Claire Consoli is an Associate in the Corporate Team at Skadden, Arps, Slate, Meagher & Flom (UK) LLP.
In a nutshell, solicitors who specialise in M&A (mergers and acquisitions) advise clients on the sale and purchase of companies or their assets. The sectors and types of transactions involved vary greatly, from complex multi-billion dollar cross-border mergers involving the combination of multinational conglomerates, to start-ups undertaking smaller domestic acquisitions.
What is M&A?
An M&A practice at a law firm generally forms part of the broader corporate department, which might also include capital markets, private equity and restructuring teams. It’s a transactional practice area, which means that you won’t find M&A lawyers in court or appearing before tribunals; they will be busy negotiating and executing deals.
M&A practitioners often choose to specialise in either public M&A (which involves public companies whose shares are listed and traded on a stock exchange) or private M&A (relating to private companies whose shares are not publicly traded, but rather held by a more limited number of entities or individuals).It’s true that every deal (and every client) is different, which allows M&A lawyers to continue learning from each transaction they work on.
What do M&A lawyers do?
There will often be numerous advisers and parties involved in an M&A transaction, including investment banks or boutique advisory firms acting as financial advisers, tax advisers, accountants, PR consultancy firms and, of course, at least two law firms (one acting for the buyer and another acting for the seller). M&A lawyers often help to manage and coordinate the various parties and workstreams, and will be primarily responsible for drafting and negotiating the principal transaction documents for the deal and liaising with specialist teams, such as tax, pensions, competition/anti-trust and regulatory. If the transaction involves other jurisdictions outside the UK, the M&A team will also coordinate with legal counsel in the relevant countries for the necessary local law advice.
When a new deal kicks off, trainees can expect to carry out legal due diligence (or ‘DD’), which will likely involve contract review to check for potentially problematic clauses, verifying the corporate structure and ownership of a target group, summarising any material litigation, and coordinating input from other specialists. The DD process is critical in helping the client and the rest of the deal team understand key legal risks to be addressed in the transaction documents, or that may affect the price the buyer is willing to
pay for the target.
Sometimes an M&A solicitor might be working on four or five different transactions at any one time, but other times one large transaction may demand 100% of a solicitor’s capacity. Similarly, the size of the team and the number of specialists dedicated to a particular deal may vary depending on the timeline, complexity, sector, regulatory and political environment and scale of the particular transaction and the way in which the matter partner prefers to service his or her clients – there could be a small team comprising a trainee solicitor working with one partner and one associate, or a much larger team with two partners and five or six associates and trainee solicitors, each responsible for different aspects of the transaction.
What makes a successful M&A lawyer?
Being a successful M&A lawyer is not just about “getting the deal done” (although completion is certainly one of the most exciting and rewarding aspects of the job) – building a strong foundation of core skills is as important for an M&A lawyer as in any other discipline. Some of the most important qualities that M&A lawyers hone over the course of their career include:
• Knowing the law: although project management is a big part of a transactional lawyer’s job, it’s not all paper pushing! Having a firm grasp of the law is equally, if not more, important. An M&A lawyer will need to be able to navigate and advise on contract law, company law and the myriad rules and regulations that impact companies and the transactions they are undertaking (from corporate governance codes, to listing rules, to the Takeover Code, which regulates takeovers of UK public companies). M&A lawyers also acquire a solid understanding of other areas of law over time, which allows them to effectively “issue spot” potential problems in other practice areas (such as tax, employment, pensions and data protection), so that they know which specialists to involve in the transaction.
• Effective time management: the ability to juggle more than one matter, with competing demands and priorities, is a key skill for any transactional lawyer. The best starting point for trainees is to be well organised from day one – the volume of documents required for a transaction can sometimes be overwhelming, so effectively keeping track of each document and its status is critical.
• Commercial awareness: this doesn’t just mean keeping up to date with market trends and the headlines in the FT, but rather the ability to understand your client’s business and tailor the advice you provide to best suit your client’s needs and commercial objectives.
• People skills: working effectively in a team is critically important for M&A lawyers, as transactional work is never a sole pursuit. Even though the final terms of the deal will be negotiated by the respective law firms on either side of the transaction and each from the same objective of agreeing the best deal for their client, all parties are generally working towards the same goal. It’s therefore important to always treat the other side (in addition to others in your firm and other advisers) with respect.
Realities of the job
Whilst it is fair to say that late nights and weekend work are par for the course at critical points in the lifecycle of a transaction (signing and completion are crunch times), there are “peaks and troughs”, with busier periods often followed by quieter times with normal working hours. The demanding and sometimes unpredictable hours on cross-border transactions spanning multiple time zones can be challenging, but are often required of trainees and junior lawyers because they are so heavily involved in the transaction and instrumental to its successful completion. It is this early responsibility and high degree of involvement that helps make this practice area so professionally rewarding. There is also a great sense of accomplishment in helping clients achieve their goals. The fast-pace and relatively quick turnover of deals also means that junior lawyers are encouraged to learn on the job and can enjoy an excellent variety of work and become familiar with a variety of businesses across multiple sectors.
2018 was a healthy year for M&A, with global deal volume reaching US$3.53 trillion – the third highest on record according to Mergermarket reports, driven largely by strategic “megadeals” (valued above US$10 billion). This momentum was maintained at the start of 2019, which can also be attributed to a small number of megadeals, including Bristol-Myers Squibb’s US$90 billion takeover of rival drugmaker Celgene and Fidelity National Information Services’ US$43 billion acquisition of payments group Worldpay.
However, market uncertainty stemming from macroeconomic risks such as Brexit and the US-China trade war has led to a drop in deals by volume. These factors have caused headwinds for M&A deal activity in 2019, but many practitioners remain hopeful that vast cash resources, record levels of private equity dry powder, favourable exchange rates for foreign buyers and the rise of activist investors pursuing M&A initiatives may help to maintain buoyant levels of M&A.
The technology sector in particular continues to be very active, with technology companies seeking to consolidate and expand their footprints through strategic acquisitions, whilst non-tech companies are also keen to invest in new technology to keep pace with a rapidly evolving market.
Skadden, Arps, Slate, Meagher & Flom LLP
Skadden provides legal services to the business, financial and governmental communities around the world in a wide range of high-profile transactions, regulatory matters and litigation issues. Our clients range from a variety of small, entrepreneurial companies to a substantial number of the 500 largest U.S. corporations and many leading global companies. The firm has more than 50 practice areas and advises clients in matters involving, among others, M&A, litigation and arbitration, corporate finance, corporate restructuring, banking, project finance, energy, antitrust, tax and intellectual property.