Taking the Local

Lawyers looking to maximize their M&A leverage need to keep one person (after their client) in mind above all: local counsel.

How Should Global M&A Work With Local Counsel

Jason Quintana

September 11, 2018 02:44 PM

With Global mergers-and-acquisitions activity for 2018 (aggregate deal value and volume alike) on pace to meet or exceed that of the last two years, and with 22 to 24 percent of all deals annually since 2010 involving a cross-border acquirer and target, M&A lawyers have increasingly had to turn to legal experts in foreign jurisdictions for advice to get their deals and clients from transaction formulation through closing. Amid all this deal activity, we take a pause to set out a few reminders and some lessons we’ve learned working with local counsel—whether “local” means a colleague in your firm or an unaffiliated practitioner—to help you get the best possible deal for your client efficiently, seamlessly, and on time.

Know Your Client—and Your Client’s Expectations

Before you so much as pick up the phone to discuss a deal opportunity, be sure you know what your client expects in terms of your role and your interactions with local counsel. Does your client expect you to act as a quarterback of sorts, leading that interaction, or will your client engage directly with local counsel?

Likewise, does your client want you to “translate” why U.S.-style M&A terms and conditions that they’re accustomed to are off-market in the relevant jurisdiction? Our experience is that most clients expect some form of this quarterback/translator approach. Adhering to it enables us to flag material issues and coordinate with local counsel early in the process; it also allows us to consume local counsel’s work-product and triage for the client so that any issues raised by local counsel can be included in the broader deal negotiations and documentation. When it comes to working with local counsel, beware the laissez-faire approach.

Know Your Local Counsel

Like you, your local counsel has a number of demands competing for his or her time. As such, we’ve found that understanding those demands, and how local counsel handles them, breeds an improved working relationship and often leads to better results. For example, is your local counsel a fellow partner at your firm who has an independent book of business and is just helping you out? Or is he or she focused primarily on referrals from other offices in your firm (or firms around the world) to do the very thing you’re asking for? The incentives look quite different for these two hypothetical local counsels. The challenge is to navigate those incentives so you can move quickly to provide world-class work and advice on your deal. Tools at your disposal for this task range from frequent light-touch phone calls for updates to helping your local counsel build up his or her professional network after the deal is done.

Communication Is (Always) Key

That isn’t news to M&A specialists, but given language barriers, time zones, and practices’ varied customs and cadences, extra care will pay dividends. Some pointers to ensure good communication:

  • Take the time to discuss the exact scope of the work: What are your and your client’s expectations for timing, work-product, fees, and engagement with counterparties and other third parties?
  • Provide feedback and updates. We find that regular calls or meetings with local counsel help keep him or her involved in the deal, identify hiccups early, and, in general, boost the relationship. Although it’s sometimes unavoidable, the last-minute request to local counsel for, say, a markup of relevant portions of a purchase agreement engenders ill will and often leads to delay—or, if you’re lucky enough to receive a timely markup, it might well be a sub-optimal piece of work.

One last thing to remember: Nine times out of 10, you haven’t done your job communicating with your local counsel if all you’ve done is send a few emails. Picking up the phone, whether for a five-minute chat or a substantive discussion, often leads to further insights that will inform your advice to your client.

Why it All Matters

Although many of these steps might seem obvious, in our experience many practitioners aren’t great partners with their local counsel, and this failure results—at minimum—in inefficiencies of process and transaction management. Likewise, if you’ve chosen your local counsel carefully, you should assume (if it isn’t already evident) that he or she is a repeat player in the relevant market, with the relevant skills, for which he or she was retained.

As a result, just because you and your client are availing yourselves of your local counsel’s services this time around, don’t assume he or she won’t be a consumer of (or have a relationship with someone who will be a consumer of) your services in the next cross-border deal. After all, reputation is everything.

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