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by Vault Law Editors | September 10, 2002

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Litigation versus transactional law

One of the basic divisions in the practice of law is between litigation and corporate, or transactional, law. Litigation attorneys, or litigators, deal with the judicial process, with civil disputes or criminal cases that are headed to court. In the realm of criminal law, they are prosecutors, public defenders or private defense attorneys. Those attorneys who handle conflicts between individuals, whether over personal injuries, domestic disputes or other matters, are civil trial lawyers. Commercial litigators are trial attorneys whose clients include corporations and businesses.

It's a myth that everyone who wants to be a lawyer wants to spend time in a courtroom. Many people don't have any interest in criminal law or personal injury. Some would rather contribute to the creation of a business venture than participate in its breakdown. Some lawyers don't care to write the (many) documents that must be submitted to court. Attorneys who facilitate transactions in the fields of corporate or tax law, intellectual property or employee benefits are considered transactional lawyers. In the world of business, transactional lawyers try to set up deals in a way that will avoid litigation and make clear the rights and responsibilities of all parties in the event that something does go wrong.

The difference between corporate law and commercial litigation is simple. Corporate lawyers build transactions or deals, and litigators deal with transactions gone wrong, whether through the judicial system or through alternative methods of dispute resolution like mediation or arbitration.

Transactional law and corporate lawyers

So, what is a corporate lawyer? Basically, corporate lawyers advise businesses on their legal obligations, rights and responsibilities. People who call themselves corporate lawyers are usually corporate generalists, lawyers who provide advice on how to structure a business and evaluate ventures and who coordinate with specialists, like tax lawyers, employee benefits lawyers and real estate attorneys (who are all transactional lawyers), to serve the sophisticated needs of their corporate clients.

While corporate attorneys may provide day-to-day advice to their clients, most of their work, at least in larger law firms, is transactional in nature. In fact, some firms use the terms "transactional" and "corporate" interchangeably when describing areas of practice. Corporate lawyers structure transactions, draft documents, review other lawyers' agreements, negotiate deals, attend meetings and make calls toward those ends. A corporate lawyer ensures that the provisions of an agreement are clear, unambiguous and won't cause problems for their client in the future. Corporate attorneys also advise on the duties and responsibilities of corporate officers, directors and insiders.

There are many varieties of corporate law practice, and not all corporate lawyers do the same kind of work. Moreover, not all firms categorize corporate practice in the same way. For example, some firms might have separate practice groups for antitrust or mergers & acquisitions, while others include them within their corporate department.

What is litigation?

Litigation is always in the news -- from the controversial landmark abortion case, Roe v. Wade, to the O.J. Simpson trials to the environmental class action lawsuits portrayed in the films Erin Brockovich and A Civil Action. A litigation is a legal proceeding between two or more parties. A litigator is a lawyer who represents a party in litigation. Because litigation is an adversarial proceeding between opposing parties, most of a litigator's job involves preparing for trial, even if a negotiated settlement is the ultimate goal. In cases where parties have contracted to resolve their disputes out of court, a mediator can be hired to find an amicable compromise between the parties. This mediation (or, in some cases, arbitration) reduces the number of cases that go to trial so the already crowded courts are not completely overwhelmed.

Criminal proceedings

There are two kinds of litigation: civil and criminal. When someone breaks a state or federal law, he commits an offense against society. The government, on behalf of the community, begins a criminal proceeding to hold the offender responsible. A criminal litigation is therefore between the government and the accused, or defendant. The government is represented by a prosecutor, typically a district attorney (for state prosecutions) or a federal prosecutor (for federal crimes). The defendant is represented by either a private criminal attorney or a public defender appointed by the state. (Occasionally, usually against the advice of both his lawyer and the judge, a defendant chooses to represent himself, or acts pro se.)

Most states divide crimes into misdemeanors and felonies. A misdemeanor is any offense that results in less than one year of jail time. Petty theft, possession of a small amount of drugs, or breaking and entering is some examples of misdemeanors. Many misdemeanors can result in a fine or instead of jail time. Felonies are more serious offenses that virtually always result in prison terms of more than one year and may include a fine as well as incarceration. Murder, racketeering, rape and kidnapping are all felony offenses. In some states, serious felonies, such as the murder of a policeman or murder with premeditation, are capital offenses, in which cases a criminal defendant might face the death penalty. A person accused of a crime is presumed innocent until proven guilty beyond a reasonable doubt.

Civil actions

A civil action encompasses virtually any non-criminal court proceeding. It can be a private action between two citizens, a proceeding by one person against the state, a suit by an individual against a corporation or any combination thereof. The party bringing the suit, known as the plaintiff or petitioner, usually is seeking a sum of money (damages) from another party (the defendant or respondent) to compensate her for a claimed injury or loss. Sometimes the remedy sought involves not money but performance; one party wants the court to compel another either to do something he is obligated to do or to stop doing something that is injurious to one bringing suit. In a civil action, the case turns not on the defendant's guilt but on the issue of liability -- a party is found either liable or not liable. The burden of proof required to establish liability in a civil suit is generally a lower threshold than the "guilt beyond a reasonable doubt" required in a criminal trial.In the case of both criminal and civil litigation, the parties may never actually make it to court; they might come to a mutual compromise before the trial date. Parties to a civil suit might reach a financial agreement or other settlement, while the prosecution and defense in a criminal case might agree to a plea bargain, under which a prosecutor offers a reduced charge or sentence in exchange for the defendant's plea of guilt.

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