Because the law is such a vast and complex subject, with broad statements of principle and fine points of detail, no individual could master it in their lifetime, let alone in school. Instead, most attorneys have very similar legal educations, and pass the same exams in order to become licensed to practice.
Rather than their time in law school, it is the experience developed during their professional practice that specializes in their chosen area of law. Many states require attorneys to engage in continuous education in order to maintain their licenses, and most lawyers use those classes to focus on the specific area of law that interests them.
For that reason, understanding different types of lawyers and their specializations can be difficult for laypeople, and it can be hard to find the right corporate lawyer for your business. What does a corporate lawyer do, after all?
What Is Corporate Law?
In order to find out what corporate lawyers do, it’s best to understand what corporate law is. Modern systems of law recognize corporations as legal persons with ensuing rights and responsibilities. Like people, corporations can engage in commerce, enter into contracts, be taxed, and sue and be sued. They are regulated by federal and state law, as well as other regulatory bodies. A corporate lawyer is an expert in the areas of law that govern corporations and in the relationships between a corporation, its officers and directors, and its shareholders.
Broadly speaking, corporate law regulates the governance, finance, and practices of corporations, as well as how its shares are traded. Federal law specifies minimum standards for corporate law, but each state has their own regulations. The state in which a business is incorporated determines the regulations the corporation must follow, regardless of the state where the company is headquartered or does business.
Corporate law is a body of rules and regulations that apply to:
- Legal entity and liability. As a body that can create and be obligated by contracts, corporate law specifies the type of entity the corporation is and its legal relationship to other entities like the officers, shareholders, and customers.
- Taxation and finance. Different types of corporations have different tax and finance regulations and obligations.
- Transferability of ownership. The ownership and transfer of shares in a corporation is a highly regulated activity.
- Governance and board structure. Corporate law also regulates how corporations must be managed.
- Other bodies of law. Corporate law intersects with the various other bodies of law that may apply to the corporation or its activities, including securities law, tax law, employment laws, environmental laws, consumer protection laws, etc.
Forming a corporation is an excellent way to limit the legal liability of owners, investors, and shareholders and often grants certain tax and other advantages to business owners. However, it also comes with a range of obligations that all founders should be aware of when starting their business.
What Types of Work Do Corporate Lawyers Handle?
Corporate lawyers help businesses remain in compliance with the applicable regulations, help assess and mitigate risk, and offer strategic guidance.
Generally speaking, corporate lawyers are not involved in litigation or disputes; instead, they help companies avoid litigation and legal disputes. Corporate lawyers are typically engaged in the following:
- Contracts. A corporate lawyer may be heavily involved in negotiating, drafting, and reviewing a wide range of contracts and legally binding agreements.
- Governance. A corporate lawyer may help draft the corporate governance framework, including articles of incorporation, bylaws, and other management policies. They may also advise corporate officers on their responsibilities and obligations toward the company.
- Representation. A corporate lawyer may represent the company during certain meetings or proceedings, help to obtain representation, or designate agents for various operations or proceedings. However, a corporate lawyer usually does not represent a company during litigation or in a courtroom setting.
- Securities. In publicly traded companies, a corporate lawyer advises on compliance with securities laws, promotes transparency with shareholders and regulators, and assists with due diligence.
- Mergers and acquisitions. During a merger or acquisition, a corporate lawyer conducts due diligence and oversees the legal processes that unite the two business entities.
- Venture capital. For startups or existing businesses seeking venture capital, a corporate lawyer helps negotiate the terms of the fundraise and draft the deal documentation.
- Legal advice and strategic guidance. While a corporate lawyer may not be an expert on all areas of law relevant to a business, they can usually be relied upon to offer general advice and opinions in a wide range of legal areas, including employment and labor law, tax law, intellectual property, dispute resolution, etc.
The Difference Between a Corporate Lawyer, a Business Lawyer, Corporate Counsel, and Legal Counsel
There are several different terms for the types of legal services a company may require.
Generally speaking, a corporate lawyer is an expert on the body of laws that pertain to corporations, with knowledge and experience of corporate structures, corporate rights and responsibilities, and the various aspects of corporate ownership and the transferability of ownership.
A business lawyer is more versed on general areas of law that pertain to business, but is typically specialized in litigation, and will represent a firm during legal disputes and in courtroom proceedings.
Corporate counsel is a term usually used for an in-house corporate aittorney who works for a single company full-time, while legal counsel is a full-time in-house attorney who specializes in some other area of law relevant to the business.
For example, a large corporation may have an attorney who acts as their corporate counsel for their ongoing needs, and also have a legal department with one or more attorneys who specialize in international trade, environmental laws, finance laws, or other complex areas of law that are specialized and relevant to their industry. A company may work with or even retain a corporate lawyer for years before they hire a staff attorney to act as their corporate counsel.
When Might an Individual or Business Need Help from a Corporate Lawyer?
An individual or company needs to consult with a corporate lawyer when:
- They choose to found a corporation. Founders and business owners should always consult with a corporate lawyer prior to incorporating to receive legal advice related to business type and formation and to anticipate future risks and opportunities.
- The company conducts business internationally. Working across borders brings new legal regulations and considerations that officers should be aware of.
- The company needs to create or negotiate complex contracts. Many companies can get by with standard contracts, but when the contracts are especially complex or mission-critical, or the negotiation process becomes difficult, they should engage a corporate lawyer.
- The company seeks to attract investors or partners. Legal advice and strategic guidance are necessary during the process of attracting capital and investment.
- The company is going public. Likewise, legal guidance is always necessary as part of the preparation for going public.
- The company is engaged in a merger or acquisition. No company should engage in a merger or acquisition without the services of a corporate lawyer.
- The company is engaged in a dispute regarding contracts or corporate processes. When corporate contracts or company processes are the cause of a dispute or potential legal proceeding, consult with a corporate attorney.
There are several different ways a company can partner with a corporate lawyer:
Different Ways of Working with a Corporate Lawyer
If your growing business needs legal advice but cannot afford the salary for full-time corporate counsel, there are several possible alternative arrangements. Here are some options for different legal needs over the life cycle of a company:
- Pay for consultations and specific legal services. In the beginning, many businesses work with a corporate lawyer during the process of business formation and incorporating. Many lawyers offer free or discounted consultation services, and may offer specific services (like initial business formation or trademark registration) for a set fee or hourly rate.
- Hire a lawyer on retainer. Generally speaking, a retainer is a fee paid in advance for ongoing access to an attorney. This is a great option if you have found a corporate attorney that you like and is a good fit for you. It gives you the option to occasionally ask legal questions, have them look over a contract or agreement, or respond quickly to an unexpected need or concern.
- Negotiate a rate for outsourced or fractional counsel. In this arrangement, you hire a lawyer for ongoing representation, but not full time, and they also work for other clients. This can be a great way to have legal services from your own attorney without paying a full-time salary, and they can provide legal services, appear at board meetings, and offer strategic guidance like an in-house counsel would.
- Hire in-house counsel. At a certain point, it becomes necessary or more cost-effective to simply hire a full time corporate lawyer to work for your business. It may be possible to negotiate an agreement that offers shares or partial ownership in lieu of salary, depending on the nature of your business and the agreement with your attorney.
Even small corporations can benefit from the help of corporate lawyers. The complexity of the legal rights and responsibilities of a corporation, along with the legal relationships between the company, its officers, its shareholders, and its investors makes it necessary to work with a corporate attorney that understands the law and understands your business.
For more information about how corporate law services from the Fridman Law Firm can help you, contact us online or call 212-262-9823 today.