One of the essential distinctions in law practice is between court action and corporate or transactional law. Almost any attorney will make this distinction in law school or at the beginning of their career.
If you watch many tv-shows, you may assume lawyers negotiate deals one day and perhaps go to court the next for high-profile litigation. This is highly unusual in legal practice. Litigators and lawyers each deal with corporations, but in distinct manners.
The difference between corporate law and commercial litigation is concise. Corporate lawyers create transactions or deals, and lawyers intervene when those transactions fail. So, what exactly are corporate lawyers?
Corporate lawyers essentially advise companies on their legal responsibilities, rights, and duties. They are typically corporate generalists or lawyers who counsel businesses on their legal obligations, rights, and responsibilities, as well as provide guidance on company structures and evaluate legal endeavors. To meet their clients' refined requirements, corporate lawyers collaborate with other transactional attorneys in areas such as tax, ERISA, and real estate.
When defining practice areas, many companies use the phrases "transactional" and "corporate" synonymously. Corporate lawyers structure transactions, draft files, create deals, attend meetings, and make phone calls to accomplish these goals. A corporate lawyer strives to ensure the terms of agreements are transparent and straightforward, so it will not cause possible issues for their client.
Corporate lawyers also advise corporate officers, directors, and insiders on their responsibilities and obligations. Not all businesses classify the various types of corporate practice similarly. Some companies, for instance, may have distinct practice communities for antitrust or mergers and acquisitions. In contrast, others may incorporate them into their corporate department.
A corporate lawyer can assist a client in forming, organizing, or dissolving a business entity. Attorneys outline documents of incorporation, which document the company's creation and stipulate the leadership of internal affairs, to form a corporation.
Agreements, limited liability businesses, limited liability partnerships, and business trusts are also dealt with by corporate lawyers. Attorneys assist their clients in determining which legal forms are best suited for the type of business they want to operate, and the connections the leaders want to establish with one another.
Corporate lawyers may research employment law or environmental law, or communicate with another attorney specializing in those areas. Corporate attorneys also advise business executives on the obligations and rights of corporate directors.
Mergers and acquisitions are a large corporate practice area (M&A). A company may add a property, production facilities, or a trademark by acquiring or merging with another corporation. A merger or acquisition may also be used to eliminate a rival in the same industry.
M&A attorneys advise clients on proposed purchases. Mergers and acquisitions lawyers discuss options with their clients on these issues, and the attorney and client work together to establish who should accept current or forthcoming liabilities.
A corporate attorney team typically evaluates a company's critical assets and liabilities, such as income statements, work contracts, real estate holdings, intellectual property holdings, and any existing, awaiting, or likely litigation, to analyze a proposed venture. After that, lawyer(s) can assess the situation and discuss particular concerns with the client. This is known as due diligence.
As in any corporate law role relating to emerging companies, lawyers in venture capital assist in developing and expanding businesses. This means they assist new companies in raising money, organizing their operations, and maintaining their legal and business structures after formation.
A lawyer in a venture capital practice works on personal and public sources of funds as well as daily counseling services. Overall company work, such as drafting articles of incorporation and other papers, as well as technology licensing, financing, and mergers and acquisitions, may fall under their purview.
Some corporate attorneys focus on securities law. On a federal level, when it comes to the Securities Act of 1933, the act necessitates firms that sell securities to the general public to sign up with the federal government.
If a company's stock is traded on a public stock exchange, the company must file a detailed report with the Securities and Exchange Commission, and distribute portions of those documents to shareholders. Based on the size of the company and the kind of investor, corporations must follow specific protocols for revealing information to shareholders and potential investors.
Corporate lawyers write reports for initial public offerings, annual and quarterly disclosures, and special filings if anything happens that could impact the value of the stock. This includes factors such as impending litigation, government investigation, or underwhelming net profits. Even if they do not focus on corporate securities law, the issuance of stock and the creation and dissemination of statistics are subject to a slew of rules corporate lawyers must understand.