can about the other side.
In a transaction involving a structuring bank (like most Capital Markets deals have), the bank’s law firm will usually be tasked with conducting due diligence on a company. In an M&A transaction, the company looking to purchase the other company will hire lawyers to conduct due diligence on the target company.
Put it another way, in an M&A transaction, a company purchasing another company will want to know exactly what it’s getting in order to settle on a purchase price. What are the potential liabilities? What are the roadblocks preventing the transaction from proceeding that have to be cleared before closing? Is there something preventing the deal from going forward?
In a capital markets transaction, all material information must be shared with prospective investors in an offering memorandum. The bank arranging the transaction has the duty to investigate and make these disclosures so that investors can make an informed decision about whether or not to invest. E.g., what are the risks to owning shares or investing money in this company? They must all be disclosed! You discover and learn exactly what to disclose during the due diligence process.
Where do first-year Biglaw associates fit in to the due diligence process? Well, guess whose job it is to go through all of the thousands of documents the other side will turn over to your client? That’s right, you guessed it, junior associates!
Senior associates will “run” the due diligence project and dole out batches of documents to the more junior associates on the team. (There is usually a team of associates, depending on how large the project is, because due diligence must be thorough and must be completed on a tight timeline).
The senior lawyers are there to give guidance, answer questions and deal with any issues that are found. But it really is the junior associate’s job to thoroughly review the documents and bring any issues to the attention of the senior associates and partners, who will then discuss them with the clients.
Let’s review an example of a due diligence task you might be assigned: reviewing vendor contracts, focusing specifically on the assignment clause.
In this example, your firm represents a company involved in a Capital Markets transaction that requires moving their business and all its main assets to a newly created affiliate. Your task will be to review the vendor contracts that the company is a party to in order to make sure nothing in those contracts prevents the company from assigning its obligations and rights over to a new entity.
What will you look for? Maybe the contract is freely assignable. But maybe notice is required. Or permission from the other party. As the junior associate, you’ll review all of the vendor contracts, focusing on the assignment clause, checking for things like that. You’ll then prepare a chart for the team and the client detailing what the various assignment clauses require and what action steps the client needs to take to satisfy the requirements before the transaction can close.
This is just one small example of a due diligence assignment. There are tons of different types of due diligence, and you’ll likely encounter many during your first couple of years in Biglaw. It’s not important to understand exactly how to conduct due diligence yet (your team will explain the detailed assignment to you when the time comes). Just keep in mind that the main goal of due diligence is to learn the ins and outs of a company and discover all information that is relevant to your transaction.
2. Transaction Document Drafting
Indentures, credit agreements, note purchase agreements…the list goes on and on, and these are all examples of various transaction documents that need to be drafted for every deal. These documents can all be hundreds of pages long! And sometimes they need to be drafted on an extremely tight timeline. Like, within a day! What??? How could this possibly be???
The answer is simple: hardly anything in Biglaw is drafted from scratch.
How do you draft, then? From precedent – always. Precedent, or prior deal documents, is your best friend as a first-year associate. How does a drafting assignment usually go down?
A client will call a senior lawyer and say they have a new deal and need to review a draft ASAP. They will pass along new deal terms. The senior lawyer will give the junior associate the precedent document (or tell them where on the firm’s vast document management system to find it). That’s version one. Then, you’ll create a new version and begin implementing changes – first, easy ones like changing all party names and dates, and making any updates the client has already provided.
Sometimes the changes are extensive, sometimes not so much. When a transaction is truly novel, even a senior lawyer won’t start with a blank page. Instead, they, too, will turn to precedent. This time, though, they’ll make extensive drafting changes to the document, and will likely pull provisions and sections from more than one precedent deal.
So, yes, junior associates will draft documents. They will often be asked to “take the first crack” at it. But, don’t worry, you will be given guidance and a firm-proven model to work from.
Anything that you don’t understand or can’t figure out how to draft, you should flag for a senior lawyer to discuss and review. You’ll either sit down and draft it together if they have the time and the inclination to teach (many will, but not all), or they may just take over from there and finish up when they review your draft.
