Lawyers who help to structure, negotiate and document commercial transactions or deals are often referred to as transactional lawyers. Over the past two decades, law schools and law firms have increasingly focused on educating and training law students and lawyers so that they develop the knowledge and skills necessary to perform effectively as transactional lawyers.
At law schools in jurisdictions such as the US, the UK and Australia, the curriculum has been expanded to include transactional law subjects, where substantive law is taught in a transactional context. To put it differently, students learn about law through transactions instead of learning about transactions through law. Chinese law schools have also started to develop a transactional law focus. For example, Renmin University Law School offers an intensive one-week programme called the Cross-Border Transactional Lawyering Boot Camp, which trains students in practical lawyering skills in English.
At law firms, the professional training programme has been expanded to include professional skills, such as advisory, drafting and negotiation skills, and also commercial awareness. In addition, training in the use of technology has become increasingly important, particularly as lawyers begin to use artificial intelligence in areas such as due diligence and smart contracts (for a discussion about smart contracts, see China Business Law Journal volume 7 issue 8: FinTech and smart contracts).
Teaching law students and training lawyers from a transactional perspective requires students and lawyers to gain an understanding of what transactional lawyers do and how they operate. This is part of the process of converting lawyers from problem-spotters to problem-solvers; from advisers who merely take instructions and execute the deal to business partners and trusted advisers who can help to create a better deal for their clients.
However, one of the missing ingredients in the recipe to produce effective transactional lawyers is an understanding of the architecture of deals and deal-making. We have been clear about the “what” in terms of what lawyers need to know in a technical legal sense and what lawyers need to do in a practical sense. We have also been clear about the “how” in terms of how they should apply their technical knowledge and professional skills. What we have not been clear about is the “why” in terms of why clients do deals and why deals are designed in certain ways.
Of course, there is nothing better than on-the-job training to hone the skills of transactional lawyers and to give them the necessary experience to perform effectively. However, without a conceptual framework for deal-making, the response of lawyers will often be instinctive and based more on an intuitive feel for what works than a holistic understanding of how all of the pieces fit together.
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A former partner of Linklaters Shanghai, Andrew Godwin teaches law at Melbourne Law School in Australia, where he is an associate director of its Asian Law Centre. Andrew’s new book is a compilation of China Business Law Journal’s popular Lexicon series, entitled China Lexicon: Defining and translating legal terms. The book is published by Vantage Asia and available at law.asia.