The Law: Corporate
15 March 2007
11 December 2013
6 January 2014
20 May 2014
2 July 2014
13 November 2013
Almost every merger or takeover featured in the business pages of daily newspapers will have corporate lawyers working on it. So if you are an adrenaline junky who would relish the opportunity to be at the heart of high-profile, multimillion-pound deals, then a legal career in corporate finance may be right up your street.
Whats it all about?
Corporate lawyers advise their clients on a broad range of matters, including mergers and acquisitions (M&A) and takeovers, as well as on methods for raising additional cash, such as flotation on a stock exchange. The length of a transaction will vary depending on the type and size of the deal. Some deals are completed in less than a week, while others may take several months.
As a corporate lawyer you have to be commercially minded as well as having a good understanding of the law. This means that getting to know clients businesses and industry sectors. A corporate lawyers client base is very varied and typically includes entrepreneurs, small, privately owned businesses and large multinational corporations such as pharmaceutical giant GlaxoSmithKline or energy powerhouse BP.
Most corporate lawyers also act for a range of financial institutions, including high street and investment banks such as Goldman Sachs and Credit Suisse.
The size of transactions on which corporate lawyers will work varies depending on the size of the law firm they work for. For instance, a lawyer working for a top 20 City firm will typically handle deals worth millions, or even billions, of pounds. Magic circle firms Freshfields Bruckhaus Deringer and Linklaters sat on the opposite sides of the negotiating table on Dubai-based DP Worlds 3bn takeover of ports operator P&O. M&A heavyweight Slaughter and May was also involved in the deal, advising Singapores PSA, which made an unsuccessful counter-bid for P&O.
In contrast, a lawyer employed by a law firm in the regions. The nature of deals handled by corporate lawyers may be affected by the state of the worlds major economies. For instance, there have been a number of companies, notably those in the online gaming and mining sectors, floating on the London Stock Exchange (LSE) because of increased confidence in the performance of the FTSE100 (the index of the UKs top 100 share prices). The M&A market has also picked up significantly in the past 12 months, which has given corporate departments around the country a much-needed boost.
The private equity market has also remained buoyant. A private equity buyout is the acquisition of an established target company or business. The deal is driven by private equity investors such as CVC Capital Partners and Apax Partners. The companys management is offered a small percentage interest in the company as an incentive to drive the business forward. Private equity investors choose companies with the potential for growth, an increase in value and with a strong cashflow. They use the cash generated by the business to pay back the debt borrowed to finance the purchase. Their aim is to sell the company, or to list it on a stock exchange, within three to five years.
The working culture
The pace in a corporate department can be very fast at times and it is not unusual for lawyers to work long hours, sometimes throughout the night. Although there is great pressure at times, most people manage to retain their sense of humour. With this hard work comes a great team spirit and a real feeling of satisfaction when a deadline is finally met; and there is also the party to celebrate the successful completion of the deal to look forward to. Of course, there are invariably quieter periods to allow you to recover from the busy times.
A corporate lawyers day-to-day responsibilities will differ, depending on how many years they have been in practice. Senior corporate lawyers will act as a transaction manager and liaise with the clients other advisers, including investment banks and accountants. They will also be the clients principal point of contact and will advise companies on strategic matters so that they can achieve their corporate goals. Senior corporate lawyers will also attend high-level meetings and lead negotiations. The complex nature of transactions means that junior lawyers are often handed less responsibility than their counterparts in other departments.
A junior corporate lawyers work is extremely varied and can include such tasks as carrying out research, drafting agreements, sitting in on client meetings and conducting due diligence (reviewing a companys contracts with lenders, suppliers etc). The downside is that deals are usually very document-heavy, meaning trainees in corporate departments can sometimes get handed the photocopying and proof-reading duties. Trainees and junior lawyers in corporate departments also tend to work longer hours than their colleagues in other departments.
Why is this interesting?
Being at the hub of a large transaction is fascinating, as you will be involved in the deal from start to finish. It is also rewarding to read about the deal you were working on in the national press.
Personal and legal skills required
Corporate lawyers must have a good knowledge of the law and relevant regulations and should be commercially aware. They also need to be effective team players, because the sheer size of many deals means there will usually be a large number of lawyers from different departments all handling different aspects of the transaction. They also need to be organised and able to meet tight deadlines. With the long hours culture being prevalent, a good sense of humour is vital to help you get through these busy and stressful periods.