The Role of a Mergers Attorney: Key Responsibilities and Expertise
Businesses collaborate for various reasons, such as boosting profits or expanding goods and services. When these partnerships lead to a merger or acquisition, M&A attorneys are responsible for the legal aspects of this process.
They must conduct due diligence to determine if the deal is financially sound for their clients and identify any legal risks. Below are some of the key responsibilities and expertise of an M&A lawyer:
Drafting Agreements
M&A attorneys draft the legal documents that govern a deal. It can include letters, term sheets, contracts, opinions, registrations, and government applications. Drafting is often done by a team of mergers attorney denver, including partners and associates at the firm and other attorneys from outside firms who are brought in for the M&A work.
M&A lawyers also prepare for negotiations. It includes developing negotiation strategies that align with the client’s business interests and assessing legal risks and opportunities.
In addition, the lawyer will conduct due diligence on the other party. It involves investigating the assets and operations of the company to identify potential risks related to past law compliance, contracts, financial performance, and more. This research helps the attorney make an informed decision about whether to pursue the transaction. Also, the attorney will determine if the deal has tax implications and if unique structuring is required. M&A lawyers will also work with other attorneys who specialize in taxes, intellectual property, environmental, and employment law to ensure a smooth transaction process.
Conducting Due Diligence
You can apply the principle of due diligence to many decisions in life, from weighing costs versus benefits when choosing a restaurant or vacation spot to evaluating your career options and assessing potential risks. Conducting thorough due diligence is essential to your work as a legal professional.
When companies are ready to merge or acquire, they must conduct due diligence to ensure the transaction is a good idea. Wright explains that this involves an intense review of the target company’s records, contracts, and other information—including regulatory compliance issues, past litigation and settlement agreements, and even employee-related details like severance packages and golden parachutes.
The due diligence process requires a team of lawyers, sometimes several of them, to review and analyze the information. A thorough due diligence review can take weeks, encompassing everything from financial reports, environmental reports, supplier contracts, and more. An expertly honed due diligence process can provide the confidence and comfort needed to proceed with the transaction.
Negotiating
In many instances, the successful completion of a merger or acquisition involves a significant amount of negotiation. M&A lawyers must negotiate with opposing counsel, business executives, other law firms, regulatory agencies, and other professionals to ensure the terms of a deal meet desired goals and timeframes.
A reasonable attorney should have a deep understanding of both legal and business practices. The ability to understand and work with diverse people is critical. It is especially true because attorneys in this practice area often deal with people from industries as varied as oil refineries and retail clothing store outlets.
Large corporate and private law firms employ M&A attorneys. They spend much of their workday on computers reviewing and drafting documents, e-mailing clients and team members, and traveling for meetings and court appearances. Those interested in becoming M&A lawyers should prepare for this career path by completing a bachelor’s degree, getting work experience, and earning high scores on the LSAT.
Managing the Closing
A mergers attorney takes on an advisory role from the beginning of the process and works with other lawyers, accountants, and executives, sharing progress updates and watching for red flags that could delay or derail a deal. They’ll also line up the needed financing and corporate structures. They may be responsible for obtaining regulatory approval and working with antitrust attorneys to assess whether or not a transaction meets legal requirements.
They’ll negotiate purchase terms and conditions per their client’s business objectives. They’ll also determine if an offer is in their client’s best interest by identifying liabilities or areas of opportunity that impact the company’s value.
M&A attorneys can work either in-house or as specialists in outside law firms. They must thoroughly understand federal and state laws related to taxation, labor and employment, environment, real estate, intellectual property, and finance. They must also be familiar with international regulations.
