In this article
Background
Legatics has undertaken research involving a broad spectrum of users and innovation teams within Corporate practice groups of Legatics customers. Through this research, we've discovered that lawyers across our customer base are increasingly turning to Legatics to manage the following in M&A deals:
Warranty disclosures
Q&A processes
Documents and issues lists
This article outlines our findings focusing on documents and issues lists.
✍️ What are documents and issues lists used for?
Corporate/M&A transactions can generate a number of legal documents and technical schedules, depending on the transaction. Common types of documents that need to be shared between multiple parties (or sent to certain parties only) include:
🔦Pre-Deal Documents
Non-Disclosure/Confidentiality Agreements
Letter of Intent
Exclusivity Agreement
💲Primary Documents
The main sale/purchase document for the Target company - which may be Share Purchase or Asset Purchase Agreements between the buyer, seller, and any third parties
Schedules depending on the type of deal including employment, real estate, IP or other technical schedules relating to relevant business assets
📃Ancillary documents
Contractual consents and regulatory or board approvals required by third parties or the board of the buyer/seller
Transitional services agreements (“TSAs” to govern any period when assets are moved to the new buyer)
Escrow/Paying Agent Agreement (who holds/transfers the money)
Representations and Warranties Insurance Policy
Company incorporation and approval document as required to facilitate the transaction
There may be a variety of issues to be tracked, depending on the deal or outcome of the due diligence process (whereby the buyer inspects the seller’s business to identify any issues which may impact the sale/purchase price).
Once the deal is close to closing, all documents are tracked to ensure they are in the agreed form and issues closed out (this may be referred to as a "closing checklist"). Agreed form documents are shared with parties to sign, and final versions are collated and shared in a hyperlinked index (a closing binder).
💼 How is this process managed outside of Legatics?
Word tables are commonly used to track documents and issues, and their responsibility and status. These tables are static and often rely on manually applied colour formatting to indicate the status of a document or issue. They cannot be filtered or searched easily (aside from using a shortcut such as Ctrl-F) to find relevant information. There may be different versions depending on confidentiality walls/the relevance to different parties.
Documents are difficult to embed in Word without corrupting the Word file, so the Word table and any relevant documents are shared separately with parties via email attachments. This removes the file from the law firm's document management system (DMS).
Document versions are shared by email as they are negotiated and updated, which leads to a poor client experience where the latest versions are shared as email attachments.
A closing checklist may be created in Word or Excel to manage signing and closing. A junior lawyer would email individual signatories with relevant documents or upload them to e-signature platform for signing. The lawyer would track signatures as they are received via email in the closing checklist, downloading the signature pages and creating final PDF versions of documents using a document editor.
Once final versions of the documents are collated, an index is created in Word/PDF editor and all documents are manually renamed and numbered in a folder structure. Documents are hyperlinked to the Word/PDF index, often using a point solution or specialist IT support.
👎Pain points
Limited Collaboration Features: Word offers limited collaboration features - it is static, cannot reliably embed documents, cannot be easily searched or filtered to show relevant status/responsibility, and there are no automated notifications. Collaborating on documents in real-time, assigning tasks, and tracking progress becomes more challenging, particularly when multiple team members need to work on the document and issues lists simultaneously.
Limited Organisation: Word lacks built-in legal and task management structures designed specifically for managing documents and issues. While it's possible to create tables or lists to organise a list, maintaining a searchable, clear and organised structure is a challenge as the volume of information increases. Creating a progress report is manual and administrative.
Difficulty in Tracking Changes and Document Versions can introduce error: Tracking changes and updates to documents and issues can be difficult to manage in Word, especially when multiple parties are involved. Without robust version control features, it's easy for changes to get overlooked or for different versions of the document to circulate via emails, leading to confusion and errors.
Administrative signing process: Organising and tracking signature pages is done via email and using e-signature platforms, relying on inbox management to reduce the risk of error. For complex deals with a large number of signatories, this is a time-consuming process which is often written off.
Time consuming final version and closing binder creation: Once all signatories have signed and documents are dated, often junior lawyers have to use a PDF editor to copy and paste signature pages together to form a conformed copy or final version, which can take hours depending on the number of documents and this process is open to error. Final versions then need to be organised in folders, renamed and indexed, which is an administrative and time-consuming process that is often written-off.
💡How can I use Legatics to manage this process?
Streamlined Document Collaboration: Legatics provides a centralised platform for document collaboration, allowing lawyers and other stakeholders involved in the M&A transaction to work together seamlessly. This reduces the need for email exchanges and manual tracking of document versions, streamlining the review and editing process.
Importing & Templates: Legatics allows lawyers to easily import legal text to create and manage a list with a few clicks. The ability to template a documents and issues list saves time and effort in drafting. Lawyers can leverage templates as a starting point and customise them to fit the specific needs of the M&A transaction, reducing the need to start from scratch.
Real-time Collaboration and Feedback: Legatics facilitates real-time collaboration and feedback among team members, allowing lawyers to communicate seamlessly and address comments and revisions efficiently. This promotes transparency and ensures that all stakeholders are kept informed throughout the drafting process.
Permissions: Granular permissions can be set across Legatics to control who can view specific items within a list or a list in its entirety. For example, you may want to only grant view permissions to some parties for certain documents, or give access to third parties to their relevant documents only. This can be achieved without the need for multiple email threads / documents.
Exporting lists: Easily export the list in a clean format with house branding applied.
Signing process management: Easily create signature packs and track progress of signing in the Signing view, then use our Collate feature to add signed pages to the correct documents, and create final versions in minutes not hours.
Download closing binders: Once final versions are created, create new lists for closing binders - files are automatically renamed and numbered, and indexed ready for download.
📈 Key benefits of using Legatics
Time saved and reduced risk of error
The users responsible for creating the documents and issues list save time doing this in Legatics by using a template or precedent Word or Legatics checklist, and not having to copy and paste from different places (emails/Word table).
Real time collaboration allows updates to be added and viewed immediately, reducing need for status update calls.
Streamlined signature process and tracking.
Easy final version collation and closing binder creation.
Improved clarity and on-demand updates
The list is kept up to date in real time. This removes the reliance on a single person / team having to manually update responses in a Word / Excel tracker. It also acts as a single source of truth, reducing risk of error.
Version control
All versions are uploaded directly to Legatics so there is no confusion caused by multiple files sent back and forth via email. Users will be able to see when files were uploaded and by whom and all versions will be attached to the relevant row and permissioned as needed.
✏️ How can I use Legatics to manage documents and issues lists?
We encourage you to set up a demo matter first and work with your M&A colleagues to create lists in Legatics and import data from your Word or Excel files.
Then you can turn those lists into templates so that you can use them again and again. This will help save you time when setting up new lists within new matters!
You're ready to create a live matter and start managing your M&A transactions in Legatics!