Lesson #4 – The Importance of Legal Council
We have shared our insights on timing, people, and finance so far in our Lessons Learned series.
Legal Council and a Successful Merger
Our fourth lesson topic on what creates a successful merger or acquisition is legal documentation and counsel.
We know that most companies run on legal contracts. The contracts define the boundaries and relationships your company has with so many other individuals and agencies, from landlords to suppliers to employees.
That’s exactly why understanding those contracts is critical in a transaction, especially long-term contracts like a lease. A buyer may have to live with the terms of a lease for up to 10 years, so they will check all major contracts.
Ensuring that your contracts are clear, available, and in good order gives you a solid foundation for an efficient and successful M&A process. In addition, contracts with customers (e.g., subscription services or memberships) create value for a buyer.
The Right Resources
In order to be certain that contracts are well understood, the right resources are required. Having the correct lawyer on the team is critical. This is not a time for your counsel to be learning the ropes. Stage Left will negotiate the business terms of the deal. Your M&A lawyer must have the skills, expertise, and ability to properly represent these terms in the definitive sale agreements and work constructively with the legal counsel on the other side of the transaction.
The big message is that you need to have the right lawyer with the appropriate mergers and acquisition experience in place. Qualified legal counsel can oversee the transaction and protect your interests while making certain that obstacles are either overcome or efficiently managed.
Your lawyer needs to clearly understand your objectives and work hard to get the transaction completed while still protecting you.
Luckily, we have a deep bench to draw on if necessary. Stage Left Partners Ltd. has worked with many different lawyers and can help you find one that has the appropriate experience if your current team does not have an M&A specialist.