What Do Finance Lawyers Do – A Simple Guide

Many training contract candidates I speak to struggle to distinguish what finance lawyers do.

Often, this is tied to a lack of understanding about the broad range of work finance lawyers do.

In this post, I’m going to give you a simple overview of what is commonly meant by “finance lawyers”, the different types of work they do and and roles they take, and why people choose to become finance lawyers.

So, let’s dive in and get some clarity around this.

What do we mean by “finance lawyer”?

If you’ve read my simple guide to what commercial lawyers do, you’ll know that the term “commercial lawyer” is used as an umbrella term for all lawyers who advise businesses – so finance lawyers can also be called commercial lawyers.

To further complicate matters, finance lawyers are also sometimes referred to as “corporate lawyers” because they often work on corporate transactions.

And, as if that’s not enough, people also use the term “transactional lawyer” for both corporate lawyers working on corporate transactions (such as M&A) and finance lawyers who might support those corporate transactions and or other large finance transactions. The term “transactional lawyer” is often used to distinguish lawyers who work on non-contentious deals rather than contentious work.

And one final curveball is that some people call them “finance lawyers”, some call them “banking lawyers”, and others call them “banking and finance lawyers”.

Clear as mud? Great!

Whatever we call them, the main distinguishing feature of a finance lawyer is that they usually specialise in a particular area of banking and finance. Simply put, they primarily advise companies that need external funding or companies that provide or arrange the funding.

Different areas of the banking and finance world are often incredibly technical and always evolving, so most finance lawyers narrow their focus and become experts in a specific area.

And there are a huge number of different areas of the finance world.

Which areas do banking and finance lawyers work on?

Banking and finance work is a big part of many UK and US law firms’ practice, largely because London is one of the world’s main financial centres for lending and investments.

With this comes a huge variety of work for banking and finance lawyers.

This includes:

• Acquisition finance – a support function to the corporate team on corporate deals. This is where a company or private equity investor/sponsor loans money to acquire another company.
• Asset finance – where a company borrow money to purchase high-value capital assets, such as equipment and vehicles.
• Project finance – where a company borrows money to fund large projects, typically energy projects (eg renewable energy) and infrastructure projects (eg transport networks), often in multiple payments which are contingent on project milestones.
• Debt and equity capital markets – where companies go to the capital markets to raise money, either by raising debt (via bonds) or selling equity/shares via an initial public offering (IPO) or later via secondary offerings.
• Property finance – where a company borrows money specifically for the purchase or development of a property.
• Securities – where a portfolio of debt is structured in a way that it can be sold to another company.
• Derivatives – where a company manages currency rates during a transaction.
• Islamic finance – where lawyers ensure that finance deals involving Muslim companies are structured in a way that abides by Shari’a law.
• General bank lending – where a company seeks a general loan from the bank to fund more day-to-day operations.
• Banking regulation – the financial services industry is heavily regulated, and some finance lawyers specialise in advising clients how to remain compliant and guide them through investigations brought by regulators..
• Banking litigation – lawyers assist with a wide range of financial disputes and some criminal matters, such as fraud and money laundering.
• Restructuring and insolvency – where companies have financial problems and look to restructure their financial commitments and liabilities or take the company through an insolvency process.

The work of finance lawyers can touch on all stages of the lifecycle of companies, from start-ups to growth stages, to large mergers and acquisitions, to restructuring or insolvency.

What roles do finance lawyers play in banking and finance matters?

Whilst the roles finance lawyers play are many, there are some common roles they typically have in banking and finance matters:

• Working with other departments – quite often they will be working with colleagues in other teams such as corporate, tax, real estate or insolvency.
• Dealing with complexity – given the highly technical nature of much of the work, they will need to be able to work with complexity and communicate it in a simplified manner for clients to understand and make decisions on.
• Attention to detail – partly due to the complexity and partly due to the large amounts of information and details, a key role of a finance lawyer is to review all of the details and to determine the most pertinent details to achieve their client’s goals and manage the risks.
• Understanding the financial world and related trends – they need to keep up with changes and trends in a dynamic and constantly evolving financial world.
• Devising innovative solutions – given the constantly changing financial landscape and regulation, together with the unique financing needs of clients, finance lawyers are trusted to come up with innovative ideas for how to structure finance deals and investments.
• Managing international components – much of the work finance lawyers will do will have an international component. This will need knowledge of, and access to advice on, legal and regulatory matters in different jurisdictions, as well as managing the practicalities of compliance in each country.

In most cases, finance lawyers play a key part in facilitating funding for business-critical transactions and other operations.

Why do people choose to become finance lawyers?

As with all specialisms, there will be lots of different reasons why people choose to become finance lawyers.

If this path interests you, I recommend you read as many banking and finance lawyer profiles and speak to finance lawyers in person to understand their motivations for their specialism.

Some of the more common reasons for being a finance lawyer are:

• The complex, technical nature of the work – making it intellectually challenging.
• The constantly changing nature of the finance world – including changes in legislation and regulation, and political developments that influence them.
• The transactional nature of much of the work (unless you’re a banking/finance litigation lawyer).
• The work lawyers do allows the banking industry and financial world to operate
• A fascination with the financial world and an attraction to the need to be fully immersed in it.
• The opportunity to use numeracy skills and understand financial/numerical concepts.

Definitely do your own research and find your own motivations, but if these things are appealing to you, you may well want to train with a firm offering banking and finance seats.

Understanding of what finance lawyers do evolves over time

The reality is you can only ever scratch the surface of what banking and finance lawyers do when researching this from outside.

You should certainly try to do as much of this as possible, for example, keeping up with the changes and global trends in the banking and finance world.

Ideally, you should also do some field research through work experience with a City law firm, a bank or other professional services firm that works in the City.

No matter how much you learn, you’ll still find yourself in the same boat as most finance lawyers did at your stage. That is, you’ll only understand banking and finance at a relatively high level before you do it.

Once you do it, you’ll be exposed to more specific and technical specialisms that will lead you to your own choices around what you do when you qualify and beyond.

For many junior lawyers, that’s an area of banking and finance they didn’t know much about before they trained in it.

For other junior lawyers, they choose a more corporate route, but the banking and finance experience they got during their training contract proves to be valuable learning for their corporate law path, where it will always be relevant.

So, do your research and decide how much of a deep dive into finance you want during your training contract and choose firms to apply to accordingly.