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Middle Market M: Handbook for Investment Banking and Business Consulting by Michael R. Nall, Christian W. Blees, Robert T. Slee, Kenneth H. Marks

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CHAPTER 11

Deal Structure and Legal Documentation

ATTORNEY'S ROLE

A fundamental principle of legal representation in a merger or acquisition transaction is that an attorney involved in the deal does not represent “the deal,” but rather a party participating in the deal, generally the buyer or the seller. The interests of the buyer and the seller are adverse in a merger and acquisition transaction and any legal representation of the deal would result in a conflict of interest. An M&A attorney may not represent more than one party in a deal, specifically in a deal in which the recognized buyer or seller actually consists of multiple parties. In those transactions, a deal attorney may have conflicts of interest among those parties as those parties may have certain interests that are adverse to each other.

Table 11.1 Role of the Attorney

Role as Seller's Attorney Role as Buyer's Attorney
Prepare client for the deal process Prepare client for the deal process
Counsel client on deal points Counsel client on deal points
Assist in preparing the due diligence data room and due diligence review Conduct legal due diligence and coordinate other due diligence
Review, and negotiate transaction documents: Prepare, review and negotiate transaction documents:
  • Confidentiality agreement
  • Term sheet (if any)
  • Letter of intent
  • Acquisition agreements
Allocate risk to buyer by:
  • Confidentiality agreement
  • Term sheet (if any)
  • Letter of intent
  • Acquisition agreements
Allocate risk to seller ...

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