What Is A Securities Lawyer, And How Are They Paid?

You may not think about the importance of specialization for lawyers–until you need a legal specialist. Just like doctors specialize in patient care, lawyers can also specialize in areas of the law. Securities law represents the interests of clients who are buying, selling, or trading securities–such as stocks and bonds. Here is more information about securities lawyers and the services they provide their clients.

What Is a Securities Lawyer?

Security law covers a wide range of topics. In general, the laws governing securities can be split into two areas: public offerings and private offerings.

Public offerings

Public offerings are laws that deal with public companies, which are companies whose stocks are openly traded in the stock market. Public offerings can also concern privately-held companies that are seeking to go public in a transaction called an initial public offering, or IPO. When a company goes public, they offer stock in the company in exchange for money. These IPOs take time and planning, and often, securities lawyers help their clients with the paperwork involved in the IPO process. Companies who are filing paperwork for an IPO have to file paperwork with state and federal agencies, and they have to present a prospectus to governments as well as to the public.

Also, securities lawyers can help their clients with underwriting for their IPO and placement paperwork. There is a lot of paperwork involved before a company can be listed on the New York Stock Exchange (NYSE) as well as the NASDAQ (National Association of Securities Dealers Automated Quotations). In addition, many companies seek to list their stocks with global markets in London, Tokyo, and Singapore. Securities lawyers can help with all of the registration paperwork abroad as well.

Public securities lawyers don’t just represent businesses. They can also represent individual investors, banks, and other securities firms with issues related to public offerings.

Private offerings

Not all companies choose to go public. Also, there are public companies that have both public and private transactions within the same company. Private transactions might include those transactions subject to Regulation D, such as accounts payable, receivable, and business checking accounts. Other transactions fall under Regulation S, which is capital investment in businesses with money located outside the United States. Privately-held companies can choose to sell stock to investors under Rule 144A. Sometimes, private investors buy stock in a public company for less than the listed value, and securities lawyers can help with the PIPE (Private Investment in Public Equity) transactions as well. Just as in public offerings, securities lawyers can represent individuals or companies, as well as financial institutions in private offerings.

Real Estate Securities

Investing in real estate has been a hot investment vehicle for years. Securities lawyers often get involved with real estate securities as well as trusts that invest in real estate. Also, many securities lawyers handle Real Estate Investment Trusts or REITs. In a REIT, individuals and companies can invest with companies who both own and operate real estate that produces income. This income comes mainly from business or residential rentals, but it can also come from the sale of land and properties. Any part of real estate securities, such as tax laws, IPOs, mergers, and acquisitions, can be handled by a securities lawyer.

What About Corporate Compliance?

Whether a company is public or private, they are subject to regulation by the Securities and Exchange Commission (SEC). The SEC governs mergers and acquisitions, regulatory paperwork, financial disclosures, proxies, and even takeover bids, and there is often a tremendous amount of paperwork involved for a company to be in compliance. Securities lawyers are able to decipher all of the legal jargon to make sure their clients remain in compliance with the SEC. For example, if you are a board member of a publicly-traded company, and the board is considering a stock split, there is paperwork involved to get approval from the Securities and Exchange Commission.

Corporate compliance lawyers can also help sort out issues with other companies, such as conflict of interest letters, cease and desist letters, compensation for services, duties of a fiduciary, and succession to boards.

Many securities lawyers can also help with paperwork for corporate compliance in world markets. While the top two stock exchanges are located in the United States, today’s companies, both publicly and privately traded, do business around the world on other stock exchanges, such as the Shanghai Stock Exchange, the London Stock Exchange, the Euronext Stock Exchange, and the National Stock Exchange of India. Each of these stock exchanges has its own rules, regulations, and governing bodies with paperwork to fill out. Clients need to be able to rely on attorneys to negotiate around the governmental red tape to continue to grow their companies.

How Do Securities Lawyers Get Paid

Securities lawyers can get paid in a variety of ways.

Hourly rate

One of the most common ways securities attorneys get paid is through an hourly rate. Usually, when a securities lawyer meets with a client for the first time, they agree on an hourly rate. This means whenever the lawyer is working on a negotiation, letter, meeting, or on paperwork for a regulatory body, they note what they are doing for the client and how long they worked on it. These hours worked are called billable hours. Most securities attorneys will send you an invoice each month with the number of billable hours so that you can then pay it.

Often, attorneys ask for a retainer for clients before the first month’s bill comes out. Retainers are a way for attorneys to ensure that their billable hours will be paid. The size of the retainer depends on several factors, such as the years of experience the attorney has and the size of the problem.

Contingency fees

When securities lawyers represent a client, they may choose to take a contingency fee in lieu of an hourly rate. If a securities lawyer agrees to a contingency fee, the client does not pay a retainer, and they are not billed. Instead, the attorney will collect a percentage of money paid to the client in a settlement or after a civil trial. While the upfront cost for a client is lower, the amount of money paid to a securities lawyer as a contingency fee may be much higher than if a client decided to go with the hourly rate. Like hourly rates, contingency fees vary based on legal experience and the size of the problem.

Hybrid fees

Some clients and their securities attorneys agree to a mix of billable hours and contingency fees at their initial meeting.

Flat fee

In some cases, attorneys and their clients agree to an upfront flat fee for their services. This rarely occurs in securities law, but it is a possibility.

No matter how a client pays an attorney, there will be fees involved, such as filing fees, that the client must pay. Also, at the initial meeting between a securities lawyer and the client, there will be an agreement that both parties sign that outlines what the lawyer and client will provide.


Legal issues surrounding stocks, bonds, and securities exchange can be very complicated and paperwork-heavy. You need a knowledgeable securities lawyer to help you navigate the legal quagmire of financial institutions and government red tape. If you need a securities lawyer, we can help. Contact Stoltmann Law today.

Related Articles

Leave a Reply

Back to top button