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Tax law: area of practice

Tax is a technical area of law and requires a high proportion of time spent on legal research, explains Graham Muir of Nabarro LLP.
Typical working hours are steadier than most practice areas, because of being a small part of a large number of transactions.

The tax legal practice area essentially involves the identification, minimisation and allocation of the incidence of taxation or tax risk in a particular transaction. It can also involve negotiation or discussion (or ultimately litigation) with HMRC and (infrequently) detailed quantification of tax liabilities.

In commercial firms, the tax team works on most transactions that the firm advises on – be it corporate M&A (mergers and acquisitions), real estate, finance, structured finance or restructuring, and also has some freestanding tax work. Tax lawyers therefore tend to work on many matters at a time. Matters vary from one-off queries, that may only be one phone call or may take a couple of hours, to the largest cases that a firm takes on, taking many months. For a large matter, the tax team would normally comprise one partner, one associate and a trainee. Tax lawyers spend the majority of their time in the office but attend external meetings from time to time (at the offices of clients or of the other side’s lawyers). They also occasionally attend conferences with counsel (barristers).

What sort of work/life balance can tax solicitors enjoy?

Typical working hours are steadier than most practice areas, because of being a small part of a large number of transactions – 9.00 am to 7.00 pm in a typical commercial law firm. Accordingly, work/life balance tends to be better than many legal areas, with all-night stints and significant weekend working relatively rare. Opportunities for travel are less than in other areas but (in contrast to, say, 15 years ago) there are frequent opportunities to socialise with clients.

What are the best and worst parts of the job as a tax lawyer?

Tax is a different way to practise law. It is a technical area and therefore requires a high proportion of time spent on legal research. A concomitant of working with other teams in the firm as your primary client is that you have less contact with external clients than your counterparts in transactional teams. Whether these are good or bad things will depend upon your outlook! The nature of the work (and the risk of being negligent) also means that, as a junior, you are subject to a higher degree of supervision than elsewhere.

Are there any new cases that training contract interview candidates should know about?

Historically, tax has received very little media coverage. That has changed with the recent controversies over the tax paid by Google, Amazon etc, where legitimate tax planning arrangements have conflicted with the views of governments and the public on how much tax should be paid. In addition, tax avoidance arrangements entered into by high net worth individuals (including many celebrities) have further highlighted the role played by certain less scrupulous tax advisers. These developments have led to a welter of anti-avoidance legislation, both domestic and global, being introduced.

How recession-proof is tax law?

Tax work is significantly affected by any fall-off in transaction work. However, restructuring work also requires tax advice so work levels in tax tend to be less volatile than those of the firm as a whole.

The workload of a trainee solicitor

Tax trainees carry out a lot of legal research and are also involved in the drafting of tax documentation. It is difficult for tax trainees to take early responsibility, given the technical nature of the work (which inevitably requires close supervision). Trainees considering a tax seat should not expect to have any detailed prior knowledge of the area – all they need is an enquiring mind and a desire to experience an advisory, rather than a transactional, seat.

Types of law practised by tax lawyers

  • Tax.
  • Contract.
  • Property.
  • Company.
  • Trusts

Successful tax solicitors have...

  • Analytical and logical thought processes.
  • The ability to deal with abstract concepts.
  • Intellectual stamina.
  • The ability to deal with many different matters at once.
  • Research skills.
  • Commerciality.
  • The ability to explain difficult concepts in layman’s terms.

GRAHAM MUIR is head of tax at NABARRO LLP. He graduated from the University of Cambridge with a degree in law.