Commercial law was born from the activity of merchants in medieval towns where they came together in guilds and corporations to defend their common interests. These groupings started to be regulated by written statutes through acquired and traditional commercial uses, some with their own courts to resolve disputes. Following on from these historical origins, Commercial law can now be best described as a branch of law that regulates and governs commercial transactions. Broadly speaking commercial law covers:
With the specific areas that fall within the domain of commercial law including:
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Commercial Law: a definition
Commercial law has evolved from the needs and practices of the mercantile community, from opportunities to be grasped and problems to be overcome. It is these needs that have provided the impetus for new types of agreement, new contract structures, new instruments of trade. Sir Roy Goode QC who founded the Centre for Commercial Law Studies at Queen Mary, University of London is regarded as a leading authority on commercial law in the UK, with his publication Goode and McKendrick on Commercial Law, being the first port of call for the modern-day practitioner with its theoretical and practical coverage of commercial law in both a national and an international context. Sir Roy Goode defines commercial law as “the totality of the law’s response to the needs and practices of the mercantile community.” The definition also includes trade law and specialist fields such as consumer law. And as Sir Roy Goode explains it encompasses “all those principles, rules and statutory provisions, of whatever kind and from whatever source, which bear on the private law rights and obligations of parties to commercial transactions.”
In summary, the definition of commercial law concerns the sale and supply of goods and services and the various means by which this is done and financed.
Areas of Commercial Law
Commercial law is a broad term that covers a variety of specific fields of law. A central part of it is the commercial context that comprises of shipping, insurance, manufacture or sale of consumer goods and wider commercial disputes. Commercial lawyers are able to advise on business transactions through early stages until completion including in settlements and disputes. Any part of law that involves companies, their regulation and activities in which they engage in will require the use of commercial lawyers. Commercial lawyers deal primarily with contract and/or tort laws, and this work can involve issues arising before, during and after a business has been transacted. Such disputes are sometimes brought before courts after other modes and means of resolution such as arbitration, dispute resolution or mediation, have failed to provide a solution acceptable to all interested parties.
Below are some of the key areas of law that fall under commercial law practice:
- Corporate law
- Competition law
- Consumer protection
- Contract law
- Environmental law
- Intellectual property law
- International trade law
- Labour law
- Property law
Many countries have adopted commercial codes that contain comprehensive statements of their commercial law. Lawyers specialising in the field of commercial law are able to provide specific advice to their clients based on these codes.
Interplay with other areas of law
Given the dynamic nature of activities taking place within the ambit of commercial law, there is frequent inter-dependency to other key areas of law such as trusts law, tax law and criminal law. Some common elements that are noticeable in these areas are contracts, commercial disputes, unfair trade practices, deficiency in services and consumer complaints. Global consulting firms are able to provide cross-field experience across various practices extending across businesses and regulatory regimes. For instance, within the remit of manufacturing, distribution and sale of goods, some of the advisory services provided through review of T&Cs, contracts and business strategies range across the following areas:
- Contracts covering outsourcing conducted through detailed procurement processes
- Services distribution
- Software licensing
- Product marketing
- Supply chain
- Maintenance and support
- White labelling
- Online terms and conditions
If you want to pursue a career in Commercial Law check out our comprehensive database of postgraduate courses in this field.Find out more…
Why is Commercial Law important?
If mismanaged contractual issues can be an ordeal to go through especially on transactions hinged on huge risks and heavy investments. Parties to transactions need to ensure that all angles are covered and contractual rights and obligations are clearly set out to progress the various stages of completion of business. There are various reasons why commercial law has gained prominence over the past few decades and is now a leading practice area within most multi-tier law firms seen often with a dedicated team of attorneys and paralegals advising on GDPR issues, risk/compliance, financial regulations, etc. Here are some of the main reasons why it is now so important.
