Ahead of the training contract application deadline, a Macfarlanes NQ, associate and partner discuss what they do on a deal
During Legal Cheek’s recent Commercial Awareness Question Time, ‘Inside the acquisition of Visa Europe’, Macfarlanes partner Nicholas Barclay, associate Alice Fuller and newly qualified (NQ) associate Alex Evans discussed their work on one of the biggest deals of last year.
Here are some of their reflections from life on the M&A frontline…
Due diligence
Due diligence is the staple task of trainees and junior corporate lawyers on large transactions. It boils down to “scrutinising every aspect of the target company from a legal perspective to ensure that your client knows precisely what it is buying and the associated legal risks,” reports Alex Evans, who was a trainee on Visa Inc.’s $18.375bn (£14.23bn) acquisition of Visa Europe in 2016.
His colleague, Alice Fuller, defines due diligence as “finding out the key facts your client needs to know about the business that they might be acquiring”. She adds that “the work you’re doing is extremely important because it can go straight to the value of the business”, potentially leading to a price adjustment in the deal depending on the significance of the liability that junior lawyers uncover.
Evans and Fuller both highlight the fact that corporate M&A due diligence means interaction with many different parties, including most of a law firm’s different departments, the client company and the target company, plus co-advisers (Macfarlanes acted on the Visa deal alongside US firm Wachtell Lipton Rosen & Katz). As an M&A lawyer “you’re at the hub” of the deal, says Evans.
From a trainee’s perspective, it’s a great opportunity to gain an insight into what other departments are like, adds Evans. Fuller, meanwhile, emphasises the importance of good communication and coordination during due diligence to spot any “red flags”.
Negotiation
Negotiation is a skill that M&A lawyers learn gradually over the course of their career. Fuller, who qualified as a solicitor in 2014, describes it as “attempt on behalf of your client to discuss the points with the counterparty and to reach an agreement”.
She impresses the importance of putting egos to one side (“it’s not about winning every point,” she says), while urging aspiring solicitors to have the confidence to be themselves:
Developing your own style shouldn’t be underestimated. And actually that will give you more confidence … If you are naturally quite quiet you don’t necessarily need to start trying to be louder and more dramatic.
Evans echoes Fuller’s sentiment, while noting that real-life negotiation “might not be the sort of dialogue that you get in a Suits drama very often”. He says he has learnt largely by watching partners in action, and most admires the thoughtful ones “who consider the points, and who are perhaps not necessarily the loudest voice in the room, or the most aggressive.” It is these individuals, who “tend to have the most success,” adds Evans.
Barclay, meanwhile, emphasises the value of experience. He explains:
Inevitably as you do more of the same types of deal you understand the points better, you become more comfortable in the arguments, and so you get a natural confidence, and then you can use that confidence to develop the style that you want to have.
The growing role of technology
Automation and artificial intelligence (AI) is changing M&A. Barclay thinks it’s inevitable that in the relatively near future machine learning will do some of the more administrative work currently done by junior lawyers on big transactions like Visa Europe. For a firm like Macfarlanes that already operates fairly lean teams, this is an opportunity, he adds, explaining: “Having huge teams of people on deals … doesn’t go to the crux of what we like to do, which is the complex value added work. We want to get people in the position where they can be doing more interesting work more quickly.”
Barclay also highlights agile working as an area to watch, as technology enables it to be done more smoothly. He continues:
Being able to work remotely efficiently, so we all feel like we’re in the same room and all working together collaboratively, you can only really do that with the proper use of technology. I think it will clearly have an impact, and I think it will be a good thing.
Further reading
- The acquisition of Visa Europe, from a trainee’s perspective [Legal Cheek Journal]
- Why lawyers need to be good listeners [Legal Cheek Careers]
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