Students unfamiliar with transactional practice are often surprised to learn of the variety and complexity of practice opportunities for transactional lawyers. The Business Law and Policy Specialization offers an impressive range of doctrinal and clinical courses, which provide students with a broad exposure to the transactional practice.
CORPORATE LAW | COMMERCIAL LAW | REAL ESTATE FINANCE| BANKING LAW | BANKRUPTCY LAW | TAX LAW | INTERNATIONAL BUSINESS LAW
Corporate Law — In common parlance, the term "corporate lawyer" is often used as a synonym for "business lawyer." In its broadest sense, corporate legal practice thus varies substantially. Most corporate lawyers focus on transactional work and spend little time in the courtroom (or the library). Still others practice law in-house at corporations and financial institutions where they do both transactional work and advise fellow employees on the many legal questions that corporations face.
Corporate lawyers commonly advise a diverse set of clients, including closely-held, publicly-traded and even multinational companies. Many corporate lawyers also represent financial institutions, such as banks, investment banks, and institutional investors, such as insurance companies, pension funds, mutual funds, private equity funds and hedge funds. The issues a corporate lawyer might work on include, among other things, capital formation and securities issuances, mergers, acquisitions and divestitures, leveraged buy-outs, joint ventures, business restructurings, licensing and intellectual property rights and commercial contracts, as well as related regulatory matters. A lawyer specializing in the securities regulation aspects of corporate law could expect to work on both public and private offerings of debt, equity and hybrid securities. Such transactions include public offerings, shelf registrations (including universal shelf registrations), medium-term note programs, Eurodollar and global securities offerings, private placements and Regulation S and Rule 144A offerings. Corporate lawyers specializing in mergers and acquisitions would work on transactions like exchange offers, tender offers, going private transactions, negotiated debt restructurings and spin offs.
Today's corporate practice emphasizes creative and practical solutions to the issues and problems that arise in today's complex and competitive financing and business environment. Corporate lawyers must be responsive, efficient, and sensitive to the needs of the client.
The globalization of the capital markets requires an increasing degree of international expertise on the part of corporate lawyers. Understanding international capital markets enhances your ability to advise clients and meet the demands of the U.S. capital markets.
The expansion of the regulatory state similarly requires corporate lawyers to develop expertise in a wide variety of domestic legal issues. In structuring and implementing transactions or providing advice on continuing business and commercial matters, corporate lawyers must routinely coordinate with specialists in other practice areas, such as tax, employee benefits, antitrust law and environmental law.
At this stage of your career, you may know that you want to practice corporate law but still not know whether you will (or even if you would like to) do mega-deals for large corporate clients or advise small closely-held companies. Students contemplating a Wall Street-style practice (whether in Los Angeles, New York or elsewhere) need more exposure to corporate finance, securities law and international issues than do those who anticipate becoming corporate generalists dealing with the daily issues that arise in the operations of a corporation, such as employment disputes and routine business negotiations.
Commercial Law — The commercial lawyer engages in a transactional practice, heavily centered on documentation and negotiation. The commercial lawyer represents borrowers and lenders in all forms of financial transactions ranging from project finance to securitization, flooring agreements, ordinary revolving credit, receivables and inventory financing and letters of credit. Although in-house general counsel and chief financial officers are often involved on the borrowers' side, borrowers routinely use outside counsel to negotiate and document major financings. Frequently, a lender will use outside counsel to provide basic legal representation in lending transactions. Typically, the lender and borrower will frame the terms of the financing in a term sheet, and the lender's counsel will prepare documentation for the borrower to review and execute. Borrower's counsel typically plays a major role in the review and negotiation of the loan documentation and is often expected to prepare a legal opinion assuring the lender regarding various legal aspects of the transaction. Lender's counsel must keep abreast of a whole variety of commercial laws to make sure that the loan will not expose the lender to legal risks for improper disclosure, usurious interest rates or failure to perfect liens and security interests covering collateral. If the loan is secured, additional documents must be prepared and negotiated. Borrowers often bargain over the scope of collateral and guarantees, and the business terms are always negotiated with respect to interest rates, term, advance rates, covenants, financial and performance ratios and the like.
