It has long been a common career path for corporate and securities attorneys to move to in-house legal positions after some training at a large firm. Many of those who do so eventually make another transition within their corporate employer: from attorney to non-attorney, assuming some sort of business role within the company. These ex-lawyers often justify the move by saying that the business work is more central to what the corporation does and more interesting than legal work. I’ve always been skeptical of these claims, however, hopefully not just because I’m trying to justify to myself my decision to remain an attorney.
More often than not, transactions that I’m involved in end up closing later than the date that the client initially targeted at the beginning of the process. Many clients that do a lot of deals are understanding about this and mentally build in extra time, just like homeowners don’t expect renovations to happen precisely when contemplated. However, many of those who are less experienced at deal-making can be disappointed and express displeasure to their attorney.
When I was a young, large-firm attorney, the general consensus among my colleagues was that the most interesting corporate law work involved deals – big dollar M&A, public securities offerings, etc. – and that routine transactional work – supply agreements, non-disclosure agreements, etc. – was dull and undesirable. (I realize that my non-attorney readers will be surprised to learn that some corporate law work is even arguably non-dull.) The only reason to devote one’s career to the routine work (many would say) is that it tends to be less stressful and more conducive to seeing one’s family from time to time than is the case with big deal work.
I had lunch recently with two law school classmates, each of whom works in-house at different large companies, each overseeing a team that negotiates routine contracts. Both of them agreed that there is a recent trend among large companies with in-house legal departments to deemphasize the resources devoted to attorney review of routine contracts, though at the same time there is a greater emphasis on hiring regulatory attorneys. With fewer attorneys available to review contracts, there is greater reliance on non-attorney negotiators. The calculation is that the risk involved in these contracts is more theoretical than practical, so it is not worth the cost and process delays that result from involving attorneys. [Read more…]
The main functions of a transactional attorney working on a deal are fairly obvious: to draft (or review) agreements that accurately reflect the deal struck between the parties, to advise the client about whether the actions contemplated by the agreement pose any legal or business risks, etc. Another less obvious but still important role that the attorney can play is to communicate the client’s positions to the other side’s attorney, rather than having the client be forced to communicate those positions directly to the other side’s principal. It can be awkward for the principals to speak directly on certain matters, and the attorneys play a useful filtering role. [Read more…]