Analysing The Role Of Legal Practitioners In Commercial Transactions -By Oyetola Muyiwa Atoyebi & Elizabeth Ebekhile

INTRODUCTION

Over the years, the need for Legal practitioners in handling transactions of all sorts, from the stages of commencement to completion has reportedly been on the high rise. This is owing to the fact that the legal profession unequivocally cuts across most if not all other areas of expertise, mainly because the existence, operations and sustainability of these areas of practice(s) are largely regulated by law.

A few of these areas in which Legal practitioners thrive are Finance, Research, Risk evaluation, Medicine, and Property amongst others. However, the focus of this article is to examine the intricacies of a Legal practitioner’s role in the corporate finance sector, while making recommendations on how to ensure a seamless flow in transactions of this nature.

What are Commercial Transactions?

The term “Commercial Transaction” refers to exchanges that entail paying for a good or service in some way. These kinds of transactions often fall under the purview of commercial law and are subject to a set of rules. Business transactions come in a variety of forms, including those that take place between two distinct businesses, customers and businesses, between internal divisions of a corporation, and between two distinct consumers.

However, Britannica[1] refers to Commercial Transactions in law, as the core of the legal rules governing business dealings.

In modern-day practice, commercial dealings can no longer be relegated to any single area or sector, as it cuts across all forms of practices owing to the fact that there seems to be a recurring need to interface at a commercial stance of any given transaction. For example, whilst the primary reason for operating a health care centre is for the care and maintenance of a person’s health status, it is also necessary that its operations are conducted in a manner suggestive of it as a commercial enterprise, and this same ideal is replicated in a plethora of other transactions.

Several scholars argue that commercial transactions do not necessarily require the expertise of Legal practitioners as they may very well function without any significant input from them. However, some others hold a different perspective on the premise that the commencement of any project rest largely within the ambits provided by the law, and the best persons to handle this area, as well from commencement to completion, is a Legal practitioner.

This article rests on the second opinion because it is believed that no transaction can successfully exist, outside of the ambits of existing laws. Thus, it is necessary to state that Legal practitioners play a critical role in this regard.

Although, before we provide an overview of the role played by Legal practitioners, it is necessary to highlight a few of the key strategies that persons or organizations must establish in order to create a successful commercial transaction. The Chip History Center (The Virtual Museum of Semiconductors) provides a breakdown of these strategies and how they aid the success of commercial transactions[2]. According to this institution:

There are only five business strategies: Cost, Quality, Distribution, Technology, and Intellectual property (IP). All business strategies break down into these five, or some combination of them…[3]

There are other factors to take cognizance of such as Business analytics to determine investment risks, revenue generation and retention/stability, Competition analysis, Tax deductions and benefits, Trading techniques, market determination, customer experience, regulatory policies, and product adaptability. This goes to show the important role that can be played by innovators of commercial transactions, as the presence of these above-listed strategies create a clear pathway for the Legal practitioner to determine his role in the transaction.

By and large, the roles acquainted with the success of commercial transactions are colossal in nature and one may wonder at what stage a lawyer fits in. Prior to highlighting these processes[4], there are three notable junctures at which lawyers may oversee commercial transactions. They are known as; (a) the Conceptualization stage; (b) the Sustainability stage; and (c) the Completion stage.

A. THE CONCEPTUALIZATION STAGE:

This is the commencement stage of the project, it is the point where the Legal practitioners ascertain the nature of the project from a legal standpoint, it is tenable, is it permissible by law, and if true, to what extent?

In light of the above, the following are a few of the activities carried out by Legal practitioners at this stage:

1. Transactional overview:

This is when the Legal practitioner carries out a holistic overview of the project. At this point, he identifies the necessary collaborations, licenses, and operational limitations amongst other things to be obtained and observed throughout the duration of the project, whether in a short or long-term state.

1. Contractual overview:

It is no longer news that transactions cannot be sustained merely with words affirming the obligations, rights and duties of any party, to this end, commercial transactions are usually documented. The Lawyer ensures a balance of the rights and obligations of the parties as well as the compliance of fundamental terms in the contract to legal requirements. Examples of these contracts are Shareholder Agreements, Share Subscription Agreements, Pre-Partnership Agreements, and Lease Agreements amongst others.

B. THE SUSTAINABILITY STAGE:

Modern transactions have expressed beyond doubt, that Legal practitioners form a very important part of maintaining transactional credibility. Most importantly, Legal practitioners are needed to help maintain the status of the project. Take for instance, there are certain transactions which commence and at a later stage need renewal licenses, renegotiations amongst parties in light of certain economic development, regulatory change, or the need for companies to readjust their objects, dispute resolutions etc.

C. THE COMPLETION STAGE:

At this stage of the transaction, the Legal practitioner wraps up the commercial transaction. This stage could mean either of two (2) things, it could imply the renewal of the transaction, or the end of it, where theLegal practitioner conducts a final check on all the transactions. Depending on the nature of the transaction, there could be a need to conduct a post-due diligence check on the transaction to provide an overview of whether indeed it was a worthy venture.

CONCLUSION

While it is clear that commercial enterprises and innovators are the ideas behind the commencement of legal transactions, the presence of Legal practitioners in any commercial transaction is very vital in ensuring the success and sustainability of the transaction. Thus, it is key that at every step of the transaction, legal advice is sought beforehand, to provide for how unforeseen incidents may be handled.

SNIPPET

By and large, the roles acquainted with the success of commercial transactions are colossal in nature and one may wonder at what stage a lawyer fits in. Prior to highlighting these processes[5], there are three notable junctures at which lawyers may oversee commercial transactions: The Conceptualization stage, the Sustainability stage, and the Completion stage.

Key terms: Commercial transactions and the lawyer, the role of lawyers in commercial transactions, Law and commerce, strategies for commercial success.

AUTHOR: Oyetola Muyiwa Atoyebi, SAN

Mr Oyetola Muyiwa Atoyebi, SAN is the Managing Partner of O. M. Atoyebi, S.A.N & Partners (OMAPLEX Law Firm).

Mr. Atoyebi has expertise in and vast knowledge of Corporate Law Practice and this has seen him advise and represent his vast clientele in a myriad of high-level transactions.  He holds the honour of being the youngest lawyer in Nigeria’s history to be conferred with the rank of Senior Advocate of Nigeria.

He can be reached at atoyebi@omaplex.com.ng

CONTRIBUTOR: Elizabeth Ebekhile

Aria is a member of the Corporate Team at OMAPLEX Law Firm. She also holds commendable legal expertise in Corporate LawPractice

She can be reached at elizabeth.ebekhile@omaplex.com.ng

[1] Britannica- ‘Commercial Dealings’ https://www.britannica.com/topic/commercial-transaction Accessed 13th March 13th, 2023.

[2] The Chip History Center, the Virtual Museum of Semiconductors ‘The Five Business Strategies’ https://www.chiphistory.org/856-the-5-business-strategies#:~:text=Summary%20%3A%20There%20are%20only%20five,is%20the%20easiest%20to%20execute.

Accessed 19^th March, 2023.

[3] Ibid 2

[4] Emmanuel O. Olowononi, PHD ‘Commercial Transactions Law and Practice’ Published February, 2022 and accessed by me 20^th March 2023.

[5] Emmanuel O. Olowononi, PHD ‘Commercial Transactions Law and Practice’ Published February, 2022 and accessed by me 20^th March 2023.