THE ROLE OF A CORPORATE LAWYER Editorial By Adv Simi Raj The role of a corporate lawyer may be extremely varied depending upon the needs of the client, the purpose or purposes for which the corporate lawyer is retained, the applicable circumstances, the expectations and needs of a client and the corporate lawyer’s personal views of the role and responsibility of the lawyer both as a general matter and as a corporate lawyer. The principal aspects of the role in general terms include advising the client, implementing the business objectives of the client, protecting the interests of the client, limiting risk to the client, providing general and transnational business advice, negotiating business and documentation issues, and drafting relevant documentation. These general statements regarding such a role are discussed in additional detail below. Advising the client. Advising a client will vary considerably depending upon the role or mandate of the lawyer and the nature of the client’s needs, but in the broadest sense includes providing views, suggestions, commentary and ideas regarding a matter or an issue. This may involve analyzing the risks, problems and strategy of achieving objectives, particularly the client’s objectives while limiting the level of risk to the client. The role may vary considerably depending upon the knowledge and skills possessed by the client. Thus, certain clients may require very little business advice regarding some or all issues and in structuring solutions to issues and problems, while others may require a great deal. The needs of a specific client may vary depending upon the client’s familiarity with a specific matter. For example, the client may be very familiar with certain types of matters and transactions and very inexperienced in others. Certain clients may have little awareness of the relevant legal issues, while others may be very familiar with some and unfamiliar with others; some may be very familiar with the legal issues relevant to that client. Thus, the extent and nature of the advice both requested and needed may be very different. This will influence the nature of advice the corporate lawyer should provide the client. At times, the corporate lawyer may act as much in the capacity of a business advisor as a lawyer. The corporate lawyer should focus on business issues that affect the client and bring relevant business developments and the lawyer’s previous experiences relating to client matters and issues to the client’s attention. In addition, as appropriate, the corporate lawyer advises the client regarding business questions raised by the client. The lawyer may also identify business opportunities or assist the client in developing or taking advantage of existing business opportunities or situations. For example, the lawyer may help the client find or establish a new customer relationship, find a supplier on favorable terms, or find financing through other clients or other legal and business dealings the lawyer has. Implementing Business Objectives. To implement the client’s business objectives, the lawyer must understand the client’s business, short and long term goals, financial position, and the importance of the issue or matter to the client in terms of financial, business strategy and other objectives. The lawyer should understand the client’s priorities in all these respects, what the client considers non-negotiable, and the degree to which the client may concede on a particular issue, which may be critical as part of the negotiation process, particularly in terms of the overall relationship of issues and objectives in a specific matter and even in connection with a series of related or even unrelated matters. The lawyer should also be able to recognize the difference between a business issue and a legal issue, since generally the client will not and often should not rely as much on the lawyer to be instrumental in the analysis or resolution of what are primarily business issues or decisions. The lawyer should be able to set out alternatives that will permit the client to achieve its goals while not compromising its priorities. The alternatives should be presented in terms of achieving a specific objective and also in terms of their relationship to achieving other objectives and issues on both a short-term and long-term basis. Protecting the Interests of the Client. Client interests will change with each client and each transaction. The client’s interests should always be the lawyer’s first priority. The lawyer must understand the client’s interests, which should be articulated by the client and may sometimes be supplemented by the views and experience of the corporate lawyer. The nature of such interests should be reviewed with the client on a continuing basis, since such interests may change substantially or at least in part from time to time. The corporate lawyer should always be sensitive to situations in which the interests of the contact person with whom the corporate lawyer deals on behalf of the client diverge with the interests of the client. Limiting Risk to the Client. The corporate lawyer must understand all the legal and business risks the client may face or which may arise in the course of a transaction or general representation of the client to properly assess, explain and limit such risks. The corporate lawyer’s role is to inform the client of all potential risks and permit the client to assess its willingness to assume each particular risk or the risks taken as a whole. In assessing risk, two basic aspects to be examined are (i) the likelihood of an event actually occurring and (ii) the potential impact of such an event on the client’s business. The lawyer and client typically work together closely in this area, assessing each risk and how it may be limited should it arise. The assessment will depend upon the specific facts in a particular situation and often upon industry practices and considerations influencing performance of a legal and/or business issue. The handling of risk first involves the assessment of risk. Assessment should be on both a quantitative and probability basis. Quantitative analysis involves development of a range of dollar exposures. The probability basis provides a percentage estimate of the probability of given results. The decision to assume specific risks should be made by the client after receiving the lawyer’s analysis. Risk tolerance may vary considerably from client to client. Business risks relating to legal developments may exist which may not be subject to quantification, but which may be judgmental in a quasi-business sense. Thus, risk analysis may be of a financial nature, based upon the client’s business position, or on business or general principles. Even after comprehensively evaluating risks for the client, the consequences of such analysis and related decisions can result in considerable uncertainty. Risk analysis is rarely subject to precise quantification. Risk analysis should be comprehensive and as thorough as possible to avoid the occurrence or effect of issues which may arise or be recognized belatedly, have not been addressed, or not satisfactorily addressed. The failure to recognize or the belated recognition of an issue will create a disadvantage for the client and often delay and complicate achievement of the client’s objectives. Negotiating Business and Documentation Issues. A lawyer’s approach to negotiation can have a profound impact upon a transaction. The attorney must determine whether it will be more productive to take a hostile or friendly approach or to be aggressive or conciliatory. Often this is determined by the relationships of the parties and/or the personality and negotiating techniques of the lawyer on the other side of the transaction. The lawyer must assess the importance of each issue to his client and determine which issues may be conceded and which may not. This may involve a careful balancing of priorities and tactics. It may be particularly useful to concede on secondary issues in order to prevail upon important issues. The amount of leverage the client has with the other party or its need for the transaction will often affect the lawyer’s approach to the negotiations. Drafting Relevant Documentation. The lawyer must assess what forms of documents and/or agreements must be prepared to properly document a transaction. A transaction may require multiple documents each of which sets forth a small segment of the entire transaction but without which the transaction would not be properly documented. There are often multiple ways in which a transaction may be documented, and the lawyer must assess which way is in the best interests of his client. In most circumstances, documents should be drafted precisely, so that a third-party not familiar with the parties’ intent at the time of contracting may not interpret language to mean something it does not. The parties’ intention and the transaction’s terms should be drafted with clarity and precision to avoid possible misinterpretation. Sometimes, however, it may be necessary or in the client’s best interests to leave a document less precisely drafted, because the parties may not have considered all issues fully and even prefer not to do so. This tactic may be necessary to move a transaction or matter forward when the parties are unable or unwilling to define the terms of a specific part of a transaction. This method may not be completely desirable but should be acceptable if the risks are fully explained to the client and the client understands them. Regards SIMI RAJ R.V B.A, LL.B, M.B.L, D.D.R (USA) MANAGING PARTNER & CORPORATE LAWYER RAJ LAW CONSULTANCY Thiruvananthapuram rajlawconsultancy Ph: 09447363360
Posted on: Thu, 04 Sep 2014 05:44:40 +0000