Junior Associate #10 - Closings, part 1
Not so long ago (well, almost 6 years now...) I wrote a post for another blog on what I believe is the most exciting part of being a transactional lawyer: closings.
This was it:
"Everything I do every day of the year is worth it only because I really enjoy closings. Are you ready?"
When my partner back in Madrid told me that, I affirmed with my head without really knowing what I was ready for. We were near to closing a deal, and yes, that is why we work every day. Closing deals. That´s it.
It was a really interesting transaction and it was specially great for me because the position I had in firm's structure (I will explain that below). There were a lot of people involved, emails pouring every single minute and, because of the most important ones were addressed to the partners, I had to reply to the not-so-important ones, which were most of them. That drives you a little bit crazy, but you´re in, and it´s worth it because of that.
From a junior associate perspective, you don´t normally have much quality work to do (not in Spain at least, in the US it is different). Compiling documentation, preparing the annexes and schedules to the agreements and last minute document review. One day you prepare a mark-up with the counterpart´s comment to a document and the other one you´re including the hand written comments of your partner in the same document.
Raising questions and proposing changes is not what you're expect to do, but different points of view are always good. Raise your concerns and have them quickly dismissed by your partners on the ground of "let´s not bother the counterparty ok?"
Before closing, you normally have one key thing to do: the due diligence. Basically it is telling your client what the hell is he going to purchase. It´s a long and tedious process which concludes in a report un which you have to tell you client everything that is wrong with the target asset/company.
This is the moment when dinners at the office are an everyday thing and you spend long hours reviewing which to you is useless documentation... You work long hours during the day, small break, get your energy back and back to business. There are different teams involved and they all need to go at the same pace to make sure the report is moving forward.
The problem with the due diligence is that it is sometimes very boring and you start to think if lawyering is what you expected it to be, that every is crap. Well...no.
This is the time when you really learn. Not only from what you colleagues may teach you while reviewing your work, but also from reading a huge amount of papers, agreement, internal documentation, regulations, etc. You get opinions from other lawyers and discuss everything to finally understanding the "guts" of the transaction. This is when you learn that the due diligence is really linked to the reps and warranties of the agreement and this is why a good report is really important.
Weeks into the due diligence, you send your client a very nicely structured report that he is (probably) not going to read, but you would have done your work and that´s what matters. You normally want to highlight "red flags" that may materially affect the transaction and that you really need the client to read.
After the report, the real fun begins: negotiation of the agreement. But this will come in another post.