Legal news and trends for Canadian in-house counsel and c-suite executives
Issue link: https://digital.canadianlawyermag.com/i/50888
counsel can feel a little lost in the process, especially if the company fails to identify an individual businessperson to take the lead from start to conclusion of a trans- action. In those cases, he urges counsel to advocate for the installation of such a person to take ownership of the deal. This "business lead," as McClean calls it, will take charge of the new business entity once it is brought on board. That means they will come to the table with an eye on how everything will fit together once the new business is created. The next key role for in-house counsel is acting as educator for the business team involved in the transac- tion. While counsel may assume all the players will understand what common terms like "due diligence" mean, it's important to outline exactly how it will shape the creation of transaction docu- ments and help protect the company. "It's really an exercise in educating in a straightforward way as to what the process entails, and what the benefits and risks are," says McClean. Other tips for in-house counsel new to M&A transactions include gathering knowledge — possibly from an outside law firm — on the anatomy of a deal, including materials such as asset-pur- chase agreements, non-competition agreements, transition-services agree- ments, and employment agreements. Once you have a handle on the general nuts and bolts of any deal, McClean says it is then time to key in on the specific issue most critical in the deal at hand. "Is it based on acquiring the customer base, or acquiring the assets, intellectual property — what is the core value?" he says. "So again, under- standing why this is a valuable target." Narrowing this down will allow the in-house lawyer to focus energy on the most important details of the deal. Meanwhile, O'Donoghue says it's crucial for in-house counsel to take a lead role in ensuring adequate com- munication between the deal team to reach the desired conclusion. That means establishing and enforcing a clear timetable for the transaction, a clear goal, and a risk profile. It can be an awkward position though, she says. "In-house counsel's role is a hard one in many ways, because they are the person who is marrying the business advice, the business risk, the business strategy to the legal," says O'Donoghue. "They're front and centre." At the same time, she urges in-house lawyers to refrain from trying to do too much in a transaction. Their job is to simply oversee everything that happens, she says. IH INHOUSE APRIL 2010 • 23