Business law may also be called commercial law or mercantile law. Whatever you call it, it is designed to assist with business dealings between individuals and companies. It is a massive area of the law, with a lot of room for specialization and growth.
There are two primary sections of the law that you will deal with:
- The regulations regarding commercial entities: There is a lot of red tape when it comes to registering and maintaining a business. This area is where you will deal with setting up a partnership or LLC. You might also be called on to apply for bankruptcy.
- Contract law as it relates to commercial transactions: Here, we deal with the contracts themselves. It could be the drawing up of a contract or the enforcement of one. You might also be called on in cases where a contract has been breached.
Either way, these laws have centuries of history behind them. Whenever people have engaged in commercial enterprises, there has been a need to have a presiding set of rules to govern those transactions.
In ancient Egypt, for example, people were governed by the laws of Maat. Maat was the goddess of fairness and justice, and people were expected to conduct their business fairly. Still, we've seen records from that time where someone did break their contract.
So, even back then, people might have broken their contracts. As a commercial lawyer, though, you're more likely to ensure that legal issues do not arise. You might also be called upon to settle disputes.
The Formation of Businesses
Unless you're a lawyer, understanding the regulations for setting up businesses in the United States can be difficult. As a business lawyer, you will need to be able to advise clients on the following.
The Best Type of Business to Start
By that, we mean whether they should register a partnership, LLC, and so on. There are different legal implications for each format that you will have to explain.
For example, a sole proprietorship is not considered a separate legal entity. It is one of the most straightforward business formats to set up, but it provides no legal separation between the business and the owner. Or, in other words, the owner is responsible for all debts the business incurs.
A partnership, on the other hand, provides a limited amount of protection for the individual. That said, partners can usually be sued for the debts of the business jointly and severally. One of your jobs will be to advise your clients about choosing their business partner carefully.
An LLC provides a lot more separation between the business and the owner. There are, however, different reporting and filing requirements.
You will also need a good understanding of both state and federal laws related to conducting business. It is also going to be essential to understand city bylaws. Does the business require a permit to operate? Are they allowed to run a business from a garage?
As you can see from the above, there's a lot more about registering a business than understanding what documents to complete.
The Paperwork They Need to Complete
You will have to file paperwork to register the business. You must ensure that the right forms are completed correctly. The business may also have to provide supporting documents. It will be your job to help them complete the documents and file the application for registration.
You will also need to advise them on the legal requirements going forward. Will they need to register for tax purposes? What returns, if any, are they expected to file?
You will need to understand what the requirements are in terms of state and federal statutes.
You might also be required to set up partnership contracts regarding the formation of the new entity.
Most businesses will need to hire employees. They might also need to let them go at some stage. This process can be tricky if you're not following the right steps. Companies need to get the right legal advice in this regard.
You could choose to specialize in employment law if you prefer. This area would put you in a position to deal with hires, firings, and the day-to-day legal requirements of dealing with employees. You would need to advise employers of their rights and responsibilities as an employer.
How much should they pay their staff? What deductions must they put in place? What are the best practices for managing the staff fairly?
You would no doubt be called on to set up:
- Employment contracts
- Dismissal warnings
- Staff policies
- And much more
At times, you might also be called upon to help with disputes between management and staff. You could be called upon as an adjudicator in disputes, or to run a formal hearing. There are many aspects to this interesting subsection of commercial law.
Technically, immigration and business law are two separate areas. That said, they also intersect regularly. Here are some examples:
Perhaps a company would like to bring in an internationally-based employee to work in the States.
It could be a company that has employed illegal immigrants and wants to bring these employees in legally.
Companies may want to bring in employees temporarily.
Immigration law can be a challenging field to cover. Businesses often require a specially trained expert in this field. There are many different reasons why business and immigration law might intersect.
The Selling of Products
Offering products to sell can be a legal quagmire. Companies are subject to strict regulations on what products they can make, what goes into them, and how they sell them. As a commercial lawyer, you will be required to deal with issues such as:
- Working conditions of employees
- Price controls
- Regulations in terms of emissions and pollution
- Potential lawsuits related to breach of sales or a faulty product
For businesses today, several agreements will be entered into. With sales you need to have:
- Supplier agreements
- Credit agreements
- Wholesale agreements
- Bulk sales
- And so on
Not adhering to the laws in this instance could prove disastrous. Just look at any of the big class-action suits brought against companies over the years. The one making the news at the moment is the opioid scandal.
Companies like Purdue Pharma are facing massive lawsuits. It has been discovered that the company not only knew that OxyContin was addictive but actively hid that fact from the medical profession. As a result, they're now coming under fire for causing the opioid crises that we're currently facing.
As a commercial lawyer, your job would have been to advise that their actions were potentially illegal. If they hadn't consulted you in the first place, your job now would be damage control. You would be expected to help reach an equable settlement between the company and those suing them.
Contract Creation and Negotiation
In business, a rock-solid contract with no wriggle room can be a precious asset. That's why contract lawyers are usually in such high demand.
You might be required to draw up the following contracts:
- Employment contracts
- Agreements with suppliers
- Agreements with vendors selling your products
- Credit agreements
- And a lot more besides
Contract law is based on both established legal regulations and common law. This background makes it both exciting and complex. Common law is not necessarily enacted formally. It is derived from the principles that the courts have developed over time.
