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Summary: Are you not sure you want the life or work style of a litigator? Maybe you should consider the practice area of transitional law.
There comes a time in the law school career of every prospective attorney in which he or she has to choose what their practice area will be.
While the terms litigation and transactional might be bounced around within any law school, some legal students may be somewhat confused while trying to decipher litigation from transactional.
With that known, keep reading this article to find out about transactional law, how it compares to litigation, and the three pros and cons of transactional law.
Transactional and litigation law: What are the differences and similarities?
Transactional and litigation law are as dissimilar as they are alike. What makes the two alike is they are both an actionable way law is practiced.
Transactional and litigation law differs in that litigation is usually practiced in the courtroom where an attorney directly challenges another attorney who represents an opposing side.
Lawyers whose practice area focuses on transactional law by nature of their specialty hardly see a courtroom if ever.
Once that is acknowledged, these practice areas begin to resemble each other again in that they both require copious amounts of research and a strong understanding of the desires set down by two opposing parties.
But once that is established, transactional and litigation once again grow apart as litigation is needed if a lawsuit seems eminent, while transactional law is required if both parties are in agreement that a lawsuit is not in either’s best interests.
What is transactional law?
According to Law Teacher.net, transactional law refers to the various substantive legal rules that influence or constrain planning, negotiating, and document drafting in connection with business transactions, as well as the law of the deal (i.e., the negotiated contracts) produced by the parties to those transactions.
Transactional law’s primary focus is the formation, negotiation, documentation, or consummation of business deals. Transactional lawyers therefore must understand the business, financial, and economic aspects of deals so as to draft workable contracts and disclosure documents, conduct due diligence, or counsel clients on issues that require business savvy as well as knowledge of the law.
The first pro of transactional law: Less involved research = Less law to be concerned with.
The transactional lawyer must focus on business issues that affect the client, bring forth relevant developments in business and other interests.
But even with that, transactional law tends to not involve “the law” as often as litigation. This means less trips to the law library as well as less research on issues that are transaction related.
The second pro of transactional law: A larger variety of legal situations.
Most medium and large firms consist of at least two major departments, transactional and litigation.
While the litigation department can be stuck on one specific case for months if not years, such an elongated amount of time is not a factor with transactional law simply because no lawsuits and court proceedings are involved.
Meanwhile, transactional law has more going for it when it comes to variety.
The practice groups in a transactional department may include merger and acquisition work, private equity, and real estate transactions while the litigation department may include legal conflicts involving employment, securities, product liability, intellectual property and insurance.
While litigation attorneys (also known as litigators) deal with the judicial process, civil disputes or criminal cases that are headed to court, transactional lawyers provide advice on how to structure a business and evaluate ventures and coordinate with other specialists like tax lawyers, employee benefits lawyers and real estate attorneys to serve the sophisticated needs of their corporate clients.
Transactional lawyers provide day-to-day advice to their clients, and most of their work restricts itself to law firms. Very little travel or obligations outside the law firm are required of the transactional attorney.
When compared to their counterparts, transactional attorney’s work behind the scenes, writing contracts, completing real estate closings and other legal work that would not involve going to court.
Transactional attorneys aim to help clients avoid litigation through the preparation of contracts and through advising on how to follow the law. This, of course, can lead to a variety of cases that once again, litigators might not have exposure to.
The third pro of transactional law: You will always have one type of client.
Having one type of client tends to simplify day-to-day activities for a transactional attorney in a way that a litigation attorney may never realize.
Transactional attorneys often work for companies or businesses, as most private individual clients don’t require the services of transactional attorneys,
At the same time, litigation attorneys represent both individuals and corporate clients as private individuals may be involved in lawsuits as well.
As having only one type of client can at times be tedious, the advantage for the transactional attorney is they have less discovery to accomplish than would be the case with a litigation attorney who can have a mixture of individuals and businesses – all of which will require research and background work.
The first con of transactional law: Less exposure.
One positive aspect of litigation law is a lawyer who argues a particular notable or popular case can – for lack of better words – become famous.
We’ve seen this with cases such as the O.J. Simpson murder case and countless other court battles which have ample media coverage. In short, with the O.J. case, everyone made out like a bandit with book and development deals as well as other projects. Even the judge found himself in a position where he was able to take early retirement.
No such luck will occur for the transactional attorney.
Transactional attorneys rarely if ever get noticed by external interests. Transactional attorneys are usually tucked away inside a law firm or business with hardly an outside soul knowing those attorneys even exist.
This can lead to the transactional attorney feeling he or she are not appreciated, which can invariably result in worker disenchantment and in the end burnout or worse.
Meanwhile the litigator who’s been sucked up in the vortex of a strong civil or criminal case, might now appear regularly on the nightly news.
The second con of transactional law: Representing big business doesn’t net you bigger paychecks or more job security.
When it comes to the monetary aspect of either career option, transactional lawyers or litigators may work for the same kind of clients and earn the same kind of money.
However, litigation is recession-proof. While corporate work slows down in an economic downturn, litigation doesn’t. People sue each other in good times and bad.
There also is the case of the client themselves. Having only one client can be detrimental to a transactional attorney’s career should that client go belly up or decide to fire their counsel.
Doing so could mean all the transactional attorneys who represent this one client will find themselves without a paycheck.
The third con of transactional law: At times there could be more complexity.
While there is little to no recognition for the transactional lawyer, another con for those in this practice area is that the minutiae of transactional law can run into complexities litigators never have to deal with.
This can entail complex and extensive rules, chiefly those concerning fiduciary obligations and misrepresentation if the transactional lawyer fails to perform loyally and competently. At that point, the transactional attorney may find himself responding to the client’s malpractice claims.
Of course depending upon the individual, there are many more pros and cons to being a transactional attorney, including those that directly compare and contrast with litigation attorneys.
For instance, it is much easier to transit out of transactional law into business since the acquired skill set is more readily transferable to a non-legal business job such as investment banking, private equity, and real estate development. This provides a greater avenue of exposure and increasing mental security.
Transactional law offers a wide range of practice niches that allow associates to develop a specialized skill set that can enhance their marketability in the future.
A practice niche can be focused exclusively for specific types of transactions such as structured finance and derivatives work, or can be slightly broader to include a range of transactions which can include banking and securities work. It is also possible to create a niche in a particular industry sector, servicing clients in industries such as new media, manufacturing, intellectual property or entertainment.
To that end, if arguing in a courtroom after having done massive amounts of research, all while you are not one who cares if you’re in the limelight or not of what has become litigation law, consider transactional law. It’s just as solid and the opportunities of practicing in this area can be more than satisfying.
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