As M&A professionals (on the business side), we work very closely with our legal counterparts to get deals done. The relationship is symbiotic. Here are my top three takeaways to advance the deal while having an effective working relationship between the two functions.
๐ญ) ๐๐ป๐๐ผ๐น๐๐ฒ ๐๐ต๐ฒ ๐น๐ฎ๐๐๐ฒ๐ฟ๐ ๐ถ๐ป ๐๐ต๐ฒ ๐ &๐ ๐ฝ๐ฟ๐ผ๐ฐ๐ฒ๐๐ ๐ณ๐ฟ๐ผ๐บ ๐๐ต๐ฒ ๐ผ๐๐๐๐ฒ๐
The temptation (as a deal lead) is sometimes to move fast and get commercial terms in place before really getting legal involved. But Iโve found that on deals where Iโve slowed down to loop in the legal team early about the business goals and strategic deal objectives, we inevitably move faster down the line โ and avoid risks that could blow up later on.
๐ฎ) ๐ฆ๐ฒ๐ ๐๐ฝ ๐ฟ๐ฒ๐ด๐๐น๐ฎ๐ฟ ๐๐ผ๐๐ฐ๐ต-๐ฝ๐ผ๐ถ๐ป๐๐ ๐๐ผ ๐ฑ๐ถ๐๐ฐ๐๐๐ ๐๐ต๐ฒ ๐ฑ๐ฒ๐ฎ๐น, ๐ฒ๐๐ฒ๐ป ๐ถ๐ณ ๐ฒ๐ถ๐๐ต๐ฒ๐ฟ ๐๐ต๐ฒ ๐ฏ๐๐๐ถ๐ป๐ฒ๐๐ ๐๐ถ๐ฑ๐ฒ ๐ผ๐ฟ ๐น๐ฒ๐ด๐ฎ๐น ๐๐ถ๐ฑ๐ฒ ๐ต๐ฎ๐ ๐๐ต๐ฒ ๐ฏ๐ฎ๐น๐น
In the early stages of the deal, the corp dev / business side is doing more of the heavy lifting. As the deal shifts into drafting and legal negotiations, the lawyers are. Regardless, have at least a weekly touchpoint (and increase the frequency as the deal heats up), to update each other of the timeline, status, risks and concerns. In multiple situations, Iโve found that my legal counterpart has offered up elegant structuring solutions on issues that I had assumed needed to be resolved through entirely commercial terms.
๐ฏ) ๐๐ฑ๐ฒ๐ป๐๐ถ๐ณ๐ ๐ฐ๐น๐ฒ๐ฎ๐ฟ ๐ฟ๐ผ๐น๐ฒ๐ ๐ฎ๐ป๐ฑ ๐ฟ๐ฒ๐๐ฝ๐ผ๐ป๐๐ถ๐ฏ๐ถ๐น๐ถ๐๐ถ๐ฒ๐
Sometimes, I find the M&A / corporate development team burning cycles trying to unravel multiple clauses and definitions in legal drafts. And Iโve also found the legal team spinning when the commercial terms are unclear. Hereโs a (simplified) approach that Iโve found works effectively. The M&A deal leadโs role should fully include establishing โwhat structure do we want the legal documents to lay outโ and โwhere do we want to end up from a business perspectiveโ. The legal teamโs role should fully include structuring the language and agreements to get the deal there. And both jointly work together to negotiate the best possible structure and terms, and anticipate and plan for potential issues.