DealTech: Transaction management isn’t a done deal until the whole deal is done

I like to describe myself as a recovering corporate lawyer. Anyone who has worked in M&A, private equity or capital markets will surely sympathize. It has to be one of the toughest gigs in town.

Deals are unwieldy beasts—large, complex and time constrained, involving multiple stakeholders and players across different organizations, teams and locations (often globally). With so many moving parts, delivering deals is an intense and time-consuming experience for any lawyer. The reality for the client isn’t much better.

Transparency of deal status and risk is poor, and cost overruns are far too common.

The phrase that best describes my time as a corporate lawyer is “organized chaos.” My memories are not of champagne-fueled completion dinners, but of “all-nighters,” McDonald’s breakfasts, and searching for a 24-hour pharmacy to buy a toothbrush. I would therefore happily challenge anyone to find a lawyer or client who doesn’t think that deal delivery is broken and in need of drastic improvement.

The First Shoots

Looking back, I cannot believe that we didn’t have access to tools that helped us deliver deals more efficiently, consistently and transparently. Sure, virtual data rooms have been around for some time, but they are a means to an end. They don’t really help with the planning, management, delivery and execution of a deal, especially for the buyer’s team who do most of the grunt work.

Luckily, we are now seeing the beginnings of a shift, with true transaction management technology or DealTech gaining traction with many firms across the globe.

Given that deals are so challenging, why are we only just now seeing a focus on technology to help optimize transaction management and delivery? Traditionally there hasn’t been the imperative for law firms (and more particularly their partners) to invest in it. Despite the inefficiency of deal processes, client retention, revenue and profitability remained high.

In other words, there was a “no skin off my nose” approach.

However, that attitude is slowly changing—clients are becoming more savvy in their approach to buying legal services, meaning firms need to compete more on price, client value and experience. In addition, firms need to attract and retain talent. Top lawyers will no longer tolerate poor lifestyles brought about by their firms under investment in appropriate tools and technology.

Currently, there is a lot of buzz being generated by self-styled “transaction management” tools.

Many of these tools and platforms are attacking the same use case—closing (or completion) checklists and binders. There is no doubt that organizing hundreds of documents for signing, tracking completion deliverables and bundling executed documents is one of the most taxing parts of any transaction. However, this is only one arduous element of a much larger and complex deal process. “Closing tech” is great (and long overdue), but genuine transaction management involves so much more.

The bigger transactional picture

The biggest difficulty for lawyers delivering deals on time and on budget is their size and complexity.

There are so many constituent parts and people to manage—searches, acquisition finance, competition clearances, consents and approvals, due diligence, funds flow, WIP and key issue reporting, post-closing integration—the list goes on and on.

And that’s only M&A.

Other deals and transactions have their own unique components, and present their own unique challenges (e.g., IPOs and listings, private equity, venture capital and real estate conveyancing). Transaction management is a far broader discipline that involves a great deal more than closing checklists, signing and bundling.

In order to truly transform transaction management and delivery, firms will need to invest in technology that helps address the full deal lifecycle—from pipeline to exit whether acting buy-side or sell-side. However, in doing so, lawyers need to be careful not to overcomplicate an already complex process.

It will be important to look for transaction management platforms that can help optimize every stage of a transaction. These platforms will act as the transaction hub that seamlessly interfaces with other transactional tools, giving lawyers and their clients a unified experience.

Genuine transaction management platforms should offer a single place for lawyers, clients and other deal advisors to collaborate and communicate. This platform is where all transactional content and activity (e.g., documents, data, information and communication) is accessible, actionable and secure—creating real-time visibility into the end-to-end process.

This means not only creating an online repository to securely manage and collaborate on transaction documents, but also creating a complete system that enables lawyers to collaboratively plan, manage, deliver and execute the transaction from start to finish. In other words, the transaction management platform should be the central operating system of the deal—a single source of truth with a real-time view of tasks, activities and progress.

It always amazes me how infrequently project management is utilized during deals, especially when clients are crying out for greater financial and project transparency and real-time insight into matter progress. Transaction management platforms should help lawyers, clients and deal advisors monitor workstream status, events, milestones and key deal issues, assign and track tasks, as well as deliver automated status reports and visual dashboards to help clients see and understand key deal data.

Just because a deal has closed, it doesn’t mean that the lawyer’s work is finished. It’s important to view deal closing as only a stage in the lifecycle of an investment.

Transaction management encompasses both post-completion administration and integration support. It’s critical that transaction management platforms also provide continuity and support post-completion activity all the way through to exit.

Cross-deal analysis

For some organizations, an acquisition is a once-in-a-lifetime event. For others, particularly large corporates in certain sectors, it’s business as usual.

Some companies will have corporate development teams of former investment bankers whose job it is to drive and manage the acquisition function. For these companies and teams, transaction management involves a higher-level approach. They need full transparency regarding their