Business & Corporate Law

Both types of activities require a certain core of knowledge and skills. Some knowledge and skills are client-oriented. All attorneys who assist business people must have a good idea of their clients’ goals. They must understand how their clients make money (or hope to), what risks their businesses face, and how the attorney can assist in the businesses’ success. To a degree, attorneys must understand the language and mindset of their clients.

Some knowledge and skills are law-related. All attorneys who assist business people must know how businesses can best be organized under the law. Clients will want to minimize costs, avoid legal pitfalls, and work as efficiently as possible. They will need their property and contract rights respected and their employees motivated and engaged. To succeed, a business lawyer must help the client avoid disputes, create value in relationships with other people and businesses, and be compliant with the law. Even lawyers primarily engaged in dispute resolution must see and recommend steps to avoid disputes in the future.

Employment requiring such expertise is available to graduates at any level of experience. Business litigation and other forms of dispute resolution have always required the attention of junior attorneys gaining experience, as well as senior lawyers directing the course of litigation or alternative dispute resolution.

Transactional work likewise requires lawyers. At a time in the distant past, the path for a transactional attorney typically led to a mid-size or large law firm, and potentially from there to an in-house position. But businesses have found more ways to train and use younger attorneys, and many now hire directly from law schools. Some businesses prefer to work with smaller firms as well. Regulators also hire junior attorneys. Though some agencies hope to hire lawyers with a few years of experience, many ways exist to enter government service just out of law school.

From success at the first job, opportunities generally increase. Attorneys may work for the government and then enter private practice, but they might also move from private practice to government service, or from litigation to planning, or vice versa.

After reviewing the core competencies beneficial to all business and corporate practice areas, the following sections review the various forms a lawyer’s business practice may take.

Core Business & Corporate Law Competency and How the Accompanying Pathways are Organized

Business law practice varies substantially, even among those who call themselves “corporate lawyers,” because the practice has become increasingly specialized and because the kind of work business lawyers perform changes with the needs of their clients. For that reason, it is difficult to provide definitive, one-size-fits-all guidance about what courses law students should take beyond the core courses.

Accordingly, rather than a single pathway for business and corporate law, you will see three variations—the commercial, corporate, and finance pathways—reflecting some of the variability found in business law practice. In addition, some business lawyers also may see themselves as environmental, intellectual property, international, labor and employment, oil and gas, real estate, or tax lawyers. Students with an interest in any of those areas of practice also should consult those stand-alone, discrete career subject overviews and pathways.

Lawyers practicing in any business-related area, whether it be commercial, corporate, tax, business litigation, or the like, all need to acquire a common core of knowledge and skills. In the accompanying Business & Corporate Law Pathways, Stage 1 is foundational for all of the alternative pathways. It includes courses teaching core knowledge for any lawyer who intends to represent business clients.

Of course, knowing something about all of the subjects covered in the required law school curriculum is beneficial for business lawyers, but among the basic required courses Contracts I and II are especially important.

The law of contracts is our society’s legal framework for protecting the expectations produced from agreements for the exchange of various types of performance—conveying tangible or intangible property, providing services, and paying money—so almost every kind of business transaction implicates contract law. Thus, all business lawyers are essentially “contract” lawyers, so Contracts I and II therefore may be regarded as the entry-level courses for the business law curriculum.

Federal Income Taxation, another required course, appears in Stage 1 as well. Tax issues affect nearly all areas of law practice, including family law and litigation, and they certainly affect business transactions.

Stage 1 also includes the basic business organizations courses—Agency & Partnership and Corporations—and the basic commercial law courses—Payment Systems and Secured Transactions.

These four courses provide a broad understanding of the legal regime within which most commercial activity is conducted in the United States, including how goods and services are paid for, the financing of transactions, the rules governing how to organize and operate business entities, and the rules establishing the duties and responsibilities of business entities and their officials and determining how they may be held accountable.

In addition, these courses indirectly introduce students to some of the basic accounting, finance, and economics principles with which business lawyers should be familiar. These courses also expose students to practical and business considerations that parties to business transactions often must take into account. For these reasons, all four courses are extremely valuable for all law students, even those who do not intend to be a general business or corporate lawyer.

Stage 2 sets out the courses that are highly relevant for the specific business-oriented pathway. These courses tend to be foundational for the area of practice, but not all of them are. Students planning a transactional practice should take a basic contract drafting course—either Contract Building Blocks or Contract Negotiations & Drafting (but not both)—late in their second year or early in their third year of law study. Students then should take one of the capstone Transactional Skills courses (Corporate, Energy, International Business, or Real Estate) in their third year (or fourth year, for part-time students).

Students who plan to become bankruptcy practitioners should take Business Bankruptcy or Consumer Bankruptcy & Debt Collection or perhaps both. Additionally, through South Texas College of Law Houston’s Judicial Process Clinic/Academic Internship, students can seek to arrange an internship within a bankruptcy court.

Every business lawyer, however, should know something about how a bankruptcy process works. A client’s supplier, customer, borrower, lender, landlord, or tenant may be contemplating bankruptcy; or the client itself may need to consider whether bankruptcy provides the appropriate forum for solving its own business problems. Therefore, students planning any kind of business law practice should consider taking a bankruptcy law course. For most contemplating a business-oriented practice, it should be Business Bankruptcy.

Most Stage 3 courses (excluding the capstone Transactional Skills courses) could be considered concurrently with Stage 2 courses. These courses tend not to be core subjects for the particular area of law practice, but they could be relevant to it. For example, International Business Transactions will range from being an essential consideration for some lawyers to being only a minor one for others, depending upon one’s practice.

Transactional and Planning Practice

Assisting clients with transactional planning is a broad label for a whole host of different, specialized law practices. Perhaps most commonly, a lawyer will assist a client with negotiating and documenting deals. The transactional attorney helps to plan and orchestrate transactions so that disputes do not arise.

Transactions may include filing a business’s taxes, the sale of a business or a product line, the financing of a large expansion or of a real estate development, and the complex risk-allocating contracts traded in the derivatives markets. Each of these transactions can generate a paper trail several inches thick, all drafted and reviewed by several attorneys. As these examples suggest, several aspects of business in the United States require a wide range of legal knowledge and skills.

The Transactional Law Practice Certificate Program is designed for STCL Houston students who are interested in pursuing legal careers representing clients in planning, negotiating, structuring, and documenting business transactions. It provides law students with a strong background in basic business law concepts an opportunity for in-depth study of advanced business and business-related legal doctrine and practice, and intensive practice-oriented instruction focusing on the skills essential for transactional law practice.

Any student interested in having a business planning and transactional practice should consider applying to participate in the Certificate Program after they have completed 30 credit hours and before they have completed 45 credit hours. A detailed description of the Certificate Program appears in the Student Handbook.

(Somewhat) Discrete Types of Business Practice

The practice of “business” and “corporate” law can mean very different things to different people. In many ways, the divisions separating business-centered practice groups within law firms are somewhat artificial. It therefore can be hard to categorize discrete areas of practice for informational purposes. That being said, what follows are three general subsets of business and corporate law. Each has an accompanying pathway.

Corporate

Each corporation, limited-liability company, or partnership is a legal entity separate from its owners and managers, at least for most purposes. Each of these entities operates according to separate rules. Attorneys help create these legal entities; they arrange the structure of businesses and the terms that govern those entities to business people’s greatest advantage. Corporate attorneys also advise businesses of the rights and obligations of owners and managers. Down the road, if a business entity chooses to merge with or acquire another entity (or to dissolve entirely), corporate attorneys assist in this process as well.

Some large law firms specialize in deals involving multinational, public companies, often in heavily regulated industries, many of which are subject to extensive federal securities regulation. For students wishing to specialize in such deals, Securities Regulation is a particularly important course.

Other firms primarily represent private or family-owned businesses for which tax or estate planning issues often will be more important than securities or other regulatory law. Moreover, corporations themselves often have in-house legal departments with practices involving transactional work as well as a variety of more general business law questions, including commercial, tax, employment, and intellectual property law.

Commercial

Once business entities have been created, they may engage in a multitude of various commercial deals. These entities rely on transactional attorneys to facilitate these deals. Negotiating and drafting contracts is the work of tens of thousands of attorneys in the United States.

Most transactions are documented in form contracts, but someone must draft the forms. Moreover, a client may consult a lawyer for advice in negotiating variations in the terms set out in a form contract. When no form is available—either because the transaction is unique or highly specialized—an attorney must craft an agreement that memorializes the parties’ agreement and anticipates and resolves potential problems in advance. This creative act requires knowledge of the client’s business and the terms of the deal, along with a good bit of wisdom in foreseeing problems that might arise and how they might be resolved. It also requires drafting skills so that the parties will understand the solutions set forth in the contract and a court will enforce them. Attorneys add value to a transaction with careful drafting.