With strict data protection regulations in place, companies and organisations are a lot more accountable than they used to be for the personal data they hold including on their customers and suppliers, and what they do with this data. The ability to utilise and safeguard data is a requirement for all businesses big and small. Lawyers specialising in commercial law are able to provide compliance advice to businesses on a range of GDPR matters. GDPR specialist legal teams are able to offer bespoke advice to businesses on a number of potential issues, including:
- Protecting confidential information
- Responding to a freedom of information requests
- Managing the consequences of a data breach
- Advising on international data transfers
- Dealing with special categories of personal data
- Training and awareness on GDPR in line with regulatory changes
Commercial lawyers are usually well versed with business and corporate affairs in their jurisdictions as well as globally. They can handle a range of corporate deals and transactions and are often involved right through the initiation of deals to the concluding stages of advising businesses on commercial risks. Furthermore, their responsibility in guiding businesses through negotiations and helping parties come to an understanding demonstrates their necessary diplomatic and leadership abilities. If you have good people management skills, commercial awareness – especially of risks, and the ability to pick out important facts then this could be the area for you!
Commercial issues often require a multidisciplinary approach. Law firms are able to draw on their collective expertise to resolve complex disputes and often specialists from different teams get involved in assisting and advising on transactions that may require a holistic evaluation approach to clients’ needs. As with corporate law, commercial law is best handled on a case-by-case basis, and firms that practice in corporate law and regulation are usually seen to advise their clients on commercial law requirements.
How is Commercial Law different to Corporate Law?
Commercial law and corporate law are often confused and can even be used loosely without referring to the main points of difference between the two branches of law. Corporate law as the title suggests, governs the formation, managing and conduct of corporations or companies, and includes matters such as the reorganisation and restructuring of companies, shareholder rights, or mergers and acquisitions. Commercial law on the other hand governs the sale of products and services and sets the standards between parties on how they must conduct their trade and transactional activities. Some countries – such as the United States – have specific ‘Commercial Codes’ that regulate various related activities. For example, the US Uniform Commercial Code covers:
- Sale of goods and services
- Leases of goods
- Negotiable instruments
- Letters of credit
- Investment securities
Becoming a Commercial Lawyer
Commercial lawyers often practice in law firms and represent a wide range of clients on behalf of the firm. Since commercial disputes are usually brought to a court or go into arbitration, a commercial lawyer works in close contact with a firm's litigation department. Commercial lawyers who work within the legal department of a company are known as in-house lawyers. They can also be employed by government agencies or international organisations. As with any other branch of legal practice, you will need basic qualifications of an attorney to practice in your jurisdiction to become a commercial lawyer. From September 2021 the Solicitors Qualifying Examination (SQE) is going to be phased in as the new centralised way to qualify as a solicitor in England and Wales. The introduction of the SQE will mean that everyone who becomes a lawyer will undergo the exact same process and meet the same high standards.
As a commercial lawyer within the UK you can become a specialist in your area of law. For instance, you could specialise in competition law and advise clients on antitrust regulations within the UK and across the EU. UK businesses are subject to domestic law in the form of the Competition Act 1998 and the Enterprise Act 2002, as well as European law in the form of Articles 101 and 102 of the Treaty of the Functioning of the European Union (TFEU). Whilst Brexit may affect this area of law – as well as many others – European law is still relevant post-Brexit, as activity by UK businesses will often have an effect within the EU. Therefore, as a competition lawyer you would need to consider all these aspects of applicable law to be able to negotiate, advice and draft agreements on behalf of your clients. Similarly, you could also specialise in corporate and securities law and advise clients on mergers and acquisitions (M&A) or initial public offerings (IPOs).
Specialist knowledge within a particular area can be gained in a variety of ways, including:
- Work experience through a specific sector such as insurance or regulatory body
- Postgraduate LLM specialism
- PhD or academic research experience
f you aim to secure a place in a law firm, you would ideally apply for a training contract to gain initial work experience with a commercial law practice. Internships are another great way to get a sneak peek into the commercial law world and you get the chance to work with other trainees and qualified lawyers, and could well lead onto other career opportunities. Once you are sure that being a commercial lawyer is the career path for you, you can start applying for direct placements to law firms.
What skills do you need to be a successful Commercial Lawyer?
