Mergers and acquisitions can be complicated undertakings. And if you are going to work with an outside law firm, it’s important that you find one who has experience in mergers and acquisitions. You want your lawyer to know the laws and have the connections necessary for this type of transaction because they will be working closely with both sides of the acquisition process. Below are the top seven reasons to use a lawyer for mergers and acquisitions.
1. Knowledge of Legal Aspects
Mergers and acquisitions are legal endeavors. There are contracts to negotiate and laws that must be followed. When it comes to merger and acquisition law, experience speeds up the process and helps make the transaction much smoother overall.
A merger or acquisition lawyer is familiar with the latest merger and acquisition law changes and what laws are most commonly used. They also know the latest terminologies and how to use them in legal documents.
2. Negotiation Experience
During a merger or acquisition, the contract is only part of the process. Many negotiations take place behind closed doors before everything is finalized and put down on paper. A lawyer has experience with this type of negotiation, which can speed up the entire process by knowing where to start first, what information needs to be gathered from each party, and putting forth options for both sides during negotiations. Hence, they feel like they hold some power in the transaction.
3. Valuable Contacts
A lawyer knows people who can help with a merger or acquisition process, such as accountants, financial officers, and business development experts. There are many different professionals that you will need on your side when undertaking the merger or purchase of a new company, and by using an experienced lawyer for mergers and acquisitions, they can recommend other professionals to ensure that each aspect is covered to the last detail before going public.
4. Provide Documents
One of the most important aspects of a merger or acquisition process is having all necessary documents in order. Lawyers can prepare and draft all necessary documents, such as non-disclosure agreements, confidentiality agreements, employment contracts, consulting agreements, vendor contracts, purchase/sale agreements on assets being purchased or sold from one company to another, indemnity agreements, dissolution of companies articles/bylaws and so forth. All businesses should keep these on file just in case certain disputes arise in the future.
5. Review All Contracts
A lawyer can offer a second opinion and review any contracts that are drawn up. This is important because they know what to look for to ensure all parties are well protected no matter which side of the transaction you may be on. Sometimes, even when both sides have agreed upon a contract, neither one realizes certain parts are not legally binding until an outside party reviews it. Lawyers can quickly pick up on potential problems that may arise after the documents have been finalized and signed by both companies involved. It helps keep everyone out of trouble later down the road if there is ever a problem with anything being said or done during merger or acquisition proceedings.
6. Litigation Assistance
Lastly, if litigation becomes necessary either at the end of a contract or when something goes wrong, both parties have legal representation to go against the other party. You have someone who is legally trained and experienced in this type of process. Litigation can become very complicated, so having a lawyer on your side will ensure that everything is handled correctly and fairly, no matter how things are decided. An experienced attorney knows how to handle all aspects right down to motions, interrogatories (written questions used by lawyers during discovery), trial preparation and research, etc.
In 2019, the value of M&A transactions in the United States was about $3.7 trillion across 49,500 deals. This figure is expected to increase in the coming years. As a result, businesses are finding merger and acquisition processes to be more complex than ever before, making hiring an experienced attorney all the more important. A commercial business lawyer can ensure that every detail is covered from start to finish and provide guidance throughout the entire process.