Business/ Corporate Law

Business/

Corporate Law

Businesses are what keep our economy going. The area of law dealing with businesses is thus as important as it is profitable. Corporate law is everything that has to do with the “formation”, “operation”, and “death” of a corporation. Academics identified five elements that are the basic legal characteristics of a corporation: legal personality, limited liability, transferable shares, delegated management under a board structure, and investor ownership.

• Legal personality: a corporation owner forms a separate legal entity that acts on its own
• Limited liability: someone who sues a corporation can’t go after the personal assets of whoever owns the corporation
• Transferable shares: ownership can be transferred, so even if the original owner no longer wants to operate, the corporation does not have to shut down
• Delegated management: shareholders elect a board of directors and the board members hire officers. Each of these groups has defined power and responsibilities.
• Investor ownership: investors may participate in the control of the corporation and in sharing profits, usually in proportion to the financial contribution

Academics also identified three main conflicts that corporate law deals with: “conflicts between managers and shareholders, between controlling and minority shareholders, and between shareholders as a class and non-shareholder constituencies of the firm such as creditors and employees” (Armour, Hansmann, and Kraakman).

Corporate law intersects with many other areas of law, such as international law, employment law, and sometimes even family law. That is because corporations are a huge part of our lives and touch every aspect of how we operate day-to-day.

An important sub-area of business law that some lawyers choose to specialize in is closely-held business law. If a business’s shares are held by only a small number of stockholders, it is a closely held business. The main difference between public corporations and closely-held companies is that public corporations have their shares traded publicly, whereas closely-held businesses do not usually have public shares. The main disadvantage of a closely-held business is that personal factors may often influence what the company does. Internal conflicts can complicate matters for lawyers who specialize in this area. However, if you are interested in helping family businesses with their day-to-day legal issues, this might be the area for you.

Education and Background:

A background in business or any business-related area (such as marketing, accounting, finance, or economics) may be helpful because it means you are already used to working with businesses. However, any background will allow you to succeed at corporate law so long as you like to read and write — you will need to have an expansive knowledge of all of the rules and regulations concerning corporations and be able to properly advise corporations about these matters.

Additionally, there is no shortage of classes or internship opportunities in this area of law. It is considered a “main” area of law, and you will be able to find plenty of opportunities to learn more about it and engage in it both while you are in law school and after.

Getting a job:

Many corporations will choose to have lawyers in-house to reduce hassle and to meet their everyday needs. Large corporations may employ several corporate lawyers, and even smaller businesses often find it helpful to have at least one. This is a “safe” area of law that will never go away.

You may also be able to start your own firm quite successfully in this area since there will be no shortage of clients. There are plenty of small firms that employ corporate lawyers. Big Law corporate lawyers make the big bucks. If you are looking for a more flexible work schedule after gaining Big Law experience, check out InCloudCounsel, which utilizes new technologies to help lawyers choose their own hours and pick their own homebase.

In sum, there is no shortage of opportunities available in corporate law. Do a quick Indeed search and you will find plenty of results that catch your interest.

Average salary:

Although the average salary of a corporate lawyer in 2014 was only $98,823, those who graduate top of their class and/or from a prestigious law school can receive much higher salaries; for example, Columbia law school graduates can expect starting salaries of $165,000 (Lawyer Salary – Top 10 Law Careers). Big Law pays well in exchange for rough hours; law firms in usually pay better than in-house.

Would you like this practice area?

Problem-solving is the number one skill you should have if you work as a corporate lawyer. Realize that there will be a lot of pressure on you, as you are the one expected to help a business thrive by keeping it out of legal trouble. The ability to recognize potential problems before they actually occur or to quickly mitigate issues when they arise is essential. You should have “sound business judgement” and not be afraid to make important decisions at the drop of a hat. You will have your fair share of reading and writing as a corporate lawyer, but you will seldom be in a courtroom. After all, your goal is to keep businesses out of the courtroom! If you love business or finance, this will be the area for you; you will be dealing with large amounts of money and complicated business transactions every day.

Consider whether these articles interest you:

Can suing a company’s board lead to more accountability for workplace misconduct? (Rikleen)

“When leaders behave badly, their conduct is often hidden in plain sight and insulated by enablers. So, it’s only fair to ask: When a corporate executive misbehaves, what did the board of directors know and when did they know it? Even in the face of hundreds of #MeToo headlines revealing negative behaviors in the workplace, there has been little focus on those who have a fiduciary duty to the organizations that they oversee—the members of their board of directors. It is possible that a lawsuit filed by a Lululemon shareholder…” Read more

Ritchie v. Rupe and the Future of Shareholder Oppression (Dawson)

“In 1988, the Texas Court of Appeals held in Davis v. Sheerin that minority shareholders in close corporations are entitled to a buy-out of their shares if they are “oppressed” by the majority shareholders.1 Davis synthesized other states’ case law in order to arrive at a two-part test for shareholder oppression. Under this test, actions of majority shareholders are oppressive when they either (1) substantially defeat a minority shareholder’s reasonable expectations or (2) constitute harsh or wrongful conduct that departs from the standards of fair dealing.” Read more

Hobby Lobby, Corporate Law, and the Theory of the Firm (Meese and Oman)

“Sebelius v. Hobby Lobby Stores, Inc. is shaping up to be the blockbuster case of the Supreme Court’s October 2013 Term. The 2010 Patient Protection and Affordable Care Act (“ACA”) requires most companies with fifty or more employees to provide such workers health insurance, including women’s “preventive care and screenings.” In August 2011, the Health Resources and Services Administration determined that such care includes “[a]ll Food and Drug Administration approved contraceptive methods [and] sterilization procedures,” including medications that some consider abortifacients. Over 300 plaintiffs who object to artificial contraception, abortion, or both have filed dozens of lawsuits challenging the contraception mandate under the Religious Freedom Restoration Act (“RFRA”). Hobby Lobby Stores, Inc., is one such plaintiff.” Read more

Conclusion:

If one of your potential career paths was to be an entrepreneur or work in a business-related field, your skills can be put to good use as a corporate lawyer.