Commercial lawyers can either be transactional lawyers – which means that they draft and review legal documents for their clients, or contentious lawyers – where they help clients resolve disputes with other parties. Commercial lawyers hold a wide range of skills from research and analytical skills to negotiation and diplomacy. A keen eye on developments within the business world is a huge asset for a commercial lawyer. To be successful in this field and to enjoy your work you must be interested in the goings on in the business world. Moreover, specific industry knowledge is important for those wishing to practice in areas such as energy law or banking regulations. Attention to detail is of paramount importance, as the smallest misadvice could mean a major drawback to a client’s business. Good team management and leadership skills are complementary to a commercial lawyer’s role, not only in coordinating the work within their own team but also in leading parties to an understanding or settlement and working with other solicitors and support staff in a firm.
What does a Commercial Lawyer do?
In general, commercial lawyers represent their clients in business deals by advising on risks, compliance and reviewing agreements that include varied nature of clauses to secure their clients’ interests. Commercial lawyers spend a lot of time going through company paperwork, transactional terms, regulatory forms, researching on applicable laws and regulations, understanding commercial reports including risk and compliance documentation, etc. Their work also entails examining national, international and local laws to keep their clients up-to-date with the latest rules and regulations. Some of the popular services provided by commercial law teams include the following:
Where necessary, commercial lawyers collaborate with other lawyers, clients or government agencies to execute paperwork or complete transactions. They may also engage in negotiations on behalf of their clients. On a day-to-day basis, the work of a commercial lawyer involves drawing up a wide range of commercial agreements including from the list above and drawing up standard forms of clauses and paperwork, such as disclaimers and warranties. Specialist advice is often sought by businesses from commercial lawyers on clauses such as non-compete clauses, restrictive covenants and dispute resolution mechanisms, given that businesses are involved in transactional work.
What makes a good Commercial Lawyer?
Commercial lawyers are usually hired by law firms, in-house legal teams in companies, the public sector or international organisations. Some of the main requirements employers especially law firms look for in hiring good commercial lawyers are:
- Exceptional specialties in drafting paperwork
- Holding a well-rounded reputation among clients
- Proficient in their delivery of work
- For specific and complex transactions
Companies would usually look at specialist experience in a commercial lawyer profile such as those with a working knowledge of company law and sector specific experience or prior in-house experience in drafting company policies and guidance. Experience of working with various teams would also be very beneficial.
Essential skills of a Commercial Lawyer
Regardless of whether you choose to work in a law firm or with an in-house team, some of the below traits and skills can go a long way in building a successful career as a commercial lawyer:
The success of a good commercial lawyer depends on how skilfully he or she manages the assignment at hand. A commercial lawyer’s skills and abilities are tested with the various challenges faced in managing transactions for clients and being able to successfully deliver on the client’s requirements. Often businesses need to be guided in the right direction, as they may not understand the holistic nature of the commercial sense and the legal outcomes of transactions. Therefore, a commercial lawyer’s skill in negotiation, diplomacy, tact, superior knowledge and trust all form key elements in the process. The primary goal of a commercial lawyer is to protect and assist in the best interests of their client’s business.
Career path of a Commercial Lawyer
What a commercial lawyer can do on a day-to-day basis varies by seniority and practice areas. The general career progression in a commercial firm is made up of:
- The first two years as an in-house trainee doing legal research, note taking, proofreading and reviewing documents.
- Junior associates support senior associates in managing their cases. They can be involved in advising on regulations and conduct negotiations independently.
- Mid-level associates spend long working hours to be able to do most of the work involved in managing their workload and communication with clients.
- In the years before being made a partner senior associates’ work will involve structuring deals and running teams of trainees and associates.
- Partners work to win new business, keep the firm strategically aligned across its international locations, and generally manage its executive-level decisions.
As with any career, if you want to become a commercial lawyer your first steps should involve finding out more about the industry. At the same time, this will also help you make decisions about the type of law firm you'd like to work at. Here’s an outline of the things you should be aware of while at university if you’re thinking about becoming a lawyer:
Law firm open days: An increasing number of law firms hold open days at their offices, which are a great way of finding out more about the firm and commercial law in general and are open to students of all years.
