How are Transactional Law and Litigation Different?  

When you own a business, it always helps to work with an attorney to ensure that everything runs smoothly. In most cases, business owners are going to find themselves working with transactional lawyers primarily. The skills that a transactional lawyer brings to the table can really provide a lot of benefits to employers.

Yet even with the best planning, business owners and employees both can find themselves in need of a good litigator. Litigation is the act of taking a dispute to court, after all. It can be simple, or it can be incredibly complex. Transactional law and litigation are often intertwined, such as in cases like contract disputes, but they are also two unique fields of legal practice.

To better understand how transactional law and litigation are different from each other, we will take a closer look at each of them. Then we’ll explore a few examples of when a business owner would want to work with a transactional law attorney or a litigation lawyer.

What is Litigation?

Litigation is the process of taking a dispute to court. This may sound rather broad, and that is because it is. Many different legal fields require litigation. Everything from getting a divorce to resolving a personal injury claim is done through litigation, and those fields couldn’t be more different.

If it were a perfect world, a business owner wouldn’t have any use for litigation. However, there are many cases situations where litigation may be necessary. For example, an employee may require litigation to make things right after being wrongfully terminated. An employer, on the other hand, may require a litigator after an employee violates a non-disclosure agreement.

Litigation is far more than fighting over a dispute in the courts. This is part of litigation. However, it is actually a rather small part of litigation. Most of what a litigator does happens well before entering the courts.

Litigators spend a lot of time analyzing claims, negotiating with relevant parties, gathering evidence, investigating leads, and more. A good litigator has to also be great in the courtroom, but their skills often allow them to resolve disputes without ever entering the courtroom.

Litigation is a much more reactionary practice than transactional law. Litigators are reacting to disputes. Much of what transactional lawyers do, however, is helping to prevent disputes in the first place.

What is Transactional Law?

A transactional lawyer doesn’t focus on the courtroom the way a litigation lawyer does. Even in cases where litigation lawyers are able to bring the business to a close before entering the courtroom, the whole process is based on the act of bringing a dispute to court. Transactional lawyers aren’t interested in court; in fact, transactional lawyers spend a lot of time helping their clients to avoid court.

They do this by ensuring that their clients are abiding by the law. They help to draft contracts to ensure that all the terms are legally enforceable and that the contracts don’t leave room for exploitation. They can help with mergers, sales, and acquisitions.

Transactional lawyers are fantastic for transactions, as the name might suggest. Whenever you are involved in a major transaction, it may not be a bad idea to consider seeking out the assistance of a transactional lawyer. They’ll look over all the relevant documentation, negotiate on behalf of your and your company, and make sure that everything is in order. That way, you don’t make the biggest deal of your life only to realize a small error that opened you up to liabilities you hadn’t ever considered.

Transactional lawyers spend their time conducting research, reviewing contracts, drafting contracts, and generally advising their clients about relevant laws and regulations. The whole purpose of all of this is to help their clients to avoid litigation in the first place.

When Would a Business Work With a Transactional Lawyer or a Litigation Attorney?

Any business is going to benefit from working with a transactional lawyer. This is true whether the business is just starting or has been running successfully for many years. A new business will need to have contracts drafted, and newer business owners can benefit greatly from the advice a transactional lawyer can offer.

Older businesses, on the other hand, may not see the need for a transactional lawyer. After all, if it has been running successfully for years already, then what could a transactional lawyer offer? But just because there hasn’t been a problem so far, that is no reason to assume that there will never be one. A transactional lawyer can help to review contracts and ensure that there aren’t any glaring errors that could result in legal issues down the road.

While transactional lawyers are always useful, litigation lawyers aren’t necessary unless there is some litigation that has to be done. Litigation lawyers may be useful in commercial disputes, such as when a contract is breached. But litigation is reactionary. A tool used to settle a dispute.

Employees often have more need for litigation than businesses themselves, as litigation may be used to address wrongful termination, sexual harassment, discrimination, or other negative behaviors that employers may engage in.

It is worth noting again that these two fields can often overlap. Contract disputes are one such area. The writing and reviewing of a contract is a matter of transactional law, but resolving a contract dispute may require litigation. In a situation like this, a litigator may call on the skills of a transactional lawyer to review the relevant documentation in the case.

When Should I Approach an Attorney?

If you believe that you could benefit from the services of either a transactional law attorney or a litigation attorney, then you should reach out to an experienced attorney immediately. They will be able to help you to get a grasp on your situation.

If you are a business owner and you haven’t worked with a transactional attorney, you should consider reaching out to one sooner rather than later. It is always going to be easier and cheaper to invest resources into preventing legal issues than it will be to respond to them.