With this subsection of commercial law, it is essential to have a thorough understanding of both common and commercial law. You will also need a more nuanced understanding of how to enforce a contract.
It might require some shrewd negotiations on your part as well. You will need to be able to bring both parties to an agreement. You will also need to be able to complete a contract based on the wishes of your clients.
Owning a business monopoly is highly attractive to businesses. After all, the more of the market you control, the better the profit margins are. In terms of the law, though, practices that stifle the growth and expansion of other entrants to the market could be problematic.
Companies will often consult attorneys to ensure that they do not fall foul of anti-trust regulations. Lawyers here will have to understand what constitutes unfair practices and advise clients against these.
You might also be called on to represent a client who has been accused of contravening anti-trust regulations. You might have to work out what, if any, extenuating circumstances there were. If necessary, you will also need to negotiate a reduced sentence for offenders.
The issue of intellectual property can be a contentious one. It is also difficult to navigate the laws here. It is a complicated process, especially if your client is registering a patent on a device they've developed.
That said, it is essential for companies these days to protect their intellectual property. If they do not, they could very well find that some other company copies their design. The company doing the copying doesn't have to spend time or money on development.
They could thus sell the legitimate company's product for a lot less. As an intellectual property lawyer, you would help your clients register their copyrights. You would also be called on to enforce those rights if someone else is infringing on them.
Tax is a complicated subject, as well. That's why companies are more than willing to pay an expert to handle these matters for them. As a tax lawyer, you would need to advise clients of their rights and responsibilities in terms of taxes.
You would need to advise them of:
- Legal deductions that they can claim
- Filing requirements
- Legal ways to reduce their tax burden
You might also be called on to represent them in negotiations with the IRS. Or you may be able to apply for a special payment arrangement or waivers on their behalf.
There are times when businesses work out well. Unfortunately, as a business lawyer, you will also need to assist clients with the wrapping up of their businesses. As a bankruptcy lawyer, you will need to assess whether or not that's the best option for them.
You will also need to ensure that everything is in order before the filing commences. And, contrary to popular belief, there's not just one type of way to file for bankruptcy in business. You will need to ensure that your client chooses the right option in this regard.
It will also be necessary to ensure that they understand the implications of each option. They'll need to look at the pros and cons and make a decision from there. Once they've chosen their path of action, you will need to ensure that everything is filed correctly.
You might also be called on to ensure that they stay compliant during the process. It might also be part of your purview to negotiate with the creditors on behalf of the company.
Why Would You Want to Be a Business Lawyer?
Nine times out of ten, your work will be in the boardroom rather than the courtroom. If you're not keen on spending time in court, this could be the option for you. You could always refer the client to a litigator if you want to stay out of court altogether.
Aside from a few hearings and settlement conferences, most business will be conducted in offices.
Typically, business lawyers do not have to worry about being put under pressure in court. You're also not responsible for defending clients against serious complaints.
What you do need, however, is a keen eye for detail. It is always crucial for legal documents to be perfect, but it is especially important here. If you're creating a contract, it must be watertight. If you're filing on behalf of the company, everything must be entirely in order.
If you're a very exacting person, and able to negotiate well, this could be the ideal field for you.
Do I Work at a Company or Law Firm?
Both options are valid ones. Many large businesses require in-house counsel to protect their interests. The benefits of working for a single company is that you get to know your job perfectly. If you're dealing with the same kinds of matters over time, you will get quite good at them.
On the downside, it could get boring over time. You would also generally have to rely on your knowledge and judgment. You might have a small team at your disposal, but it is not the same as working at a law firm.
Joining a law firm can also be an excellent way to go. You get the advantage of being able to work with different clients from different firms. This means that you will get some varied tasks as well. You also have the advantage of having colleagues to discuss cases with.
Another option is to run your own firm. Here you will deal with companies that can't afford or do not need an in-house council. It is interesting to run your own practice, and the work will be varied.
Specialization or General Business?
There's a lot to be said about specializing in one field here. If you act as a general business lawyer, you will have access to a broader range of opportunities. That said, you will also have to stay current on a lot more regulations.
As a specialist, you will have access to fewer cases. The upside, though, is that you will be able to establish yourself as an expert. You could charge higher fees. Is also a pro that you won't need to keep current on so many different aspects of business law.
Say, for example, that you decide to specialize in tax law. You would need to check any changes in tax regulations for the current year. You won't have to worry about anti-trust or immigration law, though. With a more specialized practice, you would have to choose the right business location. If you do, though, you could still get more than enough business to keep going.
Specialization can be more than about how much money you can make. Perhaps you're interested in assisting new businesses to get a start. You can focus on that area alone. It can be quite rewarding to help new business ventures get the right start.
Being a business lawyer can be a rewarding profession. Whether you choose to specialize in one particular area or not, you're bound to come across compelling cases. Being a business lawyer could be right if you're not interested in spending time in court.
A lot of these cases are hammered out in the boardroom instead. The courtroom can be a high-pressure situation. It is not for everyone.
All good business lawyers need to be great at negotiations and good at checking details. This is one area where a lot of attention to detail will pay in spades. If you're a whizz at contract law, you will love being a business lawyer.