Law firm events on campus: Law firms also visit some university campuses to hold networking dinners. These provide an informal environment to speak to current trainees and recruitment consultants at the firm about what life at the firm is like.
Vacation schemes: The best way to find out what it’s like to work at a commercial law firm is to try it for yourself. You will find that many law firms run week-long internships – sometimes known as vacation schemes – where you get the opportunity to work alongside trainees and qualified lawyers at the firm.
Training contracts: Once you're confident that commercial law is the career path for you, you'll need to apply for training contracts with a selection of firms you think would be a good fit. A training contract is the final, on-the-job, part of your training to become a qualified solicitor – effectively a law firm graduate scheme.
How are Commercial Lawyers different to Corporate Lawyers?
Company law also known as corporate law in some countries refers to the formation and governance of corporate entities. Corporate Llaw deals with the formation and operations of corporations. Corporate law professionals are trained in the legal formation of corporations. They develop joint venture agreements, licensing arrangements, mergers, acquisitions and other transactions entered into by corporations. Corporate lawyers differ from commercial lawyers as they are not only responsible for legal paperwork of commercial transactions for the company but they are also involved in the work of company law aspects stated above.
The amount of money you will earn as a commercial lawyer will depend on a variety of factors, including:
- Your practice area
- Your sector (solicitors working in commerce and industry tend to earn more than those in government or private practice)
- What stage of your career you’re at
- Size of your organisation
- Your organisation's location in the UK
Commercial law practice is one of the highest-paid streams within the legal profession, making it highly competitive and an aspirational goal for many young law students and professionals alike.
According to REED recruitment agency, the average salary for a commercial lawyer is approximately between £55,000 and £56,000, meanwhile Adzuna view the commercial lawyer’s salary range as 57.7% higher than the national average salary range making it an attractive choice or new legal professionals. 800000hours.org – a non-profit organisation that provides research and support to help people switch into careers that effectively tackle the world’s most pressing problems – found that in 2017 partners at US-headquartered firms in the UK earned between £1.5 and £3m, for example Kirkland & Ellis, the highest-paying US-based firm, awarded each partner over £4m).Find your PERFECT LLM PROGRAM
Interview with a Commercial Law professional
Lashan Martin is currently working as a Trainee Solicitor within the Compliance Department at Swansea University. She has been working in this role for over a year and is keen to forge her career in the Commercial Law field.
What daily responsibilities do you have in your role?
I conduct research and legal drafting as regards the university’s legal & business disputes.
What’s the first thing you do when you get into the office?
I often review information and supporting documents that is gained from the office manager or Associate Solicitor to facilitate my research of the respective cases.
What is a breakdown of how you spend the average working day?
I am usually at the office from 9am reading emails and scanning my calendar thoroughly in efforts to stay abreast of revised tasks. At 9:30am, I research and write reports which entails the relevant case law and precedents for the Senior Solicitors who then conduct interviews with the clients. I break at 12:30pm for an hour to resume researching relevant points of law until 4pm.
How do you handle, organise and prioritise your workload?
Preparedness via a to-do list is how I organise and prioritise my workload. I always review work to be completed the following day at home in efforts to be well prepared in advance. Nevertheless, I am quite realistic about how much work I can complete within a day; therefore, I prioritise tasks based on urgency.
How much do you correspond with other colleagues on a daily basis?
I correspond with colleagues for a quarter of my time within the office or less. Everyone is generally unsocial in efforts to complete personal tasks.
How much contact do you have with clients on a daily basis?
Because I am in a trainee position I have minimal to no contact with clients on a daily basis at this current time. However, the more senior members of the office have regular daily contact with clients.
If you have an important client are you likely to be in touch with them every day?
The respective solicitors interact with important clients every day.
Are the commercial priorities of each client likely to differ?
Most definitely, this is how cases and the workload within the office is prioritised and distributed to Trainee Solicitors and those undertaking a job placement within the department.
How is communication done with the clients? What do you think is the most effective means of communication?
