TOGETHER WITH…

In today’s email:

• Music festivals near you

• Fieldfisher goes to Milan

• Sidley tops $200m in London

• Lawyers are too slow to get paid

• Actual footage of the SQE marking process

• Can you beat this grandma at a word puzzle?

• Airlines want to use fuel made from human waste

… and more!

EDITOR’S RAMBLE 🗣

I didn’t know what to feel when I saw the SQE news this week.

175 applicants were told they failed.

They were also told there wasn’t any right to request a remark because Kaplan’s marking system was foolproof.

I’ll say that again:

They were told the marking system was FOOLPROOF.

It’s so shocking that you just have to laugh (if you don’t laugh, you’ll probably cry).

Turns out Kaplan only reviewed the marking after receiving a bunch of requests from applicants asking for them to remark their paper.

Now it’s too late, though.

The damage has been done. Confidence in the SQE is down again. Training contracts have even been lost.

Aspiring lawyers deserve better.

- Idin

FEATURED REPORT 📰

💷 Law firms are locked up

What's going on here?

UK's top law firms are now facing debts of £5.4bn because of delayed payments from clients and the costs associated with moving to new offices.

What does this mean?

This is how things work in a law firm (super simplified):

1. Client approaches the lawyer with their issues

2. Lawyer does the work

3. Lawyer issues an invoice to the client

4. Client then pays the invoice

So, you’ll see the invoice is issued after all the work has been completed.

Then there’s a gap between the lawyer issuing the invoice and the invoice being paid.

This gap is called the ‘lock-up period’.

In that period, the firm is owed that money, sure — but it’s not in their bank account.

If the lock-up period becomes too big, law firms might not be able to fund their expansion plans (e.g. opening a new office).

Or, even worse, they might struggle to meet their costs (e.g. rent, salaries, insurance). That’s when it becomes a big problem.

How long is the typical lock-up period?

Imagine you’re a lawyer, and you’ve finished a piece of work for your client — they’re happy.

You send them an invoice (for the price you had agreed).

How long do you think it'll typically take to get paid?

The answer is:

… over four months.

Research by Lubbock Fine, a chartered accountants firm, shows the average lock-up time for the top 100 law firms in the UK is 124 days.

Also, some practice areas, such as litigation, probate and property, are known to have even longer lock-up periods.

Why is this happening?

📉 Economic climate: As we’re in a tougher economic environment now (interest rates are up, energy costs are expensive etc.) clients are trying to manage their own cashflow by paying invoices more slowly.

🏢 Office moves: A lot of firms are moving to smaller office premises because of hybrid working. It’s not uncommon that there’s an overlap period when they’re paying rent on their old office as well as their new office. That puts more strain on their cashflow and intensifies their need to collect the money they’re owed.

🤝 Maintaining relationships: Remember when you lent your friend a fiver, but eventually so much time passed that you felt weird about asking for it back? Well that’s a problem for law firms too. Lawyers can be shy about chasing invoices that are due as they don’t want to damage their relationships with clients.

Why should law firms care?

Increased debt means increased financial risk.

The longer it takes to get paid, the more firms need to borrow, increasing their debt.

The total debt of UK’s top 50 law firms is £5.4bn, up by £177m from last year.

And as interest rates are at historic highs, it’s an expensive time to be a borrower.

TOGETHER WITH INTERNATIONAL INTRIGUE* 🤝

Commercial awareness isn’t just limited to the UK

How can you keep up with the stuff happening all over the world… all the time?

Well, International Intrigue can help you stay on top of the world from inside your inbox.

The 5-minute newsletter gives apolitical, jargon-free news and analysis from around the world.

Interested?

* This is sponsored content

A BIT OF FUN 😄

Actual footage of the SQE marking process

IN OTHER NEWS 🗞

• 📈 Sidley Austin's UK revenue surpassed $200m in 2023, capturing nearly 15% of its global turnover of $3.1bn. The boost was fuelled by high-profile sports deals, including the acquisitions of Chelsea and West Bromwich Albion Football Clubs. Alongside these gains, the firm's London office, now its largest outside the US, brought in several top-tier partners, with their own book of business.

• 🇮🇹 Fieldfisher is launching a new office in Italy. The new office is in the heart of Milan, adjacent to the iconic Duomo. The firm aims to cement its presence in Italy, strengthening its European platform. It has also recently extended its reach into markets like Austria and Germany, solidifying its international footprint.

• 📈 The UK economy just about grew in February, marking two consecutive months of growth. This slight uptick of 0.1%, along with January's growth of 0.3%, pulls the UK further away from a recession. Economically, this is a big deal, as continuous growth avoids the recession label, which requires two consecutive quarters of shrinkage. Inflation has fallen sharply from its peaks, and the Bank of England is expected to start cutting interest rates later this year, both of which will be good news for consumers and businesses.

• 🛩️ Wizz Air wants to power its planes with human waste. This innovative step, taken with UK startup Firefly, aims to produce jet fuel that's "chemically indistinguishable" from traditional options but cuts carbon emissions by about 70%. Firefly, a Bristol-based company, says it has developed a process to convert treated sewage into sustainable aviation fuel. This partnership will help airlines align with the EU mandates for them to incorporate at least 20% sustainable jet fuel by 2035.

AROUND THE WEB 🌐

• 🧠 Science: Science news for people who give a sh*t.*

• 👵 Fun: See if you can beat this guy’s grandma in this addictive word challenge.

• 🎛️ Music: Summer’s coming — find music festivals near you.

Credit: r/internetisbeautiful

* This is sponsored content

STUFF THAT MIGHT HELP YOU 👌

• 📹️ Free application help: If you're applying to commercial law firms, check out my YouTube channel for actionable tips and an insight into the lifestyle of a commercial lawyer in London.