Easy as that! This whole process could take days, depending on how extensive the changes are, or hours, if the changes are minimal and the client is in a rush.
Yes, as a first-year associate, you will negotiate! Will you be leading negotiations and winning points left and right in a room filled with partners and clients? No. Nevertheless, you will begin to deal with comments and negotiate points from the very beginning of your Biglaw career. Usually, a first-year associate will learn negotiation skills by negotiating with two types of people: junior associates on the other side and the more “minor” players on the transaction.
What, exactly, will be up for negotiation and who, exactly, will you be dealing with?
First, let’s talk about what you will not be expected to do. You will not be expected to receive comments on a document and be able to address them on your own, deciding which are ok to accept and which are not. The first time you receive a mark-up you will probably review every single comment (save typos and things like that) with a senior lawyer. After you’ve done a transaction a few times, you’ll be able to recognize what comments are ok to take and what you’ll need to discuss with someone more senior or the client, but this takes time.
So back to the negotiations. When you receive a mark-up and review it with a senior lawyer on your team, they may ask you to either (1) call the other side to negotiate a few specific points or (2) incorporate the comments your team has decided to accept and then call the other side to explain your side’s reasoning.
Usually, you will call your counterpart at the other law firm – another junior associate. Still, sometimes there won’t be a junior, and you’ll have to speak with someone more senior, including partners.
Will you be able to do this perfectly? Of course not! But it is relatively low stakes and a great way to practice your negotiation and conversation skills. When in doubt, you can always tell the other side that you’ll have to discuss the point internally or with your client and that you’ll “circle back” later (circle back is code word for “I have no idea what you’re talking about, but I’m writing it down word for word so I can hopefully relay the message to the partner and we can figure it out together later”).
Other common parties that junior associates deal with directly are the more “minor” players on a deal. For example, many corporate transactions involve Cayman Islands entities, so Cayman counsel will provide comments regarding Cayman law. Because their role is very limited, their comments are usually minor and can be dealt with by very junior associates (especially after you’ve seen similar comments before – they tend to send the same comments on all deals).
Just be careful never to dismiss these as insignificant if you don’t really understand them! Sometimes something seemingly innocuous can be very important! I found this out the hard way when I accepted a FACTA (tax) comment I shouldn’t have….
4. Signature Pages / Closing Coordination
I’ve had multiple law students ask me about this, so I guess, somehow, the word is out that one of the key jobs of a first-year associate is to collect signature pages. While this is partly true, the task of “sig pages” is so much more than that.
First, being in charge of sig page coordination means that you are in charge of the transaction’s closing checklist and need to have a general understanding of all of the documents involved in the deal. In some massive M&A transactions, this could be hundreds of documents! Usually, it will be a more reasonable amount, but, nonetheless, at least twenty.
Signature page collection is not simply tracking down senior bankers and company management for their signatures (although it does involve this). It’s making sure all pages are accounted for and received and are properly executed (e.g., did the right officers and board members sign, in the correct role and title, for the correct entity, so that the executed document is actually valid?).
As a transaction comes to a close, documents are always in flux and being changed and added. A last-minute officer’s certificate might suddenly be required. When this happens, while the partner negotiates the terms of the certificate, you better be on top of your job and working on getting the new signature pages to the right people so that you have the executed pages in hand by the time the closing comes around.
Signature page collection (which, by the way, is almost always electronic at this point) and closing coordination is not the most glamorous job, but it is vital to the transaction. Let’s just say you don’t want to be the junior associate on a transaction that can’t close when the client wants it to because you didn’t ask for and get all of the right signature pages!
Lastly, signature page collection / closing coordination is one of the best ways to really begin to understand all that is involved in a deal. While you won’t understand every document yet, you’ll begin to get a sense of which ones make up the pieces of a complete transaction. Little by little, you’ll get to work on each of these documents and will understand how they fit in the transaction. For now, just knowing that they exist and are necessary to close that kind of deal is enough.