How the best corporate attorneys ensure ongoing business success.
As technology, the gig economy, and globalization continually redefine the business landscape, corporations must evolve with the modern corporate culture while minimizing risk and maintaining compliance. Corporations of all types and sizes rely on corporate attorneys to navigate the complex legal terrain that governs their operations, helping them establish boundaries for their compliance and decision-making processes.
In this blog post, we explain the role of the corporate attorney, the various facets of corporate law, and the reasons corporate attorneys have become an indispensable part of the business ecosystem.
What is a corporate attorney?
Corporate attorneys provide legal advice to new and established companies regarding federal, state, and local regulations. They also represent the corporate entity (but not individual shareholders or employees) in legal proceedings such as contract disputes, regulatory compliance matters, and intellectual property cases, and are frequently retained as a general counsel by the corporation.
While business lawyers typically focus on smaller operational details and transactions, corporate law encompasses a much broader range of activities and specialty areas, including but not limited to:
● Negotiating investor, shareholder, and purchasing agreements
● Overseeing asset financing for large capital investments
● Documenting company policies
● Corporate asset distribution and taxation issues
● Negotiating licensing and partnership agreements with other companies
The scope of corporate law encompasses all legal matters related to the ownership, formation, and management of a corporation, so the range and type of issues varies significantly from company to company.
Legal aspects handled by corporate attorneys
The stereotypical image of a corporate attorney is usually one of a buttoned down professional carrying a briefcase to and from the courtroom as they represent the company in important legal proceedings. In actual practice, many corporate attorneys never enter a courtroom, instead spending their time helping clients prevent or avoid litigation by ensuring compliance and negotiating clear and effective agreements.
Despite the breadth of issues that can potentially cross their desk, the legal aspects commonly handled by corporate attorneys as they collaborate with company leadership can be broken into a few basic categories:
● Mergers and acquisitions: Negotiating terms and agreements between the two parties when corporations join forces, or one company purchases another.
● Corporate governance: Developing leadership frameworks that include articles of incorporation, bylaws, and board of director roles and responsibilities.
● Venture capital: Working with the CFO and other company leaders to secure public or private financing and negotiate terms.
● Securities: Advising public corporations to ensure compliance with the regulations created to prevent crimes like fraud and insider trading.
● Contracts: Writing, negotiating, and enforcing legal contracts with landlords, joint venture partners, financial institutions, vendors, and other entities.
The impact of legal advice on business decisions
The line between business advice and legal advice is often blurred, since many legal decisions have a direct impact on business outcomes, and vice versa. For example, a savvy corporate attorney might negotiate terms during a merger that lead to a seamless leadership transition, minimize employee turnover, and make the combined entity more sustainable over time.
Despite the unavoidable impact on business decisions, corporate attorneys have a duty to explain legal risks and requirements to the best of their ability, while leaving it to the business leaders of the corporation to make important business decisions.
Safeguarding attorney-client privilege in corporations
This clear cut division between legal and business counsel in the corporate world is also important for maintaining attorney-client privilege, since only legal advice shared in confidence is protected. This built-in confidentiality protection is also essential for establishing open and transparent lines of communication between lawyers and their clients.
When and how to consult with a corporate attorney for your business needs
Most publicly traded companies retain an in-house lawyer or team of specialized attorneys to handle the range of legal issues they encounter before, during, and after incorporation. Business leaders should always consult with their in-house team or seek expert outside legal advice any time they are:
● Developing or revising corporate governance structures or making significant changes to board of director (BOD) operating policies or personnel.
● Considering or completing a merger with another company.
● Purchasing or establishing a new business entity.
● Navigating legal issues that directly impact shareholder rights and obligations.
● Engaging with competitors who appear to be infringing on patents or copying protected intellectual property.
● Addressing cybersecurity issues and attempting to safeguard the legal rights of customers and employees while maintaining data privacy.
Corporate attorneys usually have a lot on their plates, so it is a good practice to be well prepared with questions and supporting documentation before you request a meeting. Larger companies will typically have policies and procedures in place to define how legal support is requested through pre-defined communication channels. These streamlined processes keep the attorneys from becoming bogged down by unproductive meetings and emails.
In conclusion
As corporations expand in size and complexity, the role of the corporate attorney continues to grow in importance. The vast scope of corporate law has opened the door to greater specialization, with experts in technology, finance, cybersecurity, and regulatory compliance combining their legal and business acumen to help corporations succeed, while maintaining the important distinction between legal and business advice.
Corporate attorney FAQs
What is the difference between a corporate attorney and a business attorney?
Business attorneys and corporate attorneys both serve as in-house counsel and are directly responsible for the mediation or litigation of legal issues for their clients, but corporate attorneys are more likely to handle large-scale regulatory compliance, corporate governance, and mergers that are specific to incorporated businesses.
What special qualifications do corporate attorneys need?
Business acumen and relevant experience certainly help, but the education and basic qualifications required for corporate law are no different than any other legal specialty. Along with an undergraduate (bachelor’s) and juris doctor (J.D.) degree, a corporate attorney must be licensed to practice law in the state of the company’s legal entity.
What types of clients do corporate attorneys work with?
In addition to the publicly traded, multinational companies often associated with corporate law, the clients who engage the services of corporate lawyers include hedge fund and mutual fund investors, private equity partners, investment banks, insurance companies, and dozens of other entities seeking sound legal guidance.
Do startup companies need corporate attorneys?
Startup companies do not usually deal with the full range of issues encountered by established corporations, but the services of a corporate attorney might still be necessary for intellectual property protection, business restructuring, funding agreements, and many other issues. Some corporate law firms and attorneys specialize in startup law.
How do corporate attorneys bill for their services?
In-house corporate attorneys are usually paid a salary like other company employees. When outside attorneys are hired, the billing mode varies depending on the situation. Standard hourly billing, flat fees, project-based billing, and retainers to cover expenses in advance are among the common models.
References
https://www.investopedia.com/terms/c/corporation.asp
https://www.findlaw.com/smallbusiness/closing-a-business/settlement-and-distribution-of-assets-checklist.html
https://www.bloomberg.com/news/articles/2023-08-07/what-defines-insider-trading-and-when-is-it-illegal
https://www.sdcba.org/?pg=BusinessandCorporate201705
https://www.onboardmeetings.com/blog/corporate-governance/
https://www.mycorporation.com/learningcenter/incorporate-business.jsp
https://smartasset.com/financial-advisor/hedge-fund-vs-mutual-fund
https://startupsavant.com/do-i-need-a-lawyer-for-my-startup