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Definition and Trends

Banks are large and complex organizations, and most of their activities have legal implications. It is up to the legal department to ensure that all the contracts signed by the bank are watertight, that the bank fulfils the commitments to which it is contractually bound, and that lawsuits are avoided.

Thanks to banking scandals and hefty fines from regulators, banking lawyers have come into their own in recent years. For example, Citigroup promoted its former chief legal counsel, Chuck Prince, to chief executive in 2003, just after Citigroup was forced to set aside a massive $1.2 billion to cover the costs of litigation related to Enron and biased equity research.

Roles and Career Paths

As a banking lawyer, you may specialize in the legal complexities of merger and acquisition (M&A) deals. Or you could find yourself working on the trading floor, or with the capital markets teams. Usually, there is also a team of lawyers working in a central legal office dealing with issues such as discrimination claims and major litigation.

M&A work can involve everything from preparing the documents expressing one company’s intention to buy another to conducting due diligence on the proposed purchase.

If you work on the capital markets team you’ll deal with the legal complexities surrounding the issuance of new financial products. In addition, lawyers ensure that the information provided by a company preparing to list on the stock exchange is correct and within the law.

Trading floor lawyers advise on the legality of trades and deal with the documents required to buy and sell financial products. By determining which trades can and can’t go ahead, trading floor lawyers play an important role in the development of new complex derivative products.

Few investment banks train lawyers themselves; instead, securities lawyers typically get their start working for a major law firm.

Skills and Qualities

  • – Ability to assimilate information and pick out key points
  • – Very strong interpersonal and lateral thinking skills
  • – Work well under pressure
  • – Ability to grow and maintain client relationships