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Kate Simpson

Project management for M&A

There is no simple solution, but imposing structure on deals can have a big payoff.

The 2016 International Bar Association conference was held in Washington. One of the many topics explored was the growing use of legal project management in mergers and acquisitions.

Project management has been practised in most industries in some form for long enough that it is now a well-recognized profession. But it has also morphed into leaner and more agile forms as different industries have applied its core principles to their worlds.

The benefits are broad, but there are three key objectives of LPM: more accurate forecasting and budgeting (how long; how much); efficient execution and delivery (critical path analysis); and managing expectations (communicating change).

Projects occur where there is a discernible beginning, middle and end; where one set of actions follows another set of actions (and so on) until there’s an agreed conclusion. But as many transactional lawyers will tell you, it often feels like there is no set process to M&A. Sometimes, the beginning is the middle; sometimes, the end occurs at the beginning; and sometimes, everything happens all at once — even the ending.

Applying project management principles to M&A, therefore, can feel initially alien. Finding the structure in messy and complex deals tends to take an expert eye; experienced practitioners often see the familiarity in the unique and unknown deals. It is using the same types of documents or the repetition of the same types of task, or experiencing similar risks and issues that opens M&A up to a more structured approach to deals, even alongside the unique twists and turns that shape our clients’ journeys.

LPM in M&A is about finding the structured pieces in a deal and running those parts as expertly and seamlessly as possible, while allowing for the inevitable pivots and stops/starts that occur along the way. “LPM offers an organizational and communications framework that enables a law firm and in-house counsel to better plan, manage and execute M&A transactions” (from the invaluable “Using Legal Project Management in M&A Transactions” by Byron S. Kalogerou & Dennis J. White — published by the ABA). Or, as I like to summarize it, as “scope, track, communicate.” (Mainly due to the pretty rhythm when said out loud.)

1. Scope

This is understanding who does what and when, but more importantly, why. Scoping is about making the expectations of each deal and client transparent. It is upfront agreement about what it is that will be delivered — as much as can be predicted anyway. Anything unplanned can be dealt with as and when it arises, with subsequent agreement between lawyer and client about these extra puzzle pieces. A more structured work plan then details the actions to follow. This can either take the form of a high-level phase map that captures a hint of the tasks within or a very detailed Gantt chart of specific tasks with assigned roles and deadlines. Your mileage may vary.

2. Track

This broad agreement on tasks and deliverables must then be tracked throughout the deal. The law firm is responsible for making sure that the “who” does indeed do the “what” and “when” (or for how long) they were meant to do it. Tracking becomes an essential step if a budget has been set, as well as to be alerted to anything unusual before it has time to turn into an issue that can alter timelines and risk profiles or financials.

3. Communicate

The knock-on effect of tracking transactions is then to communicate — both internally to the team and externally to the client and other parties. Timely communication allows risks and issues to be resolved, budgets to be renegotiated and tasks to be reprioritized in response to changes in scope or plan.

This is only half the story, however. It is the tools we use throughout a deal to keep it on track that prompted the most interest in the session in Washington. But it’s not all about (often expensive) technology to support the people and processes in an M&A transaction.

The mix of checklists, templates, guides and charts contained in the above-mentioned book (not a transistor or Wi-Fi signal in sight) make up a clear set of precedents that M&A lawyers can adapt and use in their deals. The use of these documents, like all precedents, depends wholly on the type of deal, the industry, the type of client, etc. A light touch is needed in some cases, and in others, where the complexity and size of deal require it, a more formal level of ceremony and commitment to structuring the scoping, tracking and communication is essential.

Some firms assign project managers to help keep complex and multi-jurisdictional deals on track by co-ordinating and monitoring all the different moving pieces.

As standard documents become templates and tasks become standardized procedures, so the process or output can be automated. Our standard communication tools such as email and the conference call are somewhat lacking in the highly collaborative and real-time world of M&A. The collaborative technology we discussed included: sharing screens on Skype for real-time co-authoring of documents, sharing up-to-date versions in a virtual data room and using specific M&A systems such as closing folders to track progress and streamline the heavy administrative tasks involved in co-ordinating large closing agendas and the myriad documents within.

The discussion also turned to artificial intelligence and how technology can run parts of our deals, with lawyer oversight, better than any human can — such as first-level contract review — through Kira Systems (or Diligen: the new kid on the block in Canada). And this is just the start: There is still more technological innovation on the horizon that will embed and support LPM practices in M&A.

Forcing structure and process on transactional deals like M&A with the number of moving pieces, people and documents, often happening simultaneously, has benefits for both the client and law firm. There is growing recognition that a well-structured deal is more likely to hit budget, incur fewer writedowns and achieve client goals with fewer unwelcome surprises along the way.

Kate Simpson is national director of knowledge management at Bennett Jones LLP, and she is responsible for developing the firm’s KM strategy and initiatives. The opinions expressed in this article are her own.

  • President

    Richard Schreiber`
    Hi Kate, great article and an interesting adoption of LPM to a more typically unpredictable legal practice area. I like your three areas of scope, tracking and communication, though those these are more traditionally waterfall.

    While they say you technically are not supposed to mix waterfall or traditional project management with agility, you can make communication iterative so there is constant feedback to adjust accordingly.

    Resolving issues and dealing with risk in this fashion is definitely agile. But most risk is typically dealt with pre-emptively, at least in traditional project management for fear that no risk planning is very risky business.

    Do you use a LPM application for tracking?

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