Most of these transactions involve an exchange of money for property or services. All businesses tend to have property—land on which a plant is located, land developed for sale to others, leased office space, a trademark or trade secret, a copyright or patent, oil or other mineral rights, rights to use energy, and even inventory held for sale to others.

Different rules govern the protection and exchange of property used and sold by different types of businesses, and the transactional attorney helps set the rules for the exchange. For example, an attorney might renew the office lease, create a form contract for purchases of land developed for resale to residential builders, or license a copyright or patent. Being able to protect and sell the property or services of a business is a commercial attorney’s core skill.

Finance

Much of business law practice—whether focused on commercial or corporate (or real estate transactions, specifically)—is significantly driven by financing because many business transactions are accomplished using other people’s money. Lawyers help to guide and complete most efforts of a business to raise money, whether as a loan from a bank or as equity from a venture capital fund, a group of large investors, or the public.

An essential feature of these transactions is the drafting of written agreements that spell out the parties’ performance obligations and that allocate risks among the parties.

Moreover, great liability hangs on whether disclosures are made accurately and completely and whether contracts are drafted optimally. It is therefore very helpful to know about the law governing debtor-creditor relationships, both in the ordinary course of business dealings and in the event of business failure.

Additional Subjects that Intersect with Business and Corporate Law

Many areas of study cut across the practice of business and corporate law. For example, attorneys may practice “commercial” law but focus their practice on intellectual property. In this way, it really does not matter whether such attorneys refer to themselves as commercial lawyers or intellectual property lawyers. For career planning purposes, all that should matter to students is what knowledge and skills to acquire to practice commercial law in the intellectual property space.

The following summarizes some of the central legal fields that cut across the practice of business and corporate law to provide students with a sense of the main types of commercial dealings and business planning considerations that often take place under the umbrella of business and corporate law. Note that these subjects are discussed elsewhere in greater depth.

Tax

Taxation affects nearly all aspects of law practice. Most transactions are taxable. Determining whether and to what extent they are, and how they might be structured to minimize tax liability, is the task of a tax lawyer. The fact that nearly every transaction changes the tax liabilities of the parties means that tax advice is necessary almost whenever lawyers are involved.

Often deals are sent to tax counsel for approval beforehand, and occasionally a transaction involves a novel structure or facts that may send the tax lawyer to the IRS for advice. But the business and corporate lawyer who is not primarily charged with responsibility for rendering a tax opinion must be able to communicate with and respond to the recommendations of tax counsel. At a minimum, tax literacy is an important attribute for every business lawyer.

Students interested in a primarily tax-oriented practice should consult the separate Tax Law Subject Overview and Pathway for more detailed information.

Environmental

Environmental law also has permeated many aspects of business practice. Manufacturing, real estate development, and the purchase and sale of businesses all require some knowledge of environmental law. Hiring a lawyer to set parameters or resolve concerns about air and water quality, wetlands, or prior contamination of land or water is an important step in planning large transactions. Even renovating an old building may require a lawyer’s advice.

The Environmental Law Subject Overview and Pathway provides more specific recommendations for those who expect environmental law to be the main focus of their practice.

Oil & Gas

The potential types of work in which an oil and gas transactional attorney may be involved encompass many of the categories reviewed in this subject overview, such as commercial, corporate, and finance. In this context, however, these particular types of practice are based on oil and gas transactions.

For example, transactions could involve the purchase, sale, or leasing of mineral real property, development rights, or equipment; the merger of two companies or acquisition of one by the other; joint ventures and joint operating agreements between energy companies; land leases; or agreements that concern pipeline and facilities usage and sharing.

The Energy Law Subject Overview and Pathway provides additional information for students who plan to pursue a career in the field of oil and gas law.

Real Estate

Property law issues regularly surface in business dealings. Business entities may purchase, lease, develop, or sell real estate. Attorneys assist clients through each of these processes, along with any land use issues that accompany these transactions. When necessary, lawyers help facilitate the financing of these real estate transactions. Some business attorneys focus predominantly on real estate or land use law, while others have a more general business practice that includes property law issues when they emerge.

The Real Property & Real Estate Law Subject Overview and Pathway provides more detailed information for those who plan to focus on real estate and land use law.

