What Is Corporate Law? A Guide for Aspiring Solicitors

Most definitions of what corporate law is are too generic.

They’re usually something like “the law that governs companies”. They then go on to list some related practice areas and focus mostly on M&A. Whilst this is all true, you need a deeper understanding of what corporate law is if you want a training contract with a corporate firm.

One of the big problems is that many law career resources conflate corporate law with M&A. That’s because it’s the headline work done by many corporate lawyers. But this narrow focus oversimplifies things and isn’t the full picture.

In this article, I’ll draw on my 10 years’ experience of corporate and commercial practice to give you a more comprehensive picture of what corporate law actually looks like. I’ll include what it covers, how different areas of corporate law fit together, how it differs from commercial law and why all of this matters for you in the TC recruitment process.

Ok, let’s dive in.

What “corporate” really means

The simplest definition of “corporate” is that it relates to a corporation, i.e. a company.

In the context of underlying company law, “corporate” relates to any company. However, when we’re talking about the work done by many of the law firms that offer training contracts, we usually use “corporate” to refer to a larger company or group of companies.

When we refer to “corporate law”, we mean the laws and legal activities that relate to larger companies/groups themselves. This is more about the company as a legal entity than its day-to-day commercial activities (and I address the distinction between corporate and commercial later in this article).

What does corporate law relate to?

It can be helpful to think of corporate law as affecting every stage of a company’s life cycle.

The main stages of the cycle are:

1. Forming and structuring the company (including shares/ownership and whether it’s a private or public company)
2. Funding the company (the different ways companies raise money to fund key business activities)
3. Governing and running the company (corporate governance and legal compliance)
4. Buying, selling and combining companies (changes of ownership and/or structure)
5. Restructuring and winding up (helping companies adjust course or close down)

The most prominent area of corporate law is mergers and acquisitions (M&A), which falls under stage 4. This is the bit that many firms are known for and that they most heavily promote to aspiring solicitors. But the reality is that corporate law as a field is much wider than M&A.

So, let’s look at each stage of the company life cycle to get a fuller picture of corporate law.

(1) Forming and structuring the company

At the outset, there are decisions to make about the structure of a company that will affect
the ownership, liability and profits. For example, is it to be a limited company or a partnership?

When incorporating a company, it must be done in accordance with company law. And there will be related decisions to make around the company’s constitution (articles), share structure, and its directors and shareholders.

Where there’s a group of companies, the structure of the parent and subsidiaries is a critical part to get right. This structure will be a key part of managing risk and implementing complex tax-saving arrangements.

(2) Funding the company

Most companies need money to sustain themselves and grow.

You will hear the term “corporate finance” around this, which is essentially the umbrella term for how a company raises money and structures its funding. Given that the term sits across both corporate and finance, I see it causing confusion for aspiring solicitors.

Whilst there are no clean definitions, I think it can be helpful to think of corporate and finance legal work being split out in this way (and you will see and hear firms do similar):

• The equity side – raising money by issuing shares: IPOs/flotations, rights issues, equity capital markets (ECM), and the public-company work around it. This is often considered corporate work (and handled by a corporate/ECM team).
• The debt side – borrowing: bank lending, debt capital markets (bonds), acquisition finance, project finance. This is often considered banking & finance work.

And the reality is that on a big corporate deal such as an acquisition, corporate and finance lawyers will work together to make the deal happen.

(3) Governing and running the company

There’s a lot to manage to ensure a company is compliant with the laws that govern companies and their business operations.

In the UK, corporate law is built largely on the Companies Act 2006. In addition to a company’s obligations under that Act, there are other laws it must comply with, such as the newer Economic Crime and Corporate Transparency Act 2023.

Companies therefore need robust corporate governance practices, including a focus on how they’re run, by whom, and on the different duties and rights of key stakeholders, such as directors, shareholders, and the board.

When advising a company, a corporate lawyer represents the company itself, not the shareholders or directors personally. And they will apply corporate law to benefit the company and ensure it remains compliant.

An example of this is a corporate lawyer advising the board of directors on its legal duties before it makes a major decision for the company.

(4) Buying, selling and combining companies (M&A)

This is the heart of many corporate lawyers’ work.

They advise on the buying and selling of companies (or parts of them), including mergers, acquisitions, disposals and joint ventures.

This type of corporate law focuses on the core legal agreement for a sale or other corporate transaction. The corporate team coordinates everything required to ensure the parties are comfortable enough to sign. For what that looks like day to day, such as due diligence, the documents, and getting to completion, see what corporate lawyers do.

A corporate transaction will also require specialist lawyers to advise on other areas of law, for example:

• Employment (the target company’s staff)
• IP (the brands and tech being bought)
• Pensions (the target company’s staff pension arrangements)
• Tax (deal structuring)
• Real estate (the property the company owns)
• Finance (funding the deal)

Many corporate lawyers are drawn to this area because of the need for a general working knowledge across these different areas of law. Also, they enjoy being the main conductor of the whole deal, bringing in other teams to play their individual parts as needed.

(5) Restructuring and winding up

Many companies will face challenges along the way and will need to adapt.

They may need to improve efficiency, reduce costs, or address other ways the company may be struggling. And this can be done by restructuring how a group of companies is organised.

Sometimes this isn’t an option, or it doesn’t work, and a company becomes insolvent and needs to be wound up.

Corporate law governs how these matters are handled, and some specialist corporate lawyers work predominantly on such matters.

Now, let’s look at how corporate law sits alongside commercial law.

Corporate law vs commercial law

In my experience coaching TC candidates, there’s a lot of confusion around the difference between corporate law and commercial law.

Unfortunately, much of this confusion comes from the terms being used differently and interchangeably by lawyers, law firms and grad recruiters.

Whilst neither has a strict definition and there is definitely an overlap, I think of them like this:

• Corporate law = the company itself, including how it’s structured, owned and governed. This will cover areas such as company formation, shares, directors, M&A, governance, and all matters under the Companies Act 2006 and other company-level legislation.
• Commercial law = what the company does, including its day-to-day trading, contracts and commercial relationships. This will cover areas such as supplier and distribution deals, IP, regulatory matters, and disputes.

Given that ‘commercial’ is a broad term that can include anything that affects the commercial side of a business, ‘commercial law’ is often used as the umbrella term for any areas of law relating to a business. And then corporate law is seen as a sub-category of commercial law (the same goes for finance law).

This is illustrated by the fact that many of the corporate-heavy law firms ask TC candidates why they want a career in commercial law.

Why this matters in the TC recruitment process

When I speak to grad recruiters at corporate law firms, they say they reject candidates for a lack of real understanding of what corporate law is.

So, to be successful, you will need to work hard to understand this more deeply than other candidates. Do your research and look beyond the most prominent M&A practice areas. Seek to understand the range of corporate and finance-related practice areas at the firms you’re applying to.

The good news, though, is that the bar is not as high as you think for understanding this more than other candidates. You just need to be proactive and consistent in continually learning about all things corporate law.

Ultimately, firms want to be convinced you’re motivated to train with them. And a common mistake I see candidates make when answering the “why this firm?” motivation questions is failing to show a deeper understanding of the corporate work the firm does.

If you can do this, you will be more convincing with your motivations AND demonstrate greater commercial awareness.

The bottom line

So the key takeaway is that corporate law is about the company itself.

It touches on all stages of a company’s life cycle, from its foundation to its closure, and is more than just M&A.

And understanding the way firms structure their corporate law teams and practice areas around this will give you a competitive advantage over other candidates.