Mergers and acquisitions are, by their very nature, a complex legal process. Therefore, before considering embarking on an M&A, it is critical that you engage the services of an experienced M&A Lawyer. Because the process of merging with, acquiring or selling a business is vastly different to other areas of law, the factors you consider when choosing a legal firm will vary as well.
- Here are some key questions to ask when choosing a lawyer for your merger or acquisition.
If you are considering selling your business, before you start the M&A process, your company should first be assessed for sale. Potential buyers will be looking at every area of your business with a fine-tooth comb, so you need to ensure that any technical legal matters that impact your company’s operations are addressed now. Failing to do so will expose you to the risk of litigation in the future, and cost you more time and money in the long run.In your initial consultation with your lawyer, ask them if their services include doing a “legal health check” beforehand. A good lawyer will alert you to any areas of concern and prepare you before even beginning to look for a transaction partner.
- What kind of experience does the lawyer have?
While years of experience can be used to judge a lawyer’s calibre, a better yardstick is to ask them how many M&A transaction they have handled and how regularly they do so. Depending on your particular situation, you may also want to ask more questions such as:
- What is the total value of transactions the practice has advised on?
- What is the average transaction value?
- What is the target value range of clients they advise on? (Ask about the smallest and largest as well)
- How many transactions have they advised on in your specific industry? (This is particularly important if your business is in a highly-regulated industry such as oil or gas.
Depending on the legal firm, your lawyer may also be supported by a team of financial, tax and IP lawyers who are similarly experienced with mergers and acquisitions. This ensures all aspects of your transaction will be considered.
- Can the lawyer represent me competently and confidently in front of the opposing board of directors?
Your M&A lawyer will be your legal face when dealing with the other party, and it’s important that they present their case in a knowledgeable and confident manner. In any legal transaction, but in mergers and acquisitions in particular, there will be many complexities, disagreements and discussions. You must be able to trust your lawyer to navigate these issues and manage the expectations and reactions of the opposing board of directors.This is a skill which comes with time, which is another reason your lawyer’s experience is crucial when making your decision. A M&A lawyer who has handled multiple transactions of a similar nature will be able to anticipate problems and concerns more easily, and have the tools to negotiate these impasses.
- Does the firm manage the entire M&A process to completion?
In order to ensure you are covering all potential areas of risk when choosing a M&A lawyer, we recommend asking specific questions about the transaction process and what services the firm will be providing. This can include questions such as:
- Does the firm coordinate the Q&A process to maintain protocols, confidentiality, accuracy and documentation, in addition to providing feedback and advice?
- Will they coordinate and attend inspections and other meetings?
- Will they make recommendations and suggestions based on those inspections and meetings?
- Will they assist with the negotiation of any warranties, indemnities and guarantees?
- Will they coordinate and facilitate the process of the due diligence process?
- How will they assess the strategic fit of all parties?
- What value drivers will they focus on to improve the price negotiations?
- Does the firm understand how the different working capital requirements will interact and will they map this out for you?
There are a number of other questions you will want to ask your potential M&A lawyer regarding their practices around client confidentiality, team structure, and communication methods – all of which can, and should, impact your decision. Contact the team at AV Lawyers today to arrange a free consultation regarding your upcoming merger or acquisition.