If you are interested in becoming a banking and finance lawyer, you first need to get into understanding what this job is and all of the responsibilities it covers. Here, we will discuss what this job brings to the table and what it requires of you as well as what it takes to become a banking and finance lawyer.
What is Banking and Finance Law?
Firstly, let’s discuss what banking and finance law is and how it works. Banking and finance law deals with the contractual partnership between the borrower and the lender. Banking and finance lawyers work towards successfully negotiating and managing this partnership in any type of financial transaction. In doing so, they are ensuring that both of these parties’ needs and interests are fulfilled and met both commercially and legally.
There are different areas of this job such as:
- Bank lending: This can be a business or a personal loan agreement. The bank lends money to a borrower and this agreement comes with documented repayment terms attached to it.
- Property Finance: There can also be a loan asked for the purpose of helping the borrower obtain a property or even develop the land where the property is yet to be built on. In most cases, this kind of a loan is acquired through a mortgage.
- Project Finance: This loan goes for those multi-phased, long-term and multi-faceted infrastructure projects and these projects often involve some public services. The amount of money borrowed for the project is meant to help carry out the project till the end and then once it starts bringing profit, the money is paid back.
- Acquisition Finance: This refers to a loan taken by one company in order to provide the sufficient funds it needs to purchase another company. This area also includes leverages finance. Basically, the borrower lends a certain amount of money needed for the payment. The loan needs to meet the cost of acquisition requirements but without any commitment to paying its own money.
- Assets Finances: In this area, the lender takes security over a certain assets that have been purchased (these usually involve a quite considerable sums of money)
- Derivatives: This area is concerned with managing and understanding currency rates during a financial transaction that you as a lawyer are involved in.
- Capital markets: Once the financial transaction takes place, a borrowing entity is to give bonds to the investors.
- Islamic Finance: In this area, there is something called Shari’s law. This law was created to prevent the collection and payment of interest in any kind of loan. Anyone who decides to work as an Islamic finance specialist has a job of working with borrowers, investors and lenders in order to ensure financial and banking arrangements and they are obliged to be compliant with Shari’s law while doing their job.
What do Banking and Finance Lawyers Do?
Now that we have covered all the necessary areas and terms as well as what banking and finance is, let’s move on to discussing what banking and finance lawyers do. What is their main task? What do their job requirements involve? What are their responsibilities?
Well, as it can be seen from the above-stated list, banking and finance law contains a lot of different areas and they are all equally important. The job of a banking and finance lawyer can be very complex and it is a profession that is constantly evolving. For that reason, finance and banking lawyers tend to always be improving themselves and doing specialisations in particular areas. Firstly, a banking and finance lawyer can either represent the lender or the borrower during the financial transaction. Majority of the responsibilities covered by a banking and finance lawyer are concerned with the transactional elements that go into arranging financial deals between the lender and the borrower.
No matter what the specific area of banking and finance you are working in on this one particular case, you as a lawyer are expected to support the case with structuring, negotiations and handling financial arrangements. In addition to that, you as a banking and finance lawyer have an obligation to balance compliance by following the applicable laws and regulations during the financial transaction. These regulations and laws often tend to be spread across multiple different jurisdictions so you need to be aware of that too. Apart from that, your job also requires you to mediate parties. Your goal is to help them reach compromising and mutually-satisfying terms.
In addition to all of what has been mentioned so far, your job as a banking and finance lawyer also requires you to be actively in touch and seek interest in all future trends that can at one point in time affect your financial transactions. It is very important to stay updated about any changes in law that may occur as well. You are expected to be great at analytical fact-checking as well as to be especially keen to detail in your job. Lastly, as a banking and finance lawyer, you are expected to be on top of your game when communicating information to your clients. The information you provide needs to be clear, concise and fact-checked. This job truly requires and excellent attention to details and a lot of patience.
Corporate Finance Law
You may also be having questions about corporate finance law as well. It’s important that we cover this area too. Essentially, corporate finance law is an area of finance and banking law that is concerned with economics from the point of view of entrepreneurship and business. A lot of small businesses, start-ups, medium businesses as well as larger companies who are looking for ways to grow and expand need merger options that require some form of funding.
This is the part where businesses get introduced to corporate finance law that will help them obtain the finances they need in order to help their business thrive. That is how we get to the process of governing these financial transactions and where the banking and finance lawyers step in. This process is a body of law and as such, it serves for constructing and regulating the process of lending and borrowing.
As a comprehensive body of law, corporate finance draws upon many other areas in order to structure a financial deal between the borrower and the lender. Some of these area include:
- Contract law
- Company law
- Corporate insolvency law
- Securities and takeovers
International Banking and Finance Law
International banking law is another important area which needs to be tackled. This area is concerned with legal issues attached to global lending requirements as well as regulations and all of the complexities that come with understanding exactly how these aspects overlap and operate simultaneously.
This area also includes anti-terrorist laws, financial crime prevention and money laundering. All of the financial transaction can be found within the very specific regulatory framework as well as both national and international banking law incorporates:
- Contract law
- Corporate finance
- Private equity deals
- Banking lending practices
- Banking regulations
How to Become a Banking and Finance Lawyer
After receiving all of the necessary information about how banking and finance law works and what the responsibilities of a banking and finance lawyers is, let’s dive into how to become a banking and finance lawyer. Since this job comes with a certain level of complexity and a lot of requirements, you will need to showcase a certain set of skills, high level of interest and related work experience.
Firstly, let’s discuss what kind of personality is perfect for banking and finance law. Some of the key elements to look for are:
- Amazing attention to detail
- A broad understanding of different forms of loan and the way they are structured
- The ability to fully understand your client’s goals and ambitions and with that in mind the ability to advise them on whether the loan they are seeking is truly beneficial for them and actually meets their best interest
- Good personal skills that are needed for building and maintaining relationship with clients. This also includes amazing communication skills
Routes into Becoming a Banking and Finance Lawyer
There are several options here. You can take the graduate route and complete the undergraduate degree in law. On the other hand, you can also complete another subject and then conversion course and then take the LPC and go for a training contract. An alternative option is legal apprenticeship. You can turn to a lot of professionals like Wills lawyer for further information about apprenticeship and specialising in banking and finance law.
Banking and Finance Work Experience
Lastly, an additional element that can really help you boost your career as banking and finance lawyer is work related experience that showcases your abilities and high interest in finance. In addition to that, you can always go on a vacation scheme organised by a company that specialises in banking and finance law.
In conclusion, banking and finance is a very broad field. It requires a lot of attention to detail and high-level skills. The information provided above as well as the tips on becoming a banking and finance lawyer will be a lot of help on your journey.