Role of a Transactional Lawyer in your Business

You might think that lawyers only head to the courtrooms or negotiate deals for the clients. However, it is highly unusual when it comes to practicing law.

While both corporate attorneys and litigators deal with companies and corporations, they do it in different ways. Litigation and transactional lawyers decide between the two areas to practice their expertise. Lawyers who facilitate or deal with transactions in the field of corporate law, employee benefits, or intellectual properties are transactional attorneys.

In the business world, transactional attorneys set up deals to avoid litigations and define the responsibilities and rights of parties in an event if something goes wrong. Put simply, transactional attorneys craft deals or transactions, whereas litigators step forward when those deals go wrong. Litigators typically resolve disputes using the judicial system that may include arbitration or mediation.

So how do transactional attorneys help with your business’s legal matters? Let’s delve into the details to find out the role of a corporate/ transactional lawyer in your business.

Role of a Transactional Lawyer in Business

Corporate or transactional lawyers advise businesses and companies on their legal rights, obligations, and responsibilities. Many business owners call transactional attorneys “corporate generalists” whose job is to advise Companies on their legal responsibilities, obligations, and business structures, and most importantly, evaluate ventures.

Not only this, corporate lawyers often coordinate with other transactional attorneys to serve the client’s needs. This may need coordination and assistance for real estate, ERISA, and tax issues. Moreover, a transactional lawyer not only structures drafts, or negotiates deals but also ensures the provision of a contract that is unambiguous and does not cause any problem for the clients in the future.

It is worth mentioning that not all businesses categorize corporate or transactional practices in the same way. For instance, many firms may have a separate practice group for mergers, acquisitions; however, others include the practices within a corporate department.

Take a look at this compiled list of areas in ways transactional attorneys can assist businesses.

Transactional Attorneys- Areas of Expertise

Corporate Governance

A company is a legal entity that scaffolds on its state laws. Individual states and countries make laws to create, organize, and dissolve corporations. This legal independence of corporations prevents their shareholders from becoming liable for corporate debts. This status gives businesses a perpetual life. That means if a significant stockholder dies, it does not change or alter the structure of the corporation, even if it is affecting the stock price.

Transactional attorneys, in this regard, help their clients create and organize a business entity. To form corporations, transactional attorneys draft incorporation articles that document the company’s creation and specify its management for internal affairs.

Moreover, transactional attorneys deal with different business entities in the form of partnerships. These may include several limited liability firms, partnerships, and trusts. Each of these forms comes with a set of legal responsibilities, tax burdens, and organizational structures. Transactional attorneys can help clients decide which legal types are ideal for their company they want to establish, and principles and relationships they want to construct.

Know that companies may call transactional attorneys later for legal advice pertaining to startup or business management, reviewing leases for equipment or space, drafting contracts, and non-compete agreements.

Venture Capital

Transactional attorneys have an essential role to play when it is about setting venture capital practices.  They work on public and private financing, as well as day-to-day counseling, to help startups get off the ground.

That means a transactional attorney can help new businesses and corporations find funds for the ventures. Plus, with the help of attorneys, businesses can organize operations and maintain legal structure after formation.

Furthermore, transactional lawyers can help start and expand businesses by managing many responsibilities such as corporate work, drafting incorporation articles and other legal documents, technology financing, licensing, mergers, and company acquisitions.

Many lawyers consider this work comparatively less confrontational as most of the clients work with the parties towards the same goals.  

Assistance in Merger & Acquisitions

It is another major category included in transactional attorneys’ practice areas. If your company works through merging with other businesses, it might need to add production facilities, property, and brand name. Besides this, a merger may neutralize business competitors in the same field.

An expert transactional attorney can provide legal counseling related to proposed transactions. When you hire a team of transactional lawyers from a renowned law firm, it helps you evaluate your proposed ventures. Competent transactional attorneys review all the crucial liabilities and assets of the company, such as employment agreement, intellectual property holding, financial statements, and real estate holdings. The list also includes current or pending litigations.

After assessing the situation, the attorneys raise issues that need assistance. For instance

  • Who is responsible for the investigation of the properties a company owns? What will happen to the workers of the target business or the stock options of the corporation’s directors?

Transactional attorneys consult with the clients to find answers to these questions. Clients and attorneys collaboratively determine which party should accept potential liabilities. The attorneys then draft a merger & acquisition contract and negotiate rights, obligations, and responsibilities each party will have.

Manage Corporate Securities

Some corporate lawyers or transactional attorneys specialize in security laws. Under the Security Act 1933, corporations need to register themselves with the federal government if they sell securities to the general public. It is worth mentioning that corporations need to follow some protocols related to disclosure of confidential information to investors and shareholders, depending on the nature and size of the company.

A business must file a detailed report with the Security and Exchange Commission if it trades the shares on a public stock exchange. The security act addresses all the obligations of a company traded on the stock exchange. 

This is where the role of transactional attorneys comes into play. The attorneys make a report for initial public offering, quarterly and yearly disclosures, and other disclosures to ensure that companies follow the laws of security act.  

Things like poor financial results, impending litigation, and government investigations may affect the stock price. Even if businesses do not specialize in security laws, the stock issuance, and report creation need to follow a set of rules that only a transactional lawyer can deal with.  

Precisely, the renowned law firm handles the following corporate transactions.

  • Formation and organization of corporations, their LLCs and partnerships
  • Amendments and changes in organizational documents to maintain changes in the company’s operations
  • A partnership agreement, shareholder agreements, operating agreements, and other instruments
  • Mergers, sales, and purchases of business
  • Advice on employment laws
  • Real estate transactions and litigation
  • Insurance litigation with coverage issues
  • Licensing agreements related to sale and purchase of intellectual property corporate 
  • financing including equity and debt

Why does your business need a Transactional Lawyer?

Whether you have a small/medium-sized business or a giant corporation, you need a transactional lawyer who can support your business transactions, including acquisitions, revisions, and several other amendments. As mentioned earlier, transactional attorneys expertly review legal documents before you submit them to other parties and your local jurisdiction, which is responsible for approving as well as enforcing the transactions.

In addition to that, a transactional attorney makes sure that the documents your company drafts communicate your intentions and goals precisely. Plus, they evaluate the language of the documents to see whether it meets the legal standards and is acceptable to the industry parlance. You can hire an in-house transactional attorney or engage one on a project basis.

In short, transactional attorneys are experienced and qualified professionals who look for weaknesses and ambiguities in business transactions. The lawyers can highlight the loopholes to protect your business from any liabilities.  

Your business can be vulnerable to several exploitations if you make any arrangements that involve intellectual property and money without knowing the laws. No one can provide better assistance than a transactional attorney when it comes to handling these matters. They know the appropriate structure you can use to reduce financial and legal risks for your business.

Moreover, a transactional lawyer or attorney performs its function in an efficient, effective, and ethical way. It is because they have an in-depth understanding of legal and commercial contexts. This knowledge ensures that your business transactions follow legal boundaries and can exhibit a commercial point of view.

Bottom Line

In a nutshell, corporate and commercial transactions resolve business needs to close deals. They are mandatory for businesses when it comes to withstand legal challenges. A transactional attorney, in this respect, is an experienced business adviser to help companies take advantage of different opportunities, manage risks, define roles, protect profits, and avoid liabilities.
Thus, you can hire us to protect your company’s interests and different corporate transactions. We can help you identify risks, draft documents, and anticipate various liability traps.