Transactions, Part I: Intersections of Corporate and Litigation Practice

April 3, 2012

Small Law: Independent ThinkingThough civil lawyers can be categorized by many areas of specialty–real estate, commercial, intellectual property, to name just a few examples—they are commonly associated with one of the two families: litigators and transactional lawyers.  There are the people who fight in the courtroom, and there are the people who make deals in the board room.

While the philosophical separation of corporate and litigation practices is convenient, it is a practical impossibility for civil litigators in smaller firms.  Without the luxury of a corporate transactional practice group to lean on, the small firm litigator must be equipped to cross the divide between litigation and transactional practice.

In some respects, litigating transactional issues is no different from litigating any other civil law dispute.  Corporate transactional practice is, essentially, high-level contract law.  So, when confronted with litigation resulting from a corporate dispute, look to the guiding documents first—for example:

  • Agreements
  • For more complex transactions, the “deal book” comprised of schedules, exhibits, and representations and warranties)
  • Corporate formation documents.

Then ask the questions common to any dispute:

  • What did the parties agree to do?
  • What was exchanged?
  • What actually transpired?

In other words, do not be mystified by the case simply because it involves corporate issues.  The same tools used for problem-solving in other civil litigation are still of use in cases involving transactional issues.

Other issues, however, are not as common to litigators.  Whether you are litigating a deal gone bad or a corporate dissolution, it is important to grasp the dynamics of the business organizations and transactions at issue.

  • The corporate forces that motivate the clients’ respective decision-making processes are important to understand, and can assist you in formulating a winning litigation strategy.
  • Likewise, many transactions call into play complex, state-specific corporate laws, tax issues, and a host of other substantive laws that are beyond the expertise of most civil litigators, yet critical to litigation outcomes.

Because a small firm litigator often does not have a transactional practice group to handle corporate issues that arise, it is a good idea to seek outside connections with corporate lawyers.  Their expertise comes in handy in those instances when a uniquely transactional issue arises in your case.  But the value of a transactional eye is not limited to assisting with disputes about corporate and transactional issues.  In any litigation that reaches settlement, for example, the parties make a deal.  It is good practice to enlist the guidance of a transactional attorney to assist in crafting complex settlement terms, and to help evaluate the practical implications of terms that are not necessarily apparent on the face of the document.

In other words, corporate and transactional practice can, and often does, inform business litigation decisions.  If you practice in California, corporate and civil litigation are covered in great detail in The Rutter Group’s treatises, California Civil Trials and Evidence, California Federal Civil Trials and Evidence, and Corporations, all available in print or browsable/searchable online on WestlawNext.

Thus, as is often the case for small firm lawyers, the best resource is the rolodex.  A strategic alliance—or, at a minimum, good friendship—with a corporate transactional lawyer is an invaluable asset to a civil litigation practice.

 

How do you handle transactional/contract inquiries that come into your litigation firm… or litigation inquiries that come into your transactional practice?  Comment below.

 

Related Links:

You May Also Like: