Best Practices in Transaction Management

In the midst of a transaction, your legal team should hit “The Zone” ' that method of working where information flows without effort and people understand and seamlessly implement their roles. A team operating in this manner is a powerful machine that can be instrumental in getting you the best possible results in a transaction that may be pressurized by timetable and other commercial considerations.

In this article we explore some key factors for best practices in transaction management from the perspective of external counsel working alongside you and your in-house team. We also highlight some behaviors that you may find helpful for you and your external counsel to adopt, and suggest some practical tips that we have found will lead to transactions progressing as smoothly and as cost effectively as possible.

Effective Communication

Methodology: From the outset of a transaction your external counsel will need to understand how you communicate: who you like to keep copied on e-mails, whether you have a preference for in-person meetings, video conferences or conference calls, and who you wish to attend such calls or meetings. Your outside counsel must ensure that e-mail content is tailored appropriately to the recipient ' for example, people on the business side of your organization may have little appetite for lengthy and technical points to be spelled out in detail. The potential for litigation or other disputes among the parties should also be considered in all written communications.

An initial kick-off meeting in person with all the key members from the business and legal teams (both in-house and external) is a critical first step in forging initial relationships and opening lines of communication that will be developed as the transaction progresses. Ask your external counsel to prepare and keep updated a “working party list” that includes all individuals from the various organizations who may be involved in the matter.

Information Flow: An effective model for external counsel to operate the transactional team is as a hub and spoke, whereby one member of the team (usually a mid-level associate) is appointed as the “points person” who will continuously liaise with the members of the broader team and will be able to provide you with an update on progress at any given point. The points person should also ensure that the appropriate information is disseminated to the correct people and in the agreed-upon format.

When you are liaising directly with specialists or foreign lawyers, it is helpful if the points person participates in the conversations so that your time is not wasted on matters that can be dealt with by external counsel (e.g., providing the necessary documents and any initial briefing) and so that the appropriate people can be updated and follow-up points dealt with.

Availability: External counsel being available 24/7, responding promptly to messages and ensuring that the transaction progresses in a timely fashion is expected not only by you, but also by the other parties involved in the transaction process.

All team members should be aware of any time differences between jurisdictions as well as local public holiday dates. External counsel should be alert to and highlight to you the likely pressure points in the transaction timetable (for example, the dates around required internal or third party approvals and dates and times when documents need to be signed) so that all parties can ensure the correct people are available when required, especially as critical deadlines approach. It is helpful if you can let your external counsel know the availability of key members of your transactional team.

Driving the Process

External counsel must understand your motives for pursuing the transaction, and that of the other parties involved, in order to implement the transaction as effectively as possible.

Planning: Appropriately scoping the transaction at the outset is generally time well spent. External counsel must ensure that the matter is appropriately staffed and that the necessary specialists and local counsel are on board and properly briefed in advance ' although laborious and time-consuming, this will ultimately save you time and cost throughout the process. It will also greatly assist the process of anticipating and addressing issues in advance.

Your external counsel should ensure that any specialist or local counsel either invoice you directly, or that their fees appear on your main external counsel's bill as a disbursement. Where bills are being produced separately, request that you are kept up to date on both external counsel's time and any additional specialist or local advice that is not included on external counsel's bill.

Timeline: From the initial stages, business teams will often have agreed upon a broad transaction timetable with a desired timeframe for implementation. Although both in-house and external counsel will be called upon to comment on the timetable, and will have particular input on any technical legal timing points, it is not always the lawyers who will dictate the key dates for the process. However, unrealistic or unachieveable deadlines can be very damaging to the transaction process, as missed deadlines lead to inefficiency and additional cost, and can destroy the trust and goodwill that will have developed throughout the transaction.

Wherever possible, set achievable deadlines that all parties have agreed to. External counsel should produce a detailed transaction timetable to ensure that all parties are on the same page. This will also help ensure that there is absolute clarity on the timetable in which the matter is being implemented.

Checklists: These are likely to be used at various points of the transactions ' e.g., summarizing due diligence information, highlighting outstanding points on documents or in preparation for closing. Checklists and information presented in a tabular format are in many situations the easiest and most effective method of processing such information and will often assist non-lawyers in disseminating the key points and establishing the risk profile on a transaction.

Counsel often seek to produce a checklist for every situation, and you should be alert to ensuring that checklists do not repeat or unduly overlap with other checklists used in the transaction. It is confusing and inefficient to have too many similar checklists in circulation.

Managing the Team

External counsel must ensure that the right people are doing the right job at the right time by managing the transaction team effectively.

Teamwork: Teams tend to work best in an atmosphere of mutual trust and respect and where information is shared among team members: a culture in which getting to the right result prevails over attributing blame for any actual or perceived errors. This includes between you and your external counsel and within external counsel's organization. You will be aware whether individuals at your external counsel are working together ' dysfunctional and non-communicative teams tend to lead to work being repeated and general inefficiency ' which will ultimately lead to greater cost.

In some cases it may seem that lawyers will revert to you for instructions in every circumstance ' however minor ' but external counsel should use this process to guide the transaction and the various work streams being progressed. One common and effective method when you are not able to input on every decision is for you to give authority to your external counsel to agree to mutually acceptable positions on certain points with the other parties involved, based on the external counsel's understanding of your position and risk appetite. The external counsel will then revert to you for your input and confirmation on each of the points reached.

Delegation: In a complex matter, the only way to achieve operational effectiveness is for external counsel to delegate tasks within the transaction team. They must ensure that all team members have a clear direction and a sense of the common goal and understand the objectives and background to the transaction.

Involving all team members, including junior lawyers, from the outset is advantageous to the progression of the transaction as duplication of multiple instructions is avoided. Although your contact and focus is more likely to be with senior members of your external counsel, the junior lawyers will often have a key role to play, especially in completing the more basic but time consuming tasks. External counsel can manage cost effectively by using junior lawyers where possible.

Responsibility: It is important for you and your external counsel to understand who is responsible for each task. Where you have in-house capability or expertise to utilize, or have a preference to use certain individuals at specialist or local counsel, ensure that your main external counsel is aware of this and linked in to the appropriate people ' otherwise they may incur cost and expense in obtaining this advice elsewhere.

Any transaction checklist should allocate responsibility both to the organization and to the individuals within that organization so that tasks are completed effectively and on time. Ask external counsel to keep the checklist updated and circulated regularly so that it is an easy reference point for progress on the transaction.

Feedback: It is incredibly helpful to have both an internal and external feedback process at the end of a transaction. Honest and constructive feedback can assist information flow and enhance productivity, and enable future transactions to become more efficient by highlighting and solving any issues that arose during the course of previous transactions.

Consider providing ongoing informal feedback to your counsel throughout the transaction process ' for example providing an update as to e-mail recipients or working methods ' as this should help your transaction team to work even more cohesively, which will ultimately result in a better and more cost effective product being delivered to you.

Conclusion

The critical importance of effective transaction management to the successful implementation of a transaction will be apparent to both in-house and external counsel involved in the process. It goes beyond getting the transaction to the finish line to being a positive factor in achieving the best possible outcome. Therefore, the ability to successfully manage transactions, particularly complex multi-jurisdictional transactions, should be a significant determinant in your selection of external counsel.

Matthew F. Herman is a partner and Richard Burrows an associate in the corporate department of Freshfields Bruckhaus Deringer's New York office. This article is adopted from the “Transaction Management Toolkit” ' a series of internal Freshfields Bruckhaus Deringer presentations.

In the midst of a transaction, your legal team should hit “The Zone” ' that method of working where information flows without effort and people understand and seamlessly implement their roles. A team operating in this manner is a powerful machine that can be instrumental in getting you the best possible results in a transaction that may be pressurized by timetable and other commercial considerations.

In this article we explore some key factors for best practices in transaction management from the perspective of external counsel working alongside you and your in-house team. We also highlight some behaviors that you may find helpful for you and your external counsel to adopt, and suggest some practical tips that we have found will lead to transactions progressing as smoothly and as cost effectively as possible.

Effective Communication

Methodology: From the outset of a transaction your external counsel will need to understand how you communicate: who you like to keep copied on e-mails, whether you have a preference for in-person meetings, video conferences or conference calls, and who you wish to attend such calls or meetings. Your outside counsel must ensure that e-mail content is tailored appropriately to the recipient ' for example, people on the business side of your organization may have little appetite for lengthy and technical points to be spelled out in detail. The potential for litigation or other disputes among the parties should also be considered in all written communications.

An initial kick-off meeting in person with all the key members from the business and legal teams (both in-house and external) is a critical first step in forging initial relationships and opening lines of communication that will be developed as the transaction progresses. Ask your external counsel to prepare and keep updated a “working party list” that includes all individuals from the various organizations who may be involved in the matter.

Information Flow: An effective model for external counsel to operate the transactional team is as a hub and spoke, whereby one member of the team (usually a mid-level associate) is appointed as the “points person” who will continuously liaise with the members of the broader team and will be able to provide you with an update on progress at any given point. The points person should also ensure that the appropriate information is disseminated to the correct people and in the agreed-upon format.

When you are liaising directly with specialists or foreign lawyers, it is helpful if the points person participates in the conversations so that your time is not wasted on matters that can be dealt with by external counsel (e.g., providing the necessary documents and any initial briefing) and so that the appropriate people can be updated and follow-up points dealt with.

Availability: External counsel being available 24/7, responding promptly to messages and ensuring that the transaction progresses in a timely fashion is expected not only by you, but also by the other parties involved in the transaction process.

All team members should be aware of any time differences between jurisdictions as well as local public holiday dates. External counsel should be alert to and highlight to you the likely pressure points in the transaction timetable (for example, the dates around required internal or third party approvals and dates and times when documents need to be signed) so that all parties can ensure the correct people are available when required, especially as critical deadlines approach. It is helpful if you can let your external counsel know the availability of key members of your transactional team.

Driving the Process

External counsel must understand your motives for pursuing the transaction, and that of the other parties involved, in order to implement the transaction as effectively as possible.

Planning: Appropriately scoping the transaction at the outset is generally time well spent. External counsel must ensure that the matter is appropriately staffed and that the necessary specialists and local counsel are on board and properly briefed in advance ' although laborious and time-consuming, this will ultimately save you time and cost throughout the process. It will also greatly assist the process of anticipating and addressing issues in advance.

Your external counsel should ensure that any specialist or local counsel either invoice you directly, or that their fees appear on your main external counsel's bill as a disbursement. Where bills are being produced separately, request that you are kept up to date on both external counsel's time and any additional specialist or local advice that is not included on external counsel's bill.

Timeline: From the initial stages, business teams will often have agreed upon a broad transaction timetable with a desired timeframe for implementation. Although both in-house and external counsel will be called upon to comment on the timetable, and will have particular input on any technical legal timing points, it is not always the lawyers who will dictate the key dates for the process. However, unrealistic or unachieveable deadlines can be very damaging to the transaction process, as missed deadlines lead to inefficiency and additional cost, and can destroy the trust and goodwill that will have developed throughout the transaction.

Wherever possible, set achievable deadlines that all parties have agreed to. External counsel should produce a detailed transaction timetable to ensure that all parties are on the same page. This will also help ensure that there is absolute clarity on the timetable in which the matter is being implemented.

Checklists: These are likely to be used at various points of the transactions ' e.g., summarizing due diligence information, highlighting outstanding points on documents or in preparation for closing. Checklists and information presented in a tabular format are in many situations the easiest and most effective method of processing such information and will often assist non-lawyers in disseminating the key points and establishing the risk profile on a transaction.

Counsel often seek to produce a checklist for every situation, and you should be alert to ensuring that checklists do not repeat or unduly overlap with other checklists used in the transaction. It is confusing and inefficient to have too many similar checklists in circulation.

Managing the Team

External counsel must ensure that the right people are doing the right job at the right time by managing the transaction team effectively.

Teamwork: Teams tend to work best in an atmosphere of mutual trust and respect and where information is shared among team members: a culture in which getting to the right result prevails over attributing blame for any actual or perceived errors. This includes between you and your external counsel and within external counsel's organization. You will be aware whether individuals at your external counsel are working together ' dysfunctional and non-communicative teams tend to lead to work being repeated and general inefficiency ' which will ultimately lead to greater cost.

In some cases it may seem that lawyers will revert to you for instructions in every circumstance ' however minor ' but external counsel should use this process to guide the transaction and the various work streams being progressed. One common and effective method when you are not able to input on every decision is for you to give authority to your external counsel to agree to mutually acceptable positions on certain points with the other parties involved, based on the external counsel's understanding of your position and risk appetite. The external counsel will then revert to you for your input and confirmation on each of the points reached.

Delegation: In a complex matter, the only way to achieve operational effectiveness is for external counsel to delegate tasks within the transaction team. They must ensure that all team members have a clear direction and a sense of the common goal and understand the objectives and background to the transaction.

Involving all team members, including junior lawyers, from the outset is advantageous to the progression of the transaction as duplication of multiple instructions is avoided. Although your contact and focus is more likely to be with senior members of your external counsel, the junior lawyers will often have a key role to play, especially in completing the more basic but time consuming tasks. External counsel can manage cost effectively by using junior lawyers where possible.

Responsibility: It is important for you and your external counsel to understand who is responsible for each task. Where you have in-house capability or expertise to utilize, or have a preference to use certain individuals at specialist or local counsel, ensure that your main external counsel is aware of this and linked in to the appropriate people ' otherwise they may incur cost and expense in obtaining this advice elsewhere.

Any transaction checklist should allocate responsibility both to the organization and to the individuals within that organization so that tasks are completed effectively and on time. Ask external counsel to keep the checklist updated and circulated regularly so that it is an easy reference point for progress on the transaction.

Feedback: It is incredibly helpful to have both an internal and external feedback process at the end of a transaction. Honest and constructive feedback can assist information flow and enhance productivity, and enable future transactions to become more efficient by highlighting and solving any issues that arose during the course of previous transactions.

Consider providing ongoing informal feedback to your counsel throughout the transaction process ' for example providing an update as to e-mail recipients or working methods ' as this should help your transaction team to work even more cohesively, which will ultimately result in a better and more cost effective product being delivered to you.

Conclusion

The critical importance of effective transaction management to the successful implementation of a transaction will be apparent to both in-house and external counsel involved in the process. It goes beyond getting the transaction to the finish line to being a positive factor in achieving the best possible outcome. Therefore, the ability to successfully manage transactions, particularly complex multi-jurisdictional transactions, should be a significant determinant in your selection of external counsel.

Matthew F. Herman is a partner and Richard Burrows an associate in the corporate department of Freshfields Bruckhaus Deringer's New York office. This article is adopted from the “Transaction Management Toolkit” ' a series of internal Freshfields Bruckhaus Deringer presentations.