What is commercial law? A guide for aspiring solicitors

Commercial law is a broad term that technically encompasses a number of different areas of practice. Transactions make up a lot of what is ‘traditionally’ thought of as commercial law, especially for solicitors, and the area has a reputation for high value deals and high salaries for trainees.

• What is commercial law?
• What do commercial solicitors do?
• What is life like as a commercial trainee?
• What skills do you need to be a commercial law solicitor?
• Types of law practised within commercial law
• How much can I earn in commercial law?
• Specialisations of commercial law

What is commercial law?

Commercial law covers the vast array of corporate deals and transactions work undertaken by City law firms across a variety of industries. Such work might include the sale of assets or the establishment of a contract for business operations (eg the supply of goods/services or a lease agreement). Solicitors are brought in to complete due diligence, draft the necessary contracts and documents and negotiate with lawyers from the other side until an agreement is reached and a deal can be finalised. Clients in commercial law can be domestic businesses or multinational corporations. More specifically, they include banks, insurance companies, hedge funds, private equity funds, property firms, governments and government agencies. Commercial lawyers are mostly desk based, but they will also need to attend client meetings in person.

What do commercial solicitors do?

A commercial law partner might work on between five and ten transactions simultaneously while trainees and associates might work on fewer transactions at a time but will be more immersed in their transactions and complete document-intensive work. Transactions typically last between one and six months. Working hours are long and can spike when a transaction is in the later stages.

What is life like as a commercial trainee solicitor?

Typical commercial law trainee tasks include researching questions of law, creating first drafts of documents, preparing emails of advice to clients, joining calls and meetings with other lawyers, and helping to manage the transaction process.

What skills do you need to be a commercial law solicitor?

Commercial law solicitors need to have good communication skills with both clients and their team, whether that is working alongside partners, associates or other trainees. The ability to turn academic or legal concepts into solutions for clients is also valuable. Clients will want to know what the legal outcomes mean for them away from what they mean in the legal sense. Commercial trainees will also need a good amount of initiative – the ability to come up with creative and independent solutions to legal problems, but also not being shy to ask for assistance when needed.

Types of law practised within commercial law

• Contract
• Intellectual property
• Employment
• Trusts
• Land
• Financial regulation
• Insolvency
• Tax

How much can I earn in commercial law?

Commercial law, and its various related areas, are among the highest paid in the legal profession as a whole. You can take a look at our article on How much you can earn as a trainee solicitor to get a broader picture of how much law firms pay trainees, but it’s not uncommon for firms with UK offices to offer £50,000 to trainees in their first year, rising to anywhere up to and above £100,000 upon qualification.

Specialisations of commercial law

As mentioned above, commercial law can be used as a bit of an umbrella term. Shipping law, for example, is highly specialised area of law in its own right, but will still bear all the contracts, disputes and claims that are endemic to commercial law. While there are some solicitors that build a practice broadly within commercial law with commercial clients, it is likely that at some point fairly early on in your career that you’ll specialise in another area of law related to commercial law. We’ve included some overviews of other areas of practice that have a strong tie to commercial law below:

Capital markets

This area of practice centres around the issue and/or sale of equity in public companies, which are traded on stock exchanges. The work involves preparing for IPOs and, once a company is listed, secondary fundraising to raise money through fresh issues of shares. Solicitors also work on dual listing on two or more stock exchanges, which can be complex work to ensure the company complies with the regulations for each one. It’s important to keep on top of changes from the Financial Conduct Authority and AIM Regulation. For an IPO, a team could consist of a partner, two associates and a trainee – assisted by specialist lawyers in employment, commercial, intellectual property, real estate and corporate tax. Lots of information about the company needs to be collected and fact checked and the financial history of the company provided to potential investors. A pre-float restructuring of the business to create a single class of share and/or the creation of a share-for-share exchange agreement with existing shareholders may also be required. Trainees often liaise with the most senior employees at investment banks and client companies, and the contacts you make will prove invaluable.

Construction

Construction lawyers tend to specialise in either drafting and negotiating contracts for the construction, demolition or repair of infrastructure, or resolving disputes that arise on construction projects. Trainees will assist with one or both of these areas. Tasks can include drafting construction contracts or, for a dispute, creating bundles to be submitted to court or an adjudicator and taking witness statements. Clients include property development companies, public bodies with a remit involving the construction/maintenance of public facilities, organisations in need of factories or offices and any professional services providers that are involved in the development of a project, such as architects and engineers. Trainees liaise with clients and third parties from an early stage of their careers, as well as working alongside lawyers specialising in property, real estate and planning. One of the main areas that has developed increasing traction over the years has been ‘modern methods of construction’ (MMCs), techniques used to construct buildings – both residential and commercial – quickly but safely, and that offer sustainability benefits too.