Intellectual Property

In the distant past, the bulk of the value in the American economy lay in the land and the agricultural products that grew out of it. Later, after the industrial revolution, value shifted to manufacturing plants that made useful and valuable things from natural resources. Now, much of the value in the economy is in the knowledge and processes by which useful things are made. Creativity and discovery have lasting, real value. Creative works are protected by copyright, discoveries by patents, and intangible value in marks and processes by trademark and trade secret laws.

Protection and licensing of the value of such property is the job of the intellectual property attorney. Many businesses rely on intellectual property lawyers’ advice and skill. Some lawyers specialize in advising clients how to protect and to transfer intellectual property interests, while others represent clients in resolving disputes concerning rights in intellectual property.

The Intellectual Property Law Subject Overview and Pathway contains specific recommendations for students planning an intellectual property practice.

Labor & Employment

Business entities are fictional creations of law. They act at all only through agents and employees. Defining the relationship between the entity and its agents and employees is the job of the employment lawyer. Such an attorney might handle employment agreements, employee handbook issues, employee benefits, collective bargaining and collective bargaining agreements, and confidentiality and intellectual property agreements with employees.

A lawyer counseling a business organization would also be aided by becoming acquainted with employee rights to compensation and benefits under employment laws or benefit plans, rights against discrimination, and rights against retaliation on the basis of whistle-blowing or other protected conduct. Lawyers assisting in an organization’s investigation of its employees should be familiar with various laws affecting the monitoring of employee activity, interrogation of employees, and testing of employees.

The separate Labor & Employment Law Subject Overview and Pathway explains the various alternatives for students interested in a law practice concentrating on employer-employee relations.

International

Business has become increasingly globalized, so business law practice has as well. All business lawyers must be prepared to deal with clients’ international needs.

It is tempting to believe that knowledge of international business law is important only for lawyers in big firms representing multinational corporations, but any lawyer having a business-oriented practice may encounter international law issues from time to time, and some business lawyers deal with them routinely. For example, a lawyer in Lufkin, Texas with a client who does business primarily in Mexico will need to be knowledgeable about the law governing international business and trade.

Transactional lawyers versed in international law and norms can provide great value to clients. Lawyers may find themselves in many instances working with lawyers in another country to resolve issues before a transaction is complete or a dispute is resolved. In either case, knowledge of applicable international laws and norms is necessary, as well as knowledge of how business is done in that country. Some business and corporate lawyers seldom represent clients in transactions having an international dimension, while others do little else.

Students will find much helpful information about how to plan for an international business practice in the International Law & International Economic Law Subject Overview and Pathways.

Resolving Business Disputes

Types of Disputes

A couple of decades ago, one could assume that a lawyer primarily involved in business dispute resolution was a litigator. Full-time business litigators are still numerous, particularly in larger legal markets. They practice in large firms and small, with others and alone. They may work primarily for a large company or for smaller firms. They may do primarily plaintiff work or primarily defense or a mix of both.

General Civil Disputes and Bankruptcy

Business disputes can take many different forms. They may concern breach of contract or lease, fraud, business torts, employment, intellectual property, taxation, or anything else involving a legal right valuable to a business. The types of disputes an attorney handles in practice are very much the product of chosen areas of specialty and the needs of the attorney’s particular clients.

There are special courts that solely resolve bankruptcy matters, and some attorneys choose to specialize exclusively or predominantly in bankruptcy. Any kind of business can go into bankruptcy, and bankruptcy litigation can involve any kind of issue—property, contract, tort, or crime. It is truly the broadest of business litigation practices.

In bankruptcy, a business’s property, contracts, and products are protected by the court while the business’s creditors work together, with the court, and with the business’s managers to settle the business’s debts and, if the business looks like it may well succeed, reorganize the business into a form in which it may emerge out of bankruptcy with hope for that success. Some businesses file bankruptcy strategically as a way to reorganize into a more streamlined form.

Although bankruptcy is discussed here under the rubric of dispute resolution, an understanding of bankruptcy law is also useful for transactional attorneys. Transactional attorneys need to anticipate the possibility of bankruptcy when crafting agreements.

Students interested in bankruptcy law should consider taking Consumer Bankruptcy & Debt Collection and, more importantly, the Business Bankruptcy course. Additionally, through STCL Houston’s Judicial Process Clinic/Academic Internship, students can seek to arrange an internship within a bankruptcy court.

Criminal Violations

Both business people and the business entities they manage can become defendants in a criminal action. Federal and state crimes chargeable in a business context include fraud in all its varieties (e.g., plain vanilla fraud, wire and mail fraud, securities fraud, and insider trading), theft of services, theft of intellectual property, money laundering, tax evasion, environmental violations, and many others.

Most of the knowledge and skills required of business litigators are also required of those who prosecute and defend business people, businesses, and those who commit crimes against them. The Corporate & White Collar Crime course reviews many of the most common criminal violations in this space.

International Disputes

Business is often international in scope. A business of such size will often have products made in another country or sell to customers in other countries. Therefore, all kinds of dispute resolution can occur internationally.

Claims might be litigated in foreign courts or tribunals. Arbitration or mediation may take place overseas. International administrative bodies, either in the United States or another country, may control aspects of a client’s business. And criminal jurisdiction sometimes reaches across international borders. A lawyer for an American business is often an internationalist even when he or she is engaged in dispute resolution.

Methods and Forums for Resolving Disputes

As mentioned above, business lawyers involved in a dispute resolution practice used to be almost exclusively litigators. Many of them still are. Businesses still resort to civil litigation when parties fail to perform their agreements or when they perform defectively, so lawyers engaged in a business-related litigation practice must know something about basic business concepts (accounting, finance, and economics), appreciate the nature of various business transactions, and know about a wide range of business law subjects.

But because they also are litigators, they must have a mastery of the law of evidence and civil procedure and must develop a set of skills peculiar to trial practice, which includes drafting of pleadings, motions, and other judicial filings; conducting discovery (both written discovery and taking depositions); selecting a jury; making opening and closing statements; examining and cross-examining of witnesses; and the like.

Further, because most cases filed never reach a trial, business litigators also must be skilled in negotiation and settlement.

Lawyers involved in business disputes do not always seek a court’s help. As courts have endorsed the use of mediation to settle business disputes and have rigorously enforced arbitration provisions in private agreements, businesses have responded by sending disputes to mediation and including arbitration provisions in most contracts, even in employment contracts. Most business disputes are settled rather than tried. Often, business disputes are mediated and a settlement reached. Even when a complaint is filed in court, litigation usually waits while a mediator or arbitrator hears the dispute.

The shift toward mediation and arbitration has changed much of the way business disputes are resolved. In arbitration, the activity still mirrors litigation to a degree: lawyers establish the facts by a method of investigation and discovery, and then submit evidence and argument to an arbitrator.

But because an arbitrator is not a government actor, the arbitrator often allows lawyers from any state to argue before him or her. Businesses with a great deal of dispute resolution work can therefore send in-house counsel to arbitration, saving time and expense. Much of the routine dispute resolution in certain industries has therefore moved in-house. Of course, some disputes will always be litigated, and large arbitrations often require the assistance of outside counsel.

The shift toward mediation, on the other hand, requires lawyers to develop different problem-solving skills. Unlike judges or arbitrators, mediators are not decision-makers; they are communications facilitators. Although business lawyers who represent clients in mediation will still need to apply their advocacy skills to further their clients’ interests, they will also need to have negotiation and problem-solving skills to reach an agreement that satisfies all parties to a dispute.

Students interested in a business-oriented litigation practice also should review the Civil Litigation & ADR Subject Overview. The Civil Litigation & ADR Pathway will provide coursework recommendations that supplement the pathways accompanying this subject overview.

A growing number of lawyers who serve businesses practice before administrative bodies of various kinds. For example, lawyers representing hospitals assist peer review boards, lawyers for power companies appear before energy regulators, securities lawyers represent clients at the Securities and Exchange Commission, and attorneys for music distributors appear before the Copyright Royalty Board. Workers compensation obligations, labor disputes, environmental law violations, and land use regulations can all bring a lawyer before an administrative tribunal.

The reality today is that some businesses work so closely with government that a lawyer can make a career resolving disputes and practice entirely before administrative bodies. For students interested in pursuing such careers, Administrative Law is a particularly important course.

Careers at Administrative Agencies

Many lawyers work on the inside of administrative bodies. The Securities and Exchange Commission, the Federal Trade Commission, the Environmental Protection Agency, the Internal Revenue Service, and numerous other administrative agencies are staffed with attorneys who regulate those who manage businesses. Sometimes these attorneys instigate enforcement actions, but often they are involved at the planning stage of transactions, guiding lawyers who wish to keep their clients out of trouble.

Through South Texas College of Law Houston’s Government Process Clinic/Academic Internship, students can seek to arrange an internship at a local, state, or federal government agency. Note that such field placements can also be quite beneficial for students who do not ultimately choose to work for a government agency.