Telephone conversations are more desirable and convenient. Nevertheless, the advantages of face-to-face meetings afford a deep insight as regards the client’s body language and frame of mind. In addition, this sort of communication is more informal and allows me to gain important information, which might not have been attained otherwise. This form of communication also allows us to form a greater business relationship and trust. Sometimes – particularly if the client is overseas – we do have to rely on emails for communication.
How important is communication when it comes to being a Commercial Lawyer?
As observed, communication and the way it is conveyed is highly essential. Interpersonal skills lead to a trusting relationship between clients and solicitors, otherwise there can be serious implications. A solicitor must be able to relay information to the client and negotiate settlements.
Can you explain what responsibilities you could expect to have as a trainee in Commercial Law? Is it quite a hands-on role or is it more research-based?
Initially, responsibilities are more research based; the responsibilities mainly entail researching the relevant subjects that the solicitors are working on. As trainees we also monitor the media surrounding high profile clients in efforts to gain and build a wider knowledge of the specific area of law, the inner workings of the institution as a whole and culture within the office.
Does a Commercial Lawyer tend to deal with short-term projects or more long-term ones?
Depending on the dexterity of the case, commercial lawyers tend to deal with more long-term projects. Research (preparedness), reviewing contractual documents and litigation in its entirety can be extremely time consuming.
What aspect of your work do you find takes up the most of your time?
Research and legal drafting are very time consuming and take up most of my time. Applying relevant rules to the current facts or issues takes much longer than drafting the conclusion.
Can you explain what commercial awareness is?
Commercial law entails contractual disputes that arise in the course of running a business. Thus, commercial awareness is more than having legal commercial knowledge; it entails national or international consciousness within other fields as well such as government, commerce, finances and technology.
What is it about Commercial Law that first attracted you?
The opportunity to gain easy and direct knowledge and access into the area of Commercial Law via my educational institution was most favorable. Moreover, I had already studied the Commercial aspects of Law throughout my LLM, International Commercial & Maritime Law Course.
Did you try any other fields of law before deciding to enter the field of Commercial Law?
Yes, I explored the fields of Real Estate and International Commercial and Maritime Law before decided upon Commercial Law.
What specific skills do you think a Commercial Lawyer needs to have to be successful?
Interpersonal skills and an in-depth knowledge of commercial law are essential. Understanding the needs of the client as well as maintaining commercial awareness and time management leads to a successful career within this particular area of law.
What is the most enjoyable aspect of working in Commercial Law?
As a former salesperson and an entrepreneur having sold multiple products on Ebay, I am most sincerely intrigued and familiar with business concepts. I have gained a Minor Degree in Business Administration; coupling the knowledge gained with the legal aspects and implications of it makes it enjoyable.
What is the most challenging aspect of working in Commercial Law?
The most challenging aspect of working in commercial law is commercial awareness, which is understanding the world around you as well as your clients.
Please describe your academic and career path to this position?
I completed my Bachelor of Science in Criminal Justice and Minor in Business Administration in 2011; LLB, Bachelor of Laws in 2019; and LLM in International Commercial & Maritime Law in 2020. I was granted a job placement within the Compliance Department at Swansea University in September 2019 during my most recent studies.
Would you recommend this route, or with hindsight could you have achieved your career goal in a better way?
I would not have reached this opportunity had it not been for the job placement at Swansea University in conjunction with my commercial studies at the institution. I could not have been afforded a more accessible route as regards the experience and knowledge gained within the Commercial environment at the point in time.
What advice would you give to aspiring lawyers looking to eventually qualify in Commercial Law?
