Capital markets law

Lawyers working in capital markets advise banks, companies, investment managers and governments on how to raise short, medium and long-term funding in the public markets.

Graduate careers in capital markets law

Despite the current financial turmoil, capital markets transactions continue to be an integral part of the world’s financial markets. Investment in capital market instruments is an invaluable tool for financial institutions and corporations managing credit risk and liquidity. Given recent market events, capital markets lawyers will play a pivotal role in facilitating these types of transactions in the new financial market landscape. Banks, companies and investment managers are, even now, developing new, robust financial products that satisfy investor and market concerns.

A good capital markets lawyer works closely with his or her clients to understand and address these concerns so that a capital markets transaction can be facilitated accurately and efficiently. A typical capital markets deal has a structuring phase, a negotiation and documentation phase, and a closing phase.

The structuring phase is the most intellectually challenging stage of the transaction (especially now), allowing a lawyer to be creative while actively working with a client to create a marketable product. At this stage, the lawyer’s role is to consider business issues that affect the client (such as liquidity and credit risk and/or potential accounting problems). The lawyer also advises on legal issues that might arise in respect of the product (including finance law, securities law and insolvency, tax and regulatory issues). The key to being a successful lawyer in this area is understanding the client’s business and responding to his or her commercial needs.

The negotiation/documentation phase is typically the longest part of the transaction. The lawyer must rely on technical skills to draft quickly, efficiently and accurately, along with interpersonal and communication skills to negotiate effectively. The closing phase is normally the shortest and most intense part of the deal. Last-minute negotiations often happen in this phase, and the parties will then complete the transaction by signing deal documents and wiring funds, if necessary. As these are emotionally charged times, they sometimes give rise to entertaining stories to be told at parties.

The work is certainly demanding on a lawyer’s time. It can be very difficult to achieve the perfect work/life balance because expertise in this practice area only comes with dedicated effort and time. However, with today’s technology a responsible lawyer should be able to devote time and energy to the practice while enjoying other pleasures in life, too. Given one’s role as counsel to clients, a lawyer can easily forge strong friendships with them. But the learning curve in this area is steep, and a junior lawyer should be willing to commit time and effort to developing his or her practice, including the relationships that drive it.

Is capital markets law recession-proof?

While the international debt capital markets have certainly been affected by the ongoing credit crunch, there is still plenty of work in this area, albeit in the context of helping clients access government liquidity programmes and/or restructure existing deals. But given the importance of the debt capital markets to the functioning of the global and domestic economies, skills acquired in this area will always be in demand.

What skills does a capital markets law solicitor need to do the job?

• The ability to keep an open mind and be creative.
• The ability to relate to clients and manage relationships with them.
• Attention to detail.
• Good organisational skills.
• A willingness to learn.

What's it like doing a trainee solicitor's job in capital markets law ?

Trainees will learn the basics of a transaction, including why the deal is being entered into from the client’s perspective. They provide the lawyers and the staff working on a deal with as much help as possible – a good trainee’s support is invaluable. A driven trainee can quickly become an important member of a transaction team, working on challenging tasks in any of the phases of the deal.

Types of law practised

• Finance.
• Contract.
• Company.
• Insolvency.

About the author

SHARAD SAMY is a partner in the financial markets group at ORRICK, HERRINGTON & SUTCLIFFE LLP. He graduated from Columbia Law School with a degree in law.