The legal market: An A-Z Guide
Published: 29 Jan 2018
If you’re planning on becoming a lawyer it’s best that you get to grips with the relevant jargon. It will soon become second nature and none of it is particularly difficult, but it’s still worth swotting up ahead of an interview to avoid being stumped by any unforeseen acronyms.
ABS (Alternative Business Structure) – The model by which non-law companies are able to invest in law firms and provide legal services, following the implementation of the Legal Services Act 2007.
Antitrust – Laws to discourage anti-competitive behaviour among companies, such as monopolies, cartels and restrictive practices. The term originates from the US, where cartels formed ‘trusts’ in order to bully smaller companies.
Arbitration v Mediation v Litigation – All are methods of resolving disputes, therefore known collectively as Dispute Resolution. Only litigation involves going to court. Arbitration is an attempt to reach agreement (arbitration agreement) using an umpire and is legally binding. Mediation is a less formal, voluntary process and there is no legally binding outcome.
Associate v Assistant – Both are qualified solicitors who have not yet been elevated to the firm’s partnership. Associate is an Americanism and is sometimes used as a middle-ground promotion between assistant and partner.
Bench – The judges or magistrates in a court.
Best Friends – Law firms with no formal links or financial ties but who give each other first preference when referring work. Usually an international arrangement between firms in different jurisdictions.
Billable hours – Also known as chargeable time, it is the legal work undertaken that can justifiably be charged to the client, eg would not include redrafting a document chewed in the photocopier.
Brief – The document of instructions from a solicitor to a barrister. Includes facts of the case and outlines what the solicitor would like the barrister do to.
Bond – Similar to a loan, the bond is an IOU issued by a company or government in return for money provided by investors (bondholders). One of many methods of raising capital, it is a form of debt.
CSR (Corporate Social Responsibility) – How firms manage their business processes to produce an overall positive impact on society, including areas such as environmental impact management, corporate governance, diversity and the way in which the firm responds to the needs of the wider community.
Called to the Bar – The ceremony whereby members of the Inns of Court become qualified barristers.
Chambers – The rooms (offices) occupied by a group of barristers who share overheads.
Counsel – Another term for barrister.
Data room – A room set up during a corporate transaction where the purchaser’s advisers can conduct due diligence on the target company’s accounts and activities.
Debt – Money borrowed by companies, such as loans or bonds.
Derivatives – A spin-off of financial products such as shares or bonds. Derivatives include futures and options.
Due diligence – The detailed study of information about a company, such as its accounts and activities, prior to an acquisition or take-over.
Equity – Shares in a company.
Equity partner v Non-equity partner – Equity partners collectively own the firm because they have bought a share of the business and therefore receive a cut of the profits. Non-equity partners have been professionally promoted but have not yet bought a share in the business and receive only a salary.
Fee-earner – Anyone who conducts legal work that can be charged to a client. Includes trainees, paralegals and legal executives, but not secretaries.
Firm – A business model comprising a partnership of individuals (partners). Contrasts with a company comprising directors, executives and a chairman. Most law businesses are firms rather than companies. Increasingly, many are becoming LLPs (see below).
Flotation – The admission of a new company to a stock exchange, so that its shares can be traded publicly. See IPO.
GDL (Graduate Diploma in Law) – also known as the Common Professional Examination (CPE). A one-year conversion course to law for non-law graduates.
Hostile bid – An attempt to acquire a company without the approval of the target’s shareholders/owners.
IPO (Initial Public Offering) – The offer of a company’s shares on a stock market. Also known as a flotation, it occurs when the privately owned shares in a company become publicly traded for the first time.
In-house lawyer – A solicitor (or sometimes, a barrister) working for a company or public body instead of a law firm or set of chambers.
Inns of Court – Four administrative bodies within the Bar – Inner Temple, Middle Temple, Gray’s Inn and Lincoln’s Inn. Each barrister and student barrister must belong to one.
IP (Intellectual Property) – An umbrella term covering copyright, patent and trade mark law. An area of the law which serves to protect a company or individual’s products or work from unauthorised use.
Junior – How you will feel for much of your training contract! Also, the secondary barrister at trial, i.e. Senior/Lead counsel and Junior counsel (see L below).
LLP – A halfway house between a partnership and a limited company. Limits the partners’ personal liability in the event of debt.
Lead counsel v Junior counsel – Lead counsel is the barrister who leads the advocacy in court, i.e. makes the opening speech, often a QC (see below). The junior assists with the case and advocacy and, despite the name, is also very experienced.
Legal Services Act 2007 – An Act of Parliament that liberalises the market for legal services in England and Wales. Implemented in 2011, the act allows non-lawyers to own and operate law firms for the first time (see ‘Alternative Business Structures’), and enables companies such as banks and even supermarkets to provide legal advice in some areas, such as wills and conveyancing.
Lockstep – The different pay levels awarded to partners, dependent on years of service rather than legal ability. Contrasts with the US system of ‘eat what you kill’, where pay is equated to number of hours billed.
M&A (Mergers and acquisitions) – The area of legal practice specialising in advising companies on merging with, or buying, other companies. Comprises the bulk of corporate work.
Magic Circle – Colloquial term referring to five UK law firms that have historically led the market in terms of corporate work, size and profits – Allen & Overy LLP; Clifford Chance LLP; Freshfields Bruckhaus Deringer; Linklaters; Slaughter and May.
Managing partner v Senior partner – The MP is the main boss of a law firm and runs the business internally; in large firms, the MP is too busy to do fee-earning work. The SP is a firm ambassador, focusing on client relationships externally and combines the role with fee-earning.
NQ (Newly-Qualified) – Refers to a lawyer in their first year of qualified legal practice, ie a lawyer who has successfully completed their training contract and has been admitted by the Law Society as a qualified solicitor.
Of-counsel – American term for certain senior lawyers who are not partners.
PEP (Profits per equity partner) – A partner’s annual share of their firm’s profits.
PPP/PFI (Public Private Partnership/Private Finance Initiative) – Forms of funding, typically for major public infrastructure such as roads, hospitals and prisons. Funding and operation is a collaboration between the government and private sector companies.
PQE (Post-qualification experience) – The number of years in legal practice since qualifying as a lawyer.
Paralegal – A legal assistant who is not a qualified solicitor or barrister. Typically has some legal training or experience.
Private equity – An area of legal practice advising on the funding (through shares or loans) provided by specialist organisations to unquoted companies.
Private practice – Working in a law firm or as a sole practitioner, rather than in-house at a company or in the public sector.
Pro bono – Latin term meaning ‘for the good’. Legal advice and assistance provided voluntarily and without charge.
Pupil – Trainee barrister working at a set of chambers.
Pupilmaster – Fully-qualified barrister who supervises the pupil.
QC (Queen’s Counsel) – A senior barrister who has been selected by the Lord Chancellor to qualify for this most senior rank. Also known as a ‘Silk’ due to robe worn in court.
Queen’s Bench Division v Chancery Division – Two of three subdivisions of the High Court (the third is the Family Division). The Queen’s Bench hears cases such as contract and tort, and includes the Commercial Court and Admiralty Court. The Chancery handles matters such as equity, trusts, probate and bankruptcy, and includes the Companies Court and Patents Court.
Rainmaker – A hot-shot lawyer who brings lots of deals and money into the firm, and generally ‘makes things happen’.
Rights of audience – Suitably qualified to undertake advocacy in court.
Seat - The name for a stint in a particular department within a law firm during a training contract. Seats usually last between three and six months but could be longer.
Securities – Forms of investment in a company, can either be shares (equity) or bonds (debt).
Securitisation – A method of raising finance by obtaining loans that are ‘secured’ against a particular asset of the company (asset-backed loan). The loans go into a Special Purpose Vehicle and therefore do not appear on the company’s balance sheet.
Set – A group of barristers trading under a common name. Another word for Chambers.
Solicitor advocate – A solicitor with special qualifications to allow him/her rights of audience in court. Avoids the requirement to hire a barrister.
TMT (Telecoms, Media and Technology) – An area of legal practice or law firm department, specialising in advising companies and individuals working in these sectors.
Tenant – A qualified barrister with permanent rooms in a set of chambers.
Training contract - A two-year training period which ends with qualifying as a solicitor. Trainee solicitors are usually required to gain experience in at least three different areas of law during their training contract.
Trade mark attorney – Professionals (Registered Trade Mark Agents – not solicitors or barristers) who specialise in advising clients on trade mark rights. May work in-house in companies or in private practice.
Vanilla – Or plain vanilla. Finance terminology meaning no unusual features. E.g. plain vanilla options or swaps.
Venture capital – Money provided by specialist organisations to invest in companies not listed on the stock exchange. Sometimes referred to as private equity and can be used to fund MBO/MBIs, for example.
Wet and dry shipping – Both are specialist areas of legal practice. Wet shipping (also known as admiralty) involves advice on collisions, damage and salvage. Dry shipping is advice on carriage of goods contracts (charterparties) and cargo claims.
White-collar crime – Crime involving business and finance irregularities, such as fraud and tax evasion.