Like myself, embrace innovative and open opportunities with confidence. Conduct necessary research in efforts to gain an idea of whether this area of law best suits you and the respective industry. Always be commercially aware and stay abreast of legal commercial trends both nationally and internationally. A fresh pair of eyes and your youthfulness within the commercial atmosphere will prove to be advantageous in correlation with your aptitude for being naturally curious.Find your PERFECT LLM PROGRAM
Studying Commercial Law
Commercial law is a popular choice among students undertaking study programs in law, business, accountancy or international relations. It is a mainstream topic that is usually of interest to those who wish to understand the mercantile aspects of business relationships and gain knowledge in the varied nature of rights and obligations of parties involved in commercial transactions. This can be both at the domestic and international levels. Students also gain insight into standards set by organisations such as the North American Free Trade Agreement (NAFTA) or World Trade Organization (WTO) by governing commercial aspects of trade. Commercial law practice is a popular option among law students and young professionals who are aiming to establish a career in the corporate world. You don’t have to be already proficient in commerce or trade subjects to be able to study commercial law. You can gain knowledge as you begin to study and research. It is important however that you are keen to know about the developments in the wider business world, research into topics, so that you can apply a holistic approach through your study process and practice in future.
Commercial Law is a fascinating field to specialise in at LLM level and there are plenty of great law schools to choose from for your Master of Laws studies. You can find out more in our dedicated article.Find out more…
How are students introduced to Commercial Law?
There are various ways in which commercial law can touch upon a students’ coursework and is particularly relevant for those aiming to graduate with a law degree, an accounts qualification or a business management course. Let’s take a look at the various ways a student could initially be introduced to commercial law.
Law degrees: Commercial law is covered within the wider realms of an undergraduate law degree course where students begin to understand its foundations through common law topics and contract law and torts. A more detailed and advanced approach into commercial law is gained when students take up private international law topics involving banking, insolvency and legal systems.
Accountancy & business degrees: Commercial law is also introduced to students of accountancy and business management at an early stage when they begin to delve into various aspects of commercial transactions including rights, duties and obligations of parties. Outside of these areas, you would still come across commercial law aspects within corporate workplace profiles in areas of corporate governance, marketing, sales, resourcing and procurement.
Other degrees: Students can gain an academic knowledge of commercial law through university degree for all kinds of reasons including for research in to enhance scholarship in the area.
Commercial Law subject areas
Undergraduate law programs cover contract law and rules governing sales transactions through concepts applicable under the relevant domestic law such as the law of agency, the law of partnership, company law and rules on insolvency and bankruptcy. LLM programs on the other hand build on these concepts to give students a broader, contextual and critical understanding of commercial law. They cover the operation of judicial, legislative and administrative action in relevant domestic and international contexts.
For instance, commercial law courses in the UK will:
- Provide an insight into the principles of English contract law.
- Focus on their application to business transactions.
- Examine English law’s procedures for adjudicating contractual disputes, including its approach to arbitration
- Explore in detail rules governing commercial transaction such as sales and financing
English law is the preferred governing law for international contracts, English judges, lawyers, and arbitrators have a worldwide reputation for excellence in resolving commercial disputes. This makes LLM programs in the UK an attractive option for students and professionals from all over the world.
Private International Law courses
Commercial law can also be studied through Private International law, which can give students a more focused approach and help to examine cross border issues in commercial law. Private international law plays a crucial role in cross border commercial transactions in the following ways:
- By establishing whether a contract exists.
- Understanding the rights and obligations between parties.
- Determining the extent of liability if the contract is not performed.
- Choice of applicable law.
- Recognition and enforcement of judgments in private international law.
Private international law also provides students with an overview of commercial law conventions and principles made by the Hague Conference in making, reviewing and helping to ensure uniform interpretation of these conventions. Students can acquire a knowledge applicable law for corporations, private international law of banking, and UK and EU jurisdiction and applicable law rules for commercial disputes. International law programs appeal to students as they enable students to engage in intensive study of specialist international and commercial topics with a view to securing a career in international organisations, law firms or multinational corporations. Universities are able to offer an exciting range of module choices within postgraduate law programs and students would have the chance to explore how these legal fields operate in different contexts, considering the relevant issues theoretically and practically.
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Brexit & Commercial Law
Although this article isn't going to fully explore the ramifications of Brexit on commercial law on the UK, there are a few key changes expected.
With this in mind it's clear that post-Brexit Britain is still very much in its infancy – and the true impacf of Brexit on commertcial law is yet to be properly seen. However, let's take a look at some of the areas that are expected to be affected in slightly more detail.
If you need to explore the effects of Brexit on commercial – here are some recommended links: