Banking & Finance Law
“Money makes the world go around” is a popular adage and nowhere is it truer than practising law in the banking & finance domain. From providing a loan to an individual to complex financial deals for big companies, this area of practice covers it all.
This is an area where some amount of specialization is a must; there are too many components for a solicitor to be a general practitioner. Banking & Finance has contentious and non-contentious elements and can be broadly classified into sub-areas dealing with asset finance, acquisition finance, project finance, corporate finance, Islamic finance, etc. As a solicitor in this field you will represent either the borrower or the lender and it is your job to ensure the correct documentation is completed and your clients’ interests are fully covered and protected.
Banking & Finance is a global behemoth; its tentacles are spread over multiple jurisdictions and with frequent offerings of new products this is an area which can only get bigger. As a Banking & Finance lawyer, you can look forward to long working hours, tons of paperwork, familiarity with the law in multiple jurisdictions and lots of travel.
What is involved in Banking & Finance Law?
A major portion of work in Banking & Finance is of a transactional nature; you will complete your part in the transaction and move on to the next. A return to a completed transaction becomes necessary when disputes arise, constituting the contentious element of a Banking & Finance lawyer’s work. As a lawyer in this field, you can choose to specialize in a particular class of financing. These include project, acquisition, asset, property and islamic finance as well as securitisation, derivatives and capital markets.
Project finance normally involves making loans for various projects, while acquisition finance focuses on the lending on money to companies to purchase other entities. Asset finance, likewise, focuses on loans, however it is regarding the purchase or leasing of big-ticket items instead. There is straight-forward lending by a bank or other financial institution, and then there is Securitisation, when a lender offloads its loan portfolio to another company. Derivatives focus on the fixing of currency rates during a transaction and capital markets is where a borrowing entity issues bonds to investors. Another huge area, islamic finance, involves transactions or loans that comply with Shariah principles.
Across all modes and segments of finance, a lawyer will be required to assist with negotiations, provide assistance in structuring deals and complete due diligence on other parties, usually the borrowing entity. You will also act as a mediator between parties, helping all to reach common terms that are satisfactory to all involved. Throughout all of this, you will have to ensure that the deal is in line with all laws and regulations of the particular jurisdictions they involve, as well as completing formalities such as registration.
What is need for Banking & Finance Law?
Qualifications necessary to be a Banking & Finance lawyer are: an outstanding academic background, high knowledge levels in your specialist area, keen commercial awareness and an understanding of market realities.
You will have to analyze and predict future trends which may likely impact the transaction or deal and communicate this is a clear and concise way to your clients.
As such, paying attention to every detail and having an exact knowledge of the fine-print is essential.
A familiarity with legislation and regulatory mechanisms in countries where you clients have or are likely to have business interests and being able to reduce complex definitions and terminology into simple language clients can understand is invaluable. As with most high-level jobs, the ability to produce high-quality work consistently regardless of time constraints or deadlines is standard.
Current climate in Banking & Finance Law?
The US sub-prime market crisis has affected economies worldwide. Lending has been drastically reduced and a credit crunch has limited potential growth across most sectors. With too many players in the field, competition in the Banking & Finance legal services domain is extremely fierce.
Recent trends in the market include growth of investment funds taking on lending roles replacing banks as traditional lenders. Competition among financial institutions to grow their businesses have meant that borrowers have had plenty of options available for securing loans, though this has slowed down considerably with the credit crunch.
Banking & Finance litigation is also on the rise with insolvency cases increasing; money-laundering has become a major regulatory focus area and enforcement in general has picked up momentum in most economies.
A day in the Life of... a trainee in the Banking & Capital Markets dept at Berwin Leighton Paisner
Typically, I arrive in the office between 8.00 a.m. and 8.30. a.m. The journey on the Northern Line is actually bearable at this time and getting in early means I can have a coffee and read up on the latest headlines/football transfers e.t.c. I check my emails to make sure there is nothing urgent to be dealt with that morning.
Departmental or trainee training sessions take place roughly once a fortnight. These begin at 9.30 a.m. and last for an hour. They are held as relaxed talk shops with presentations from partners or senior associates. If I am on a large transaction there will be email correspondence to catch up with. I will read this and make sure that I am aware of the stage at which the deal is at and also whether there is anything I need to action.
I will have a list of things to do on the transaction and when each task is due. I will spend the morning amending the documents I am responsible for following comments overnight from the other side’s lawyers and checking with the associate the further tasks which now need to be completed.
Lunch is spent either in the canteen, in a local café or over the bridge at Borough Market - a Friday lunchtime tradition for a great sandwich which you can never finish! A typical day can change significantly depending on how many transactions I am assisting on and at what stage each transaction is at. I will work on two to three deals, assisting two associates (one junior, one senior) and a partner.
If a deal gets busy I can end up doing all my work on that deal. I will work mainly for and under the supervision of the senior associate. They will check more complicated work such as drafting documents and discuss how to take a matter forward, but generally I am free to telephone/email clients and other lawyers and deal with matters independently as they arise.
In the Banking and Capital Markets department I can be involved in a wide variety of transactions. These include original securitisation transactions, management of securitisation transactions including Noteholder meetings, leveraged finance transactions representing both large commercial bank lenders and key corporate client borrowers and general banking transactions such as amendments to current facilities. Each member of the department is keen to get you involved in their deal and there is an emphasis on each trainee gaining a varied experience of the department and the matters it deals with.
Trainee involvement with other areas of the firm is also encouraged. We regularly assist the graduate recruitment team with presentations to universities or the current intake of LPC+ students. I also organise the firm’s football team, so will spend time on the telephone and emailing associates and partners within the firm to organise client football fixtures.
It’s a great way of getting to know people throughout the firm but also a way of building up contacts and friends at other firms and within organisations. We receive a budget from the firm which pays for a weekly booking and some beers after the game. The firm also subsidises a yearly football tour to play against clients or our overseas offices and preferred firms. Last year’s tour was an unforgettable four days in Barcelona (sadly the results were forgettable!) and a trip to Moscow to play our new office is in the pipeline.
Coffee while checking emails and post followed by recent news on the internet. Go through to-do list and prioritise tasks/plan day
Preparation for 10.00 a.m. meeting.
Meeting in client suite - Chairman at Noteholder meeting.
De-brief to associate on Noteholder meeting. Emails and telephone calls to clients/other side to discuss adjourned meeting and how to take matter forward.
Draft Notice of result of the meeting and arrange for publication through stock exchange.
Lunch - Borough Market.
Due Diligence call in preparation for securitisation transaction to close the following week.
Review comments from DD call. Discuss with Associate what role I will take in completion, tasks to be completed and deadlines.
Drafting ancillary documents and send out to all parties for review.
Meet trainee to organise presentation we are giving to 40 LPC+ students.
Phone calls and emails to associates/client contacts/contacts at other law firms to organise football fixtures.
Read through details of outstanding Conditions Subsequent on previous transaction which need to be chased - in preparation for discussion with Associate tomorrow morning.
Drinks in local bar with members of the department.
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