Real Estate Finance — The real estate finance lawyer specializes in development construction and project financing involving real property, fixtures or mixed collateral. In essence, the real estate finance lawyer practices commercial law to facilitate purchase, sale, development, improvement or refinancing of real property projects. The lawyer must become familiar not only with the substantive law of mortgages, deeds of trust, servitudes, fixtures, water and mineral rights and the like, but also must become attuned to the political process to obtain approval of permits, zoning, variances, environmental impact statements, toxic waste testing and the like. The lender's lawyer must prepare necessary documentation and anticipate remedies in the event of default. Counsel for the borrower, developer, buyer or seller must negotiate the business and legal terms. Some projects, such as a marina development, involve numerous third parties with specialized interests. Sometimes the escrow agent will require counsel to prepare and negotiate an escrow and indemnity agreement. If construction is involved, the surety on a bonded project will require counsel to protect its interests.
Banking Law — The banking lawyer represents banks in financing all kinds of commercial transactions. In addition to preparing and negotiating the loan and security documents, the bank's counsel also must be aware of bank regulatory and accounting issues. The banking lawyer should counsel the client to limit the prospect of lender liability, waiver or estoppel and sometimes will suggest the organization of bank procedures and files to minimize exposure. Of course, the banking lawyer will prepare numerous documents to give notice of and enforce defaults. The banking lawyer should pay particular attention to the grant and perfection of security interests. Other important issues involve domestic or international syndication or participation in bank loans where other financial institutions participate to diversify the bank's risk.
Bankruptcy Law — The bankruptcy lawyer sometimes serves as a lawyer's lawyer, advising business lawyers about the insolvency or bankruptcy aspects of a proposed transaction. More frequently, however, the bankruptcy lawyer enters the scene when the lender or borrower senses a problem in the lending relationship caused by cash flow or insolvency problems. Bankruptcy lawyers may be called on to renegotiate lending agreements out of court. It is not unusual for the borrower's bankruptcy counsel to use the threat of a bankruptcy filing as leverage to renegotiate the legal terms of a lending agreement that were "non-negotiable" when the loan was made originally. If the borrower files a bankruptcy petition, bankruptcy lawyers for both the borrower and lender face immediate negotiation or litigation over use of collateral to maintain operation of the business. Debtor-in-possession financing must be obtained, negotiated and presented for court approval. Ultimately, if losses are stemmed, the borrower's and lender's counsel negotiate a plan of reorganization. Other creditor, employee, governmental and shareholder interests may participate in the process with their own bankruptcy counsel. The process is dynamic and multilateral with shifting alliances. Often, time is of the essence.
Tax Law — All economic transactions and many personal decisions have important tax implications. Often, the tax issues arising from commercial and personal decisions are sufficiently complex to require the involvement of attorneys specializing in taxation. The specific role of the tax lawyer varies greatly depending on the context.
Within the context of law firm work, tax lawyers typically divide legal work into two categories: controversy work and transactional work. Tax controversy work involves assisting clients in the defense of tax returns being challenged by state or federal tax authorities. While tax controversy work is initiated at an administrative level, it is not uncommon for specific issues to result in litigation in state or federal court. Transactional practice is quite different from controversy work and is extremely varied. This is the planning side of tax practice. It involves things such as the structuring of mergers and acquisitions, determining how a startup business should be structured (e.g., choice-of-entity issues, how to compensate key employees) or planning to establish a foreign subsidiary of a domestic corporation.
Not all tax lawyers work in law firms. The most obvious alternative opportunity for specialists in tax law is to work for the state or federal government. Tax lawyers occupy important legal and policy positions at the IRS, at the U.S. Treasury Department and on Capitol Hill. Tax lawyers occupy similar positions at the state level. Other options for specialists in tax law include the large international consulting and accounting firms. These firms are hiring students from law schools at an increasing rate.
Because of the extraordinary complexity and ever-changing nature of tax laws, all tax attorneys must have a strong grounding in the history, policy, politics and operation of state, federal and foreign tax laws. This educational background not only prepares students to practice tax law but also can serve as the basis for a career in other areas of law as well. It is not unusual for attorneys trained as tax lawyers to later become real estate lawyers, counsel to venture capital startups or general corporate practitioners.
International Business Law — Some students may plan to pursue a career as an international business lawyer. This may include the international public law context in which business is transacted, law relating to trade in goods, technology transfer, foreign direct investment, private international dispute settlement and taxation of international transactions. In addition, the great breadth of courses offered allows students — if they wish — to focus on the law of Asia, Europe or Islamic countries, or on a mix of regions or international topics.