Tips for Creating a Successful M&A, From the Mouths of Legal Leaders

It’s not everyday that I get to sit in an audience filled with some of the brightest legal minds in the bay. But last Wednesday I did. At CLO, five legal leaders shared their thoughts and advice for more successful M&As.

Mergers and acquisitions present a unique set of challenges for an organization. One of the biggest deals that can be made, one would think it would be all hands on deck to ensure the deal goes off without a hitch and the company doesn’t run into any compliance or risk issues. Yet, as I learned at Argyle’s Chief Legal Officer Leadership Forum (CLO) last week, Legal is often left out of the conversation until late in the game. A mistake. Legal can bring a lot to the table when it comes to M&As. Here’s how.

Sarah Bradley, General Counsel at Campari America, said, “Every contract clause is a battle scar. You learn from your mistakes.“ What did she mean?

Legal has a wealth of institutional knowledge—an intimate understanding of the history of the organization, making them invaluable when it comes to the ability to bridge the gap between the business strategy and legal. Bringing your Legal team into deals early allows them to think of the big picture—risk, resources, and implications, making planning easier and more comprehensive.

Included from the outset Legal will also be well-informed, able to better structure the deals, and come up with creative solutions to complicated problems that may otherwise slow progress and create ripples in the relationship.

Process Pain Points

Arduous contracting process, likely the reason Legal is often left out of important conversations, can create bottlenecks and visibility concerns that can slow deals down and create risk. Here are three ways contract management platforms can simplify the M&A process, keep costs down, and position Legal as business enablers.

Negotiate

Bringing in a contract management platform with online, in-platform negotiation, akin to how internal teams use Google Docs to work together, increases collaborative efforts, allowing all parties to work on a contract at the same time—making comments and edits, while all changes and suggestions are tracked and time stamped with who made the change. Not only does this strengthen business relationships by creating a smooth negotiation process, it alleviates version control issues, taking emails out of the equation.

For M&As, having a single source of truth for every document and a secure, streamlined way to share information and negotiate terms can help avoid risk and compliance issues.

Sign

As legally binding as pen and ink, enabling parties to sign documents electronically, can move the contract along the approval process quickly and makes getting agreements easier. A CLM platform ensures that throughout the contract process the correct people will be notified at the correct points, automatically.

Management

A key focus in creating more successful M&As—relationships. Building trust before the deal, setting expectations during conversations and negotiation, and delivering on promises can go a long way toward a successful negotiation and integration—David Le, Managing Counsel, Corporate and Commercial at Lyft, made a comment that, “M&As live and die by the integration and how successful it is – be it talent, tech, etc.,” stating, “integration has to start b4 the deal closes.”

A contract isn’t just a document or an agreement, it’s a relationship. Contracts define expectations, generate revenue, and build security. They’re the blueprint for a company’s future. A central repository, connecting all documents, people, and processes in one place, a contract management platform makes it easier to build and manage business relationships, while providing a level of visibility into an organization’s contract portfolio that is otherwise unachievable.

When it comes to a successful Merger or Acquisition being proactive is key, which means having efficient, effective contract management processes in place, a clear strategy, and including Legal in the conversation from the start. A contract management platform, through advanced capabilities—templates, the above mentioned online negotiation, approval workflows, and deadline alerts—creates a recipe for repeatable success.