Corporate law

Corporate lawyers can count businesses in any sector (for example, life sciences, financial services and technology) as well as investment banks and private equity and hedge funds – who finance corporate deals – as their clients. Solicitors might advise on buying and selling companies, joint ventures and stock market listings among other transactions. Their job is to help a client achieve a goal and work out the best way to structure a deal. Transactional work is known for its peaks and troughs; at busy points, corporate trainees have been known to work 60 hours a week or more. Late nights and weekend working aren’t uncommon. A typical workload could be one large or three-to-four smaller transactions. Deals can be completed in four to six weeks, but some take longer. Solicitors’ responsibilities include due diligence (investigating the target business), preparing and negotiating agreements, securing regulatory approvals and closing the transaction. Depending on the deal, corporate lawyers may need to consult experts in other practice areas at their firm, such as tax, employment, competition, regulatory and banking & finance lawyers.

Energy, transport and infrastructure

Clients of energy, transport & infrastructure lawyers include vehicle manufacturers, commodities traders, superyacht owners, train and bus companies, freight forwarders, hauliers, marine insurers and motor insurers. Lawyers tend to specialise in transactional work (for example, advising on the purchase of another company) or commercial dispute work (advising on issues such as contaminated cargo, ship collisions and pollution claims). Advances in technology have a big impact on this field. For example, driverless cars will transform the whole notion of liability. Or, with cyber crime on the rise, what happens if new technology on ships and planes is hacked? Other topics to be aware of include electronic ticketing, poor rail infrastructure, road congestion, lack of investment and the potential third runway at Heathrow. Depending on the size of a transaction or case, you could be working with a team of four or fifteen colleagues. If a case is close to going to trial or a deal is nearing closure, lawyers may need to work extra hours in the evening or at the weekend. There are usually plenty of opportunities to attend meetings, trials and conferences in the UK and overseas. Trainees will research areas of law, prepare basic letters of claim, draft proceedings for low-value cases, prepare bundles for court and attend client

Insolvency and restructuring

Restructuring and insolvency lawyers act for insolvency practitioners and are brought in when companies face financial distress. How each case is approached depends on the failing company’s finances and the attitude of its creditors and stakeholders. That might mean a company’s debts being re-profiled, with the creditors taking equity in exchange for writing down what they are owed. Often, not all the company’s stakeholders consent to the restructuring proposals, leading to a formal restructuring or insolvency process taking months or years. It can be interesting and constantly challenging to learn about different industries and the issues that affect them, with work ranging from banking and retail sectors to pharmaceuticals. Restructuring law is complex and much of the work is transactional, so hours can be long and anti-social, especially when a company is in urgent financial distress or you are working across international time zones. Trainees might review and report on finance documents, prepare corporate structure charts and draft insolvency forms, and help industry focus groups to research trends.

Insurance and reinsurance

Insurance law involves the transferring of risk from the policyholder to the insurer (and possibly then on to reinsurers) through contracts. Contentious work is where parties disagree about whether a policy should pay out, or a policyholder alleges that their broker was negligent. Non-contentious work involves advising insurers on new insurance products and compliance with regulatory requirements, or advising consumers on what they need to do under a contract. As a trainee, non-contentious work requires analysing contracts and FCA rulebooks, drafting documents and advice notes, while contentious work requires trainees to help correspond with other parties and meet court and arbitral deadlines. Non-contentious advice on, for example, designing a new insurance product, can generally be planned for in advance, which makes a work/life balance more manageable than in other areas of law. For responses to regulatory requirements or major events, such as fires and floods, work can be time-critical and may require working late.

Islamic finance

Islamic finance is a fast-growing area of law focused on ensuring that transactions, banking and instructions are compliant with Shari'a – the body of jurisprudence derived from the Qur’an and secondary sources known as the ‘Hadith’. Although Shari'a jurisprudence has some similarities with English common law, it is not linked specifically to a territory or embedded in a state. Sharia law recommends a way of life and resides within the individual Muslim – he or she is expected to observe that legal framework wherever he or she lives in the world, whether that individual is seeking a mortgage to buy a house or needing finance to grow their company or increase their property portfolio.

Media law

Media law is a very broad church and covers broadcasting, publishing, music, film, television, digital media, advertising and marketing. Solicitors work on many matters at any one time and will get involved in contentious work, such as litigation around copyright disputes, libel or defamation issues. Litigation teams usually include three to five lawyers: a partner; senior associate; associate; and trainee or paralegal. Lawyers juggle contentious work with non-contentious matters: such as drafting and advising on contracts, talent agreements and advertising agency agreements; and providing ‘clearance’ advice for a client who wants to know if they can use, say, a particular image or a music track.

Oil and gas

Oil and gas clients include international oil companies (IOCs), national oil companies (NOCs), trading houses, financial institutions and banks, construction companies, authorities and host governments. Work includes: mergers and acquisitions (M&A) relating to oil and gas assets; the financing and development of oil and/or gas projects, and high-profile disputes between key players in the oil and gas space. The oil and gas industry is a global business involving people from a diverse range of cultures working together across jurisdictions. You may visit clients or attend negotiation meetings worldwide – Europe, Africa, Asia, the Middle East and South America – wherever it is convenient for the relevant parties to meet. One of the best parts of being an oil and gas solicitor is working on strategically important and newsworthy projects and transactions. Sector-specific commercial knowledge is key. Trainees could be conducting due diligence, drafting and researching, attending negotiation meetings with clients, as well as undertaking conditions precedent tasks; these are the various documents and formalities that need to be satisfied before a transaction can close.

Private equity

Private equity means investment in securities in companies that are not listed on any public stock exchange – generally in the UK this means investments by private equity firms in privately owned businesses. Transactions move quickly, often because they are run via an auction process where multiple private equity firms are competing to be the successful investor. Once the chosen bidder has been selected, all the parties will want to move quickly so that the management team of the target business can return to focusing on running their business. All-nighters can happen right at the end of the deal, but these are exceptions rather than the rule. Private equity work is driven by client demands and the transaction timetable, so weekend work is sometimes necessary. Trainees on the side acting for private equity firms selling will typically assist with putting confidentiality agreements in place with interested bidders and helping to prepare the data room, while those acting for the private equity firm seeking to invest might be involved in undertaking due diligence on the target business. Trainees liaise regularly with executives at private equity houses, founders and/or management teams or members of the corporate finance team responsible for delivering the overall transaction.

Shipping

Shipping solicitors are involved in every aspect of shipping and international trade: the construction of vessels, the disputes that arise during trading, through to the point at which they are recycled at the end of their working lives. In the shipping industry there will always be disputes over the interpretation of clauses in contracts, damage to cargoes and, unfortunately, casualties. Solicitors are often involved in the very early stages of disputes, when the events that will ultimately give rise to a claim are still unfolding. English law has for many years been the preferred choice for contracts in the global shipping industry, even where there is no direct connection with the UK. The cases invariably have an international element and regularly involve acting alongside lawyers from other jurisdictions. The vast majority of clients are based overseas, necessitating international travel. Shipping firms can also offer overseas secondments. Shipping solicitors are able to maintain a relatively good work/life balance. Preparing for hearings or dealing with serious incidents, especially real-time situations in different time zones, can involve working long and unsociable hours. However, these are the exception rather than the norm.

Tax

A firm’s tax dispute team handles contentious tax matters in both civil and criminal cases. On the civil side, cases can be appeals to the specialist tax tribunals and the higher courts arising from disputed HMRC decisions. Criminal cases involve handling criminal investigations by HMRC, such as dawn raids, arrests, production orders, interviews under caution and Crown Court trials. Common clients include large corporations, retail and entertainment companies, high-net-worth individuals, accountants, football clubs and footballers. Tax disputes lawyers tend to be very mobile, attending court, visiting client offices and attending events with colleagues, clients and counsel. There are also opportunities to travel within the UK and Europe, depending on where a client is based and if a case involves cross-border tax disputes, including occasional helicopter and private jet journeys to attend dawn raids and client meetings. As this area of law is always developing and changing, it provides a lot of variety for trainees – from the facts of the case to the daily tasks they are involved in. These tasks can include attending client meetings and conference calls, drafting correspondence, drafting lists of documents, taking instructions from clients and liaising with counsel.