Banking and Finance Law
Banking and finance law represents an extremely large international sector that involves various industries and overlaps with many other practice areas. Banking and finance lawyers deal either with the borrowing of money or the management of financial liabilities, and their job is to negotiate and record the contractual relationship that exists between borrowers and lenders, and to ensure that the best legal and commercial interests of their clients are protected in loan agreements.
Type of clients
Banking and finance lawyers serve clients within the financial-services industry, including banks, financial institutions, lenders, agents, participants and borrowers (usually large corporations). The transactions these lawyers help facilitate can be of a highly complex nature and might include multi-state and international interests, secured and unsecured creditors, refinancing, debt-based acquisitions, recapitalisation financing, tender-offer financing, bankruptcy buyouts and securitisations.
Kind of work
There’s a very collaborative nature to a banking and finance law practice, and many solicitors enjoy the challenge of handling complex transactions to the satisfaction of both sides. This area of law is heavily regulated, hugely technical, and constantly evolving, and solicitors who work in this area generally become absorbed in the world of finance, regularly read the Financial Times or the City pages of their newspaper. They are required to ensure that their bank clients are in compliance with the relevant financial legislation.
Although working major deals can be exciting, there’s much pressure involved and because of the typically tight time constraints, the most successful lawyers in this practice area have a good business sense and know when to compromise and when to hold out. The hours can be long and banking clients can be extremely demanding, so being successful in this practice area requires being comfortable building relationships with people who are difficult at times.
Most lawyers who enter the practice area of banking and finance come from a background in finance, economics or accounting, and many have experience with bankruptcy and credit analysis as well. Negotiation skills are extremely important for a banking and finance attorney, as is the ability to pay close attention to the many details involved in transactions.
Banking and finance lawyers need to be highly organised, be able to coordinate activities and the people involved in deals, and enjoy projects that have a limited time span, since most deals close within six to eight weeks, or at the most several months. Banking and finance is also an extremely jargon-heavy specialisation, and lawyers who practice in this area must familiarise themselves with the meaning of many terms, including straightforward bank lending, acquisition finance, real-estate finance, project finance and Islamic finance.
Lawyers who specialise in banking and finance law meet with clients on a regular basis to establish their requirements, conduct negotiations via phone or email, draft and review legal documents, carry out due diligence to verify the accuracy of the information that’s been provided from the borrower to the lender, and may spend much of their day in on-site meetings to verify a company’s credit profile. They are also frequently involved in negotiations with the opposite party to hammer out the terms of an agreement and ensure accurate documentation.
Experienced banking and finance lawyers also assist with the structuring of complex financing models and ensure that they are compliant with all relevant laws. Like corporate lawyers, those who practice in banking and finance frequently attend board meetings, as many decisions need to be made and recorded in writing while members are convened. They are also responsible for overseeing post-closing work and the transmittal of signed documents.
Legal Practice Areas