Banking and finance

Becoming a banking and finance lawyer requires a range of abilities. Mark Lim, banking and finance partner at Albar & Partners, proves that you must be able to handle situations ranging from simple to mind-boggling.

Banking and finance includes Islamic finance, corporate banking, project finance, debt capital market and structured finance. It covers various types of financial transactions, ranging from the run-of-the-mill banking transactions to complicated project or structured financing and private debt securities. In a nutshell, the lawyer is involved in the documentation and implementation process when, typically, a corporate body borrows money from financial institutions or embarks on a fund-raising exercise involving financial investors.

The scope of work

The lawyers ensure the interests of the represented client are protected. Additionally, the lawyer must render a balanced view and consider all the subject matter thoroughly to ensure that the deal can be completed. You should always bear in mind the need to be solution-orientated and to use your best endeavours to achieve successful completion as envisaged by the clients, subject to the confines of ethics and law. Banking lawyers don't 'kill the deal' but ensure it can be implemented within the ambit of the law.

Among other things, a lawyer in this practice area:

• prepares the relevant financing documents within the terms agreed between the parties
• at times, advises the potential lender of relevant conditions or terms even before a Letter of Offer is issued
• renders the requisite opinions on issues which may arise under the transaction
• carries out such works as are necessary to ensure the transaction is completed within the agreed timeframe and terms.

Knowledge and understanding of the law (including recent court decisions) are important skills. You must be able to work to tight deadlines. In business, deadlines to achieve certain milestones are critical - on pain of significant financial penalty - and clients select lawyers who will help them achieve this.
You are expected to prepare the requisite documentation and identify legal issues for every transaction. Failure to do so may result in its legality being challenged or result in the deal being called off at the 11th hour, with severe consequences.

The day-to-day work

Predominantly, a lawyer's daily tasks will include drafting of documents, carrying out research work, rendering opinions, attending meetings and other work necessary to complete the transaction within the agreed timeline. This means you will be working, on average, 10 to 12 hours per day.

The types of law practised

A typical banking and finance department covers extensive aspects of finance-related law, which includes corporate banking, debt capital markets/structured finance, Islamic finance and project finance.
A corporate banking team will advise clients on various financing transactions, including:

• acquisition finance, bilateral loans or syndication (secured and unsecured)
• debt rescheduling or restructuring arrangements
• sell-down of loans
• trade financing agreements
• factoring (both recourse and non-recourse) arrangements
• ISDA documentation and cross-border credit/loan facilities in ringgit and/or foreign-denominated currencies.

In project finance a team is often involved at the initial stages of negotiations and helps clients assess and contain risk to ensure adequate protection of their interest.
In the area of Islamic finance, lawyers will be actively involved in the more specialised Islamic debt capital market transactions. Experience extending to the principles of Mudharabah, Musyarakah, Istisna' and Ijarah Thumma Bai' will be needed. You may be required to advise various financial institutions on how to structure and document myriad innovative and internationally acceptable Islamic finance techniques and instruments.
A debt capital markets practice group will typically handle structured financing and debt capital fundraising exercises, such as asset-backed securitisation (ABS), the issuance of bonds in the form of commercial papers and/or medium-term notes (CPMTN), Islamic or conventional and equity-linked debt issues, such as warrants and loan stocks.

The firms and their clients

This kind of business is mainly handled by commercial law firms, with medium-to-large law firms usually handling high-end banking and finance work. Banking and finance clientele will include multinationals and government-linked corporations (GLCs) investment banks, commercial banks, insurance companies, other Malaysian and international financial institutions and also corporations and individual borrowers.

The skills required

Knowledge of the law and a good command of spoken and written English is essential. Possessing a meticulous nature is also an important skill. Copying and pasting from other precedents to draft financing documents is just a myth. Every provision in a financing document has a meaning and objective. The deletion or amendment made to one provision may require other provisions to be amended accordingly. Failure to do so may have serious repercussions. Required prerequisite study includes, contract law, company law, land law and Islamic banking.

The essential banking lawyer

In essence you should be able to 'think out of the box'. The current working environment is fast-paced and challenging. There is constant pressure to meet client demands, deadlines and stay within professional ethics. Graduates need to be knowledgeable about the law and up-to-date about the latest financing products and deals in the market. They must also be diplomatic when talking to clients. In addition, graduates need to be independent, determined and confident about their capabilities to succeed in this field of work.

About the author

Mark Lim Chin Hian is a partner (Banking & Finance) with Albar & Partners. He holds a Bachelor of Business (majoring in Accountancy) from Swinburne University of Technology, Melbourne, Australia, and an LLB (Hons) from University of Greenwich, London, UK. He was admitted as an Utter Barrister of the Barrister of the Honourable Society of the Middle Temple, London, upon being called to the Bar of England and Wales in 1996, and admitted as an Advocate & Solicitor of the High Court of Malaya in 1997. He has been with the firm for 11 years, where he practises in banking and finance, debt capital markets, debt restructuring, Islamic finance, project finance, structured finance and asset backed securitisation, and trade finance.

© GTI Specialist Publishers. Reproduced with permission.