Life of a finance trainee at Mayer Brown: commercial awareness in practice

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This article has been produced in collaboration with Mayer Brown International LLP.

In this LCN Says, we speak to Zhi Yung Foo from Mayer Brown International LLP about life as a trainee working in finance. Read this article to find out how he builds commercial awareness, and how understanding client objectives, market trends and global factors shapes the deals he works on.

What does ‘commercial awareness’ mean to you as a finance trainee and how do you apply it in your work?

Commercial awareness allows me to join the dots between what's in the legal documents and what's actually driving the deal in the real world. You can’t just consider what a clause means in the transactional documents, you also need to think about the impact on clients. 

Commercial awareness is about considering what the lender is trying to protect, or the business or market context that's shaping everyone's position.

In a finance transaction, you need to understand several factors (among others), including:

• the negotiating power between the borrower and the lender;
• how lenders price the risk;
• what the management/sponsor care about (in a leveraged finance deal); and
• how the deal structure achieves your client's aims. 

My day-to-day work doesn't naturally correlate with the external macro environment. This is because, as a trainee, your work involves lots of drafting ancillary documents and looking at the conditions precedent lists.

However, staying commercially aware helps me to understand the bigger picture of the deal. It’s good to understand the documents the senior lawyers will be drafting, the negotiation dynamics and the work being done elsewhere in the team.

For more on building commercial awareness, check out LawCareers.Net’s Commercial awareness hub, sponsored by Mayer Brown.

How do you keep up with market trends that affect finance transactions?

As you transition from applicant to trainee, the basics of commercial awareness stay the same. The main difference is the support I now get from the firm to develop my expertise. However, I still use similar methods to those I used when I was a student applying to training contracts. For example, I read the Financial Times to keep up with topics relevant to my practice area.

I also listen to podcasts and subscribe to newsletters to stay informed. I’d recommend newsletters like Non-Billable and LawCareers.Net’s LCN Weekly newsletter. In terms of podcasts, I find Wake Up to Money really useful. The podcast includes many different points of view from various guests. For example, you might hear from a lawyer, a politician, the managing director of a bank, or a director from a small or medium-sized business. Gaining insights from different sources makes the discussions richer and more interesting.

Check out this LCN Says for podcasts to listen to and influencers to follow to help boost your commercial awareness.

How does Mayer Brown support trainees in understanding the business drivers behind deals?

Mayer Brown offers great support through both ad hoc discussions with seniors and structured support from the knowledge team. On transactions, associates are good at making time to explain the ‘why’ behind trainees’ work. For example, if they’re negotiating clauses in the senior finance documents, and you take the initiative to ask why certain clauses are drafted the way they are, they’ll take the time to explain it. Even when we're working on typical trainee tasks, like looking at conditions precedent, they’ll explain the rationale behind why certain conditions precedent are required.

The other big support is the breadth of the finance practice. Mayer Brown works across leveraged finance, real estate finance, structured finance, project finance, asset-based lending and more. The knowledge team is good at maintaining databases of information and recommending great newsletters or outside resources. More broadly, the knowledge team helps trainees to understand market trends. For example, they recommended the Loan Markets Association (LMA) website, which I use to find articles about market trends. The knowledge team also circulates regular know-how updates, latest editions of key banking and finance journals, and department-wide updates on black letter law.

Can you share an example of how understanding a client’s business objectives influenced the advice your team gave?

There was an instance where we were acting for the facility agent on a syndicated facility. This means that the agent bank coordinates communications and the process for the syndicate under the facility agreement. The team at Mayer Brown was managing the process for handling lenders’ comments on the facility agreement. We consolidated those comments and gave them to the borrower. The borrower had strong negotiating power and all the lenders were keen to participate in this facility.

Early on, the borrower's team were clear that they wanted speed, consistency and for the facility agreement to be based closely on a precedent from a recent deal that they had completed. Mayer Brown represented the agent lender on both deals, which meant we were familiar with the facility agreement terms. In the interests of efficiency, and because of the negotiating power the borrower had, we let the other lenders we were coordinating know this. This meant that, rather than using a new LMA-style precedent, we started off using the precedent deal from the get-go.

This also meant that we had a lot of comments from other lenders. There were a few areas where the lenders wanted tighter protections. However, we had to persuade the other lenders that this was a deal breaker, or an area that the borrower wouldn't budge on, which we knew because we'd recently completed a similar deal with them. Knowing what the borrower cared about helped to shape that negotiation, which meant that we spent less time on deal breakers that would’ve prolonged the whole process. Instead, we focused on elements we knew that the lender might be able to accept. The advice became more disciplined and focused on how we could manage that dynamic so that our client could close the deal more quickly.

How do global economic factors impact the work you do?

Global economic factors don't necessarily impact the day-to-day work of a trainee, because our work isn’t really tied to negotiations. However, it does affect us in terms of deal volume, deal flow and urgency. For example, when inflation eases and interest rates fall, borrowing becomes cheaper and more predictable, so you often see more appetite for financing. Conversely, when inflation is sticky and rates are rising, lenders get more cautious and deal volume drops. That said, it’s all context dependent. High rates can slow activity, but where there’s a clear commercial imperative, clients may still want to get the deal done.

Those macro conditions also interact with domestic regulatory uncertainty, which affects timing. For example, we saw this around the UK autumn budget 2024. There was a lot of tension in the sponsor market around potential reforms to the tax treatment of carried interest. Mayer Brown saw sponsor clients that wanted to get deals done before the budget was announced. This was because they weren't sure how budget reform would affect them. It definitely impacted the volume and urgency during that quarter. In terms of how that feeds into my work, when deal flow increases, my day-to-day workload might increase. Understanding that really helps to reframe what I do and why certain periods are busy.  

To explore life at Mayer Brown further, read this LCN Says from an intellectual property trainee. Plus, for more insight into the firm, take a look at its Meet the Lawyer profile, and if you’re looking for some advice on crafting applications, check out this Meet the Recruiter profile.