This article is written by Nishtha Jain and Aniket Aggarwal, Team LawSikho.
The cliche ‘money makes the world go round’ couldn’t fit better in any other area of legal practice.
Not many know about the well-paying jobs in the field of Banking and Finance Law as it is not the most popular choice among law students and lawyers; filled with shifting sands and constant change.
But this is where everyone is wrong!
This relatively unexplored field contains more opportunities than meets the eye. Studying banking and finance could be a life-changing experience for you. Expertise in this field guarantees plenty of work which could easily fetch you anything between INR 50,000 to INR 2 lacs per month.
Don’t believe us? Let us introduce you to some facts which will help you realize how this niche field could be a turning point in your life.
Well-paying work in law firms
Banking and finance law work are usually divided into various verticals, including projects and real estate finance, structured financing, securitisation, and insolvency advisory.
After extensive stakeholder research, we found that there is no tier-1 law firm which could be termed as ‘the best’ firm for the banking and finance law. Their practices in other areas of law are far better than their banking and finance departments. There is, therefore, an ongoing requirement for lawyers who specialise in this field of law.
There are a handful of second and third-tier law firms like Phoenix Legal which perform significant work along with companies like Essel Finance.
It might interest you to know that Essel Finance, a leading private sector financial services company offering a range of services and products across corporate finance and retail sectors, can pay up to 3 lakhs rupees per assignment, depending upon the type of work!
Demand outstrips supply
Almost every arm of finance holds the requirement of legal services.
In case of issuing or availing a loan, whichever side a lawyer may represent, he must facilitate negotiating and structuring of financial arrangements to the best interests of his clients, while simultaneously conducting due-diligence.
He would also need to actively ensure compliance with respect to the entire gamut of applicable laws and regulations, across a plethora of jurisdictions, and secure the deal at the same time.
While on one hand there are very few lawyers who have dug into the BFSI sector to understand how finance works, on the other hand, there are not enough lawyers to cater to the regular requirements for this sector such as restructuring, recovery or insolvency litigation and advisory.
By specializing in Banking and Finance Law, you may make a name for yourself in the industry early on in your career.
Do remember that while a good corporate finance lawyer needs to have an intricate understanding of his subject and a tremendous ability to read the fine print, the job requires certain behavioural traits as well.
He should be capable of realizing the objectives while being able to conduct an accurate cost-benefit-risk analysis to come up with the best solutions for his clients.
You need to have a knack in understanding how financial transactions work and how money moves.
Work in established NBFCs and banks
The legal work at private banks like HDFC and ICICI pertains in many cases to coordination and appointment of litigators by the in-house counsels.
These entities work in an extremely structured environment and therefore, there will be certain norms within which you will perform your work on the inside of these organisations.
They usually end up outsourcing the litigation work to law firms or to independent lawyers and hence, if you are looking to be a litigator, this is not the choice for you.
However, if you are looking to understand the structuring and systems in a gigantic organisation, this is something you should not miss. The salary levels in such organisations are also decent.
We have already written before on how to get entrance into these organisations as a management trainee (read this).
Many banks (particularly the nationalised ones) have a panel of lawyers with which they prefer to work. They invite applications for joining their panel and the criteria for this is provided in the invitations.
For instance, see here – this is a request for applications for empanelment of advocates by the State Bank of India.
If however, you have been doing some work such as recovery for a particular branch of a bank and have a certain comfort level with the bank officials, this can definitely help you to get empanelled.
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NBFCs where legal work is a revenue centre
You must have heard about lending companies such as IDFC and Edelweiss. They hold the fort at the pinnacle of development lending, but guess what?
A large portion of their revenue stream derives stability not from their lending business, but from the skills and dexterity of their legal teams!
In certain transactions involving massive diligence and compliances, the in-house legal teams function as a seamless law firm in themselves.
Needless to say, the level of knowledge required to function in such an environment is not only arduous to acquire but also handsomely rewarded.
Take Piramal Capital, for instance. Possessing a legal department which operates as a revenue centre by itself is one of the factors why the firm has a valuation worth more than INR 10,000 crores.
These teams push frontiers and drive innovation; their importance has been recognised by giants like Reliance, which is currently seeking to launch India’s biggest FinTech venture with Piramal.
Would you want to work there? Do you have the skills to do so?
Work with unicorns and their lenders
A ‘unicorn’ startup or ‘unicorn’ company is a privately held company with a valuation of over $1 billion.
As of May 2020, there are a little above 400 unicorns around the world.
Another popularly used term ‘decacorn’ refers to a private firm valued at over $10 billion, while a ‘hectocorn’ is valued at over $100 billion.
Most of these ‘unicorn’ companies are driven by lending from large corporates such as the Japanese SoftBank whose investments have been instrumental in setting up a number of major Indian e-commerce companies.
According to a 2018 BCG Report, the digital lending market in India is expected to hit a valuation of 1 trillion dollars by 2023. Even among these, the fintech entities stand massive scope considering that investment will become an important source of income as the primary sources of income dwindle.
Further given the movement restrictions currently and possibly later as well, technology entities will always have an edge over the brick and mortar ones.
Just have a look at Paytm!
Starting as a small digital wallet in 2010, it has grown to be one of the top 10 unicorn companies across the globe, valued at a massive USD 16 billion. Today, it offers such a huge range of services that it essentially acts as a shopping mall and bank inside your phone.
Alongside other companies such as PhonePe and Billdesk, the financial technology sector was a major source of FDI in 2019.
The fact that the attention of market behemoths such as Jack Ma’s Alibaba and Warren Buffet’s Berkshire is focused on these ventures is testament to their growth and commercial potential.
Can you imagine the surge of legal work that would accompany such an exponential jump?
The sheer turnout in terms of diligence, contracting and licensing?
Fintech unicorns will have innumerable legal compliances due to which a lawyer would be required, and they are bound to look favourably upon hiring persons having expertise in banking and financing law.
Who wouldn’t want their legal issues solved at a one-stop-shop, that too located inside the company?
And why wouldn’t you like to be that person?
Why should you opt for a specialisation in Banking and Finance Law?
- The banking and financial law sector is not like any other area of law where a simple knowledge of procedure and precedent is enough. It is somewhat technical and owing to a constantly shifting landscape, more challenging as well. Not many people actually get it. This does not mean that they can’t get it. They just haven’t found the right guidance yet! Specialising in banking and finance law can give you a big edge right away, putting you far ahead of the already dwindling competition.
- The nature of legal work in banking and finance is one that requires a combination of research, drafting, advisory and litigation. This combination is not easily available and when you manage to acquire and master it, you will never be short of work.
- The rapidity with which India’s fintech sector is growing is a phenomenon to behold. With the COVID-19 crisis and the push towards digitisation, the only way for it to go is up! This complex and continuously evolving landscape will be in the palm of your hand if you possess expertise in banking and finance law.
- People tend to assume that they need proficiency in quantitative skills to undertake banking and finance work. Thus, believing it to be onerous, they may avoid its study. This belief is highly misplaced! Like any other field of study, a robust conceptual understanding in law combined with an awareness of recent developments will turn you into a professional whom clients clamour for.
- Banking and finance work can never go out of vogue. From capital transactions and loan agreements during a period of ‘boom’ in the economy to debt structuring and recovery litigation during periods of recession, the stream of work in banking and finance law can never dry up.
Want to specialize in banking and finance laws?
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Looking for a free career consultation? Give us a call on 011 4084 5203 or comment below to this article, with your phone number, stating “I want to specialize in banking and finance laws.” We will get back to you urgently.
To your success.
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