There are numerous factors that must be considered when a client looks to hire a lawyer or legal practitioner. These include, but are not limited to the following:
- trust in the person,
- the level of competency of the lawyer,
- the ability for the lawyer to communicate professionally,
- the practice areas that the lawyer is proficient in,
- and the prices being offered in exchange for legal services.
Trust in the lawyer, and possibly the brand of the law firm, are both important because the client will inevitably be revealing confidential information to the professionals. Therefore, they will want to make sure that their legal matter will be handled correctly. The competency of the lawyer is obviously important, as an incompetent lawyer may place the client in a worse situation than from where he or she started. Finally, the ability for the lawyer to communicate effectively is also very important. This is because a lawyer needs to have candor with their client, which in turn means that they have been able to inform the client of hard truths, which may come back to affect the client later. The lawyer should also make sure he or she is using the appropriate electronic means to communicate with the client.
In this article, the main focus will be on the importance of understanding the areas a lawyer/law firm engages in. More specifically, this article will look at the difference between the practice areas of corporate and commercial law in Australia. These two areas of law are often misunderstood by clients to be the same thing. However, as we will explain below, although there may be some overlap, each practice area has a distinct overarching concept.
What is Corporate Law?
A corporation is its own legal entity and can be designed to run in numerous ways. The most common business entity in Australia is a corporation that has been limited by shares. Other structures include:
- unlimited with share capital,
- limited by guarantee,
- and no liability companies.
Each of these has its pros and cons. Depending on the way the corporation is structured, the shareholders and/or the directors’ liabilities can have varying degrees of protection. Therefore, this is an area of law in which competence plays an especially important role. A potential client will want to make sure that a corporate lawyer knows the intricacies of a corporation’s governance structure. Having this knowledge and skills means that the attorney can both save the client money and reduce the risk of legal inadequacies. Overall, corporate law is an area of law that deals with the rights, the relationships within, and the conduct of, businesses within a territory or within the country itself. It is mainly focused on the governance of companies, and whether the governance structure allows the company to function with as little to or no legal inconsistencies.
Specifically, corporate lawyers usually need to be competent in the following areas:
- mergers and acquisitions,
- corporate finance,
- corporate restructuring,
- and corporate litigation.
It is important to note that territorial government and the federal government almost always have their own laws and regulations regarding the structure of corporations. Australian corporate law is primarily governed by a single comprehensive statute, called the Corporations Act (2001). This statute is administered by a single national regulatory authority called the Australian Securities and Investments Commission (ASIC). A competent corporate lawyer will need to know the basic framework of the state and its regulatory effects in the practice of business.
What is Commercial Law?
Commercial law, on the other hand, is primarily concerned with the transactional matters of a business. The kinds of activities that a business may engage in are quite broad, ranging from selling a physical good such as a table (for example) to selling high-quality investment or legal advice.
Here are some, but not all, of the practice areas that commercial lawyers are usually competent in:
- competition law,
- consumer law,
- intellectual property,
- contracts, and
- labour law.
The main aim of commercial law is to provide a legal structure from which a business can conduct its day-to-day operations. The day-to-day operations of a business will obviously be different depending on what kind of company is being run, however, basic operations include:
- making employment contracts are up to date and secure,
- understanding the changing landscape of the franchise agreement (if the company has entered into one),
- knowing how financing within the company works,
- and litigating disputes between the company and its customers (or between the company and another business within the appropriate jurisdiction).
It is important to note that, due to the applicability of commercial law in everyday life, this area of law intersects with many other types of law (as seen from the list above). Commercial law also, therefore, intersects with certain aspects of Corporate Law.
Overall, there are numerous areas of law that intersect with each other and can therefore be mistaken with the other. Common examples include immigration law & family law, criminal law & family law, commercial law & intellectual property, criminal law & public law, and many more. However, as seen from the discussion above, corporate law and commercial law can be one of the most confusing combinations. The former involves the relationship between business partners and also involves an understanding of the different structures a corporate entity can take. The structuring of a business is particularly important regarding industry-based regulations as well as for tax purposes. The latter involves the relationships between a business and its consumers (or customers). This itself involves drafting appropriate employment contracts, having a rock document that outlines the terms and conditions of your business, product liability, and product warranty disputes, etc. Therefore, the vast majority of people are used to dealing with the operation of commercial law. This is especially true if you run a small business.
In conclusion, although two (or more) areas of law may overlap in concept and jurisprudence, each area has its own unique core aspects which should be understood and respected by lawyers and legal practitioners alike.
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