Banking & finance law

Finance lawyers aim to achieve success for clients on financial transactions. Work may be for corporations, fund related or for individuals.

Graduate careers in banking and finance law

When acting for a financial institution such as a bank, at the outset a finance lawyer advises on the structure of the deal. There are myriad matters to consider, including the type and jurisdiction of the borrower, the way money will be made available (‘drawdown’), security issues and timing. This last issue is usually crucial as invariably timing is tight. Two weeks may well see a deal from inception to completion and it is often quicker than that.

Documentation – including the loan agreement along with a host of supporting documents such as guarantees, letters of credit, debentures and fixed charges – will then be prepared by the lawyers acting for the funder. Documents need to be negotiated, agreed and executed. Sometimes many drafts will be worked through before agreement on fine points relating to law or commercial issues is reached. Finance lawyers may need to bring in expertise from within the firm (for example tax or real estate lawyers), from outside local counsel to advise on local law issues, or from other professionals such as accountants or environmental consultants to provide specialist advice.

Completion takes place when the conditions required for the flow of money from the funder to the customer are met. These conditions include authorities for the execution of documents, valuations and reports on assets, insurance, legal opinions, accounts and money laundering requirements. Finance lawyers will need to make sure all the conditions are met at every stage and then report in full and in writing to the client through a transaction summary. The satisfaction of reaching this stage never goes away.

Private equity, Islamic funds and real estate investment trusts are all sources of deal equity; finance lawyers have to be aware of the issues these create as well as the specialist needs of each investor class. Shariah compliance, for instance, is just one area of finance where the finance lawyer can use structuring skills to achieve the aims of both bank and investor.

Is banking and finance law recession-proof?

Dramatic events have taken place in the banking world since 2008. The consequences of the catastrophic events that led to the demise of several international banks have meant that many solicitors, from partner to newly-qualified level, have lost their jobs. As with any downturn, however, there are opportunities within the existing market and recovering market.

While investors from private equity and Islamic funds to private investors have been biding their time until the market is ‘right’ for their return, there has been an enormous amount of restructuring work on existing deals and there have been a number of banks who have continued to lend in the market.

Those funds and investors appear now to be looking to return to the market and there is an expectation of an upturn in deal flow. Within a mixed economy there will always be cycles and we have now lived through one of the worst downturns. Whatever shape the recovery takes, there will be recovery as we move through to 2011.

What skills does a banking and finance law solicitor need to do the job?

• An ability to see the big picture.
• An outgoing nature and a sense of humour.
• Good communication skills.

What's it like doing a trainee solicitor's job in banking and finance law?

Usually trainees work under the leadership of a partner and their supporting associate. Tasks will include liaising with overseas lawyers, meeting internally with other parts of the firm to ensure all are ‘in the loop’, chasing the other side for replies and documents, liaising with clients to report the up to date position and researching points of law.

Types of law practised

• Contract.
• General corporate.
• Private equity.
• Property.

About the author

RODNEY DUKES is head of finance and projects at TAYLOR WESSING LLP. He graduated from Keele University with a degree in law and economics.