The Function Of Attorneys In The Area Of Corporate Finance

Corporate lawyers help business owners with their financial transactions. These include investments, mergers & acquisitions, and debt financing. They also advise companies on compliance with local laws and foreign regulations. Sometimes, a company receives detailed investment proposals that cannot be satisfactorily assessed with a simple review of their legal ramifications. It is where the expertise of a corporate finance lawyer comes in handy.

Legal Advice

There are instances when a corporation receives detailed investment proposals that require more than just a cursory review of their legal ramifications. The corporate financial lawyers are tasked to carry out comprehensive due diligence on this proposal and evaluate the complexities that may arise during the mergers and acquisitions. It is where the legal and financial understanding of the corporate finance lawyer becomes indispensable. They must balance each transaction’s financial and legal considerations and make sound client recommendations. A corporate finance group can provide extensive experience with complex financing structures and financial products that dominate today’s capital marketplace. Ed Batts can advise financial institutions, capital market participants and major borrowers in debt financing transactions and structured finance offerings, including sale-leasebacks, lease-leasebacks and like-kind equipment exchanges, aircraft, industrial plants, real estate and transportation assets. 

Mergers & Acquisitions

Mergers and acquisitions are important aspects of the field of corporate finance. A merger is when two businesses combine their activities, holdings and assets to form one entity, while an acquisition occurs when a stronger company takes over a weaker business. These types of legal transactions can take a lot of time to complete as it depends on the size of the companies and how much urgency is present for either party.

The process of M&A also involves a significant amount of work for the professionals involved in it. It includes a detailed valuation of the target company and its assets and liabilities. They may even help to negotiate the terms of the deal. The merger and acquisition process often impacts employees of the target company in different ways. It can be good or bad depending on how well the acquired company integrates its workforce with that of the acquirer. Firms specializing in M&A can assist in developing and targeting companies to ensure the process is completed successfully.

Debt Financing

At a certain point, companies may need follow-up access to capital to meet operational demands or pursue growth opportunities. The right financing choice is crucial in such a scenario to ensure future success. It is where corporate finance lawyers come into play. Corporate finance attorneys represent financial institutions and debt lenders in loan documentation. They provide efficient and responsive legal services, drawing upon a robust suite of model loan documents and extensive experience to help clients navigate their most complex financing transactions. By around the five-year mark, associates start to manage their deals and closings. They also recruit and train new associates. At this stage, many choose to join the partner track.

Equity Financing

Equity financing involves selling ownership shares in a company to investors in return for funds. It is a popular option for startups and small companies that need help to secure large debt loans. This type of financing can be obtained from angel investors, venture capitalists, crowdfunding platforms, or an initial public offering (IPO). Investing in your business through equity financing can bring valuable connections, advice, mentorship, and knowledge you may have yet to gain. However, a major downside of this form of funding is that it often gives the investor control over your company.

Moreover, a company’s stock market performance can affect its ability to raise capital through this method. The pace of equity financing can increase during a bullish stock market, but it typically slows down during a sustained downturn. It is because investors are typically more risk-averse during a market correction. The equity market also requires more thorough business reporting, which takes time and resources.