Corporate Law: The Synergy of Law and Finance

For many students in college, picking a profession can be a long and difficult decision. Many students want to be involved in the business world in some way, but at the same time have a desire to be engaged in other activities, rather than just dealing with numbers and dollar figures. For those that have an interest in going into a field that has a nice balance between the business world and the law world, corporate law is the perfect synergy of the two. Whether negotiating the acquisition of a multi-billion dollar company or assisting a small Internet start-up company, corporate lawyers are involved in advising businesses on their numerous legal rights, responsibilities, and obligations. A good corporate lawyer is one of the most valuable employees that a major financial institution such as an investment bank or a private equity firm can have. Therefore, one of the most exciting and stimulating professions in the business world is corporate law.    

Corporate lawyers are engaged in a wide array of activities. The role of a corporate lawyer is to ensure the legality of commercial transactions, advising corporations on their legal rights and duties, which includes the duties and responsibilities of corporate officers. In order to do this, they must have a detailed knowledge of the aspects of contract law, tax law, accounting, bankruptcy, accounting, securities law, and intellectual property rights, and the laws specific to the business of the corporations that they work for. Many corporate lawyers work in law firms, particularly large or midsize firms, where they counsel clients or handle business transactions. Some of their activities include negotiations, drafting, and review of contracts and other agreements associated with the activities of the business, such as mergers, acquisitions, and divestitures. They also advise business clients on corporate governance and operations issues such as the rights and responsibilities of corporate directors and officers, and the general oversight of the legal activities of the company. In addition, corporate attorneys assist business clients with the financial information they must provide to their owners, employees, and shareholders, including reports that must be filed with the Securities and Exchange Commission (SEC) (SEC) and other government agencies. Many corporate lawyers choose to forgo working in a large law office and choose to serve as an in-house counsel for a specific firm, such as a hedge fund. These lawyers often work very intimately with their co-workers and help shape the decisions the firms make. They also act as advisors on a myriad of other issues such as labor and employment issues, contractual difficulties and ethics violations.

Corporate lawyers work for both public and private companies, helping them formulate contracts, and avoid falling into legal pitfalls. They advise publicly held companies with regards to issues such as the public disclosure of disappointing financial results, an adverse judgment in a litigation matter, or the initiation of a government investigation regarding the company. The company may, for example, need to advise the public about an impending product recall, litigation that has been initiated due to an environmental problem, or an unfunded pension liability. A private company, however, may need a corporate lawyer for an entirely different set of needs. They may need help establishing a line of credit with a bank, creating the proper loan documents and helping guide the company in its quest to raise more funds. Privately held companies also seek advice on the formulation and enforcement of contracts, on tax matters, and even on succession issues, in which attorneys help plan for the orderly transfer of ownership or management to the next generation of owners. Most significantly, when a company decides to go public, the corporate lawyer is very involved in the process. Corporate lawyers work very closely with the investment banks in helping them prepare their clients for the Initial Public Offering (IPO). They help draw up the paperwork and negotiate and help decide exactly how many shares their client is going to offer to the public to invest in.  

In addition to going to law school, corporate lawyers often spend an extra year in school in order to receive a J.D./M.B.A., which is a law degree combined with a Master of Business Administration. Since the activities of corporate law are so heavily intertwined with the businesses of their companies, it is expected that they possess an intimate knowledge of how finance operates and the mechanisms of the business world. According to Forbes, corporate law is the highest paid field within law. Average salaries for first-year associates range from $160,000 to $180,000. Since the salaries are so attractive, corporate law often attracts the top students from the most prestigious law schools. Many law students who decide to go into corporate law are the ones who have been interested in business for a long time. While the percentage of law school students who majored in finance or economics is about 7%, the percentage of corporate lawyers who majored in one of these two fields is around 40%. Many corporate lawyers love being able to be a part of Wall Street, while still remaining on the law side.

A recent study done by Harvard University revealed that corporate lawyers tend to be much more content and fulfilled by their jobs than attorneys who specialize in other fields. One of the reasons cited by the study is the lack of confrontation that is found within the job. The practice of corporate law is less adversarial than that of trial law. Lawyers for both sides of a commercial transaction aren’t deemed to be opponents, but rather facilitators. Transactions take place amongst peers. There are rarely wronged parties, underdogs, or inequities in the financial means of the participants. Many trial, litigation and family attorneys describe how the constant fighting leads to many of them to become despondent. They describe how much of the passion for law that they had when they first began their jobs has significantly waned. On the contrary, many corporate lawyers note that there is a much more positive feeling within their workplaces than many other law offices. As noted, a career in corporate law can be an extremely rewarding job, in both monetary compensation and job satisfaction. Those that have an interest in making a nice salary while still having a career that is intellectually stimulating should seriously consider a career in corporate law.