What is banking & finance law?
The work of banking lawyers centres around negotiating and creating the contractual relationship between lenders and borrowers.
Banking lawyers represent either the borrower or lender in a transaction.
Banking law (also referred to as 'Banking and Finance') is very broad and includes lots of sub-topics (i.e. 'classes of finance') so banking lawyers tend to specialise in one particular 'class of finance' (see below).
NB - Lenders aren't always banks!
The 'Classes of Finance'
Bank Lending - a personal or business loan.
Property Finance - a loan is created so the borrower can buy or develop property and/or land.
Project Finance - a loan is created so a borrower or group of borrowers can undertake an infrastructure project which will involve public services (i.e. building a road). The loan is repaid when the project brings in money.
Acquisition Finance - a loan is given to a company so it can buy another company.
Debt Capital Markets - a borrower is known as an 'issuer' and will raise money by selling debt obligations (i.e. bonds) to investors. The investor then owns the bond and will receive interest payments from the issuer until the bond 'matures' (at which point the issuer repays the initial value of the bond to the bondholder). The bond can also be sold to another investor at any time and the new owner will become the bondholder.
Islamic Finance - Sharia Law prevents the repayment and collection of interest on a loan so Islamic Finance Lawyers work with Muslim borrowers, lenders and investors to ensure their financial transactions comply with Sharia Law.
Financial Service Regulation - lawyers in this field ensure that their bank clients operate in compliance with financial legislation.
(If you're interested in a particular class of finance, have a look on your chosen law firm's website to see which class of finance they specialise in!)
Typical tasks of a Banking Lawyer...
Meeting clients (usually at the start of a deal) to discuss their needs.
Deciding on a contractual structure (known as a 'lending facility') to be used for the loan (typically determined by the duration of the loan and number of lenders).
Undertaking due diligence by reviewing documents and information provided by a borrower to verify the borrower's credit profile.
Negotiating the lending facility between the borrower and the lender.
Ensuring financial models being used comply with the law.
Preparing corporate approvals for the lending (such as board minutes and shareholder resolutions) - similar to corporate lawyers!
Post completion registrations with Companies House and other regulators as appropriate - similar to corporate lawyers!
Skills required to be a Banking Lawyer...
Great attention to detail.
A good understanding of different types of loans.
The ability to understand the ambitions and goals of your client and appreciate the risks and benefits of a deal.
Good personal skills to build relationships.
Ability to translate complex information into practical advice to a client.
Don't forget, you'll learn many of these skills during your training contract or through practical work experience so don't be put off if you feel like you do not have these skills yet!
Try and get involved in as many projects/tasks that will allow you to develop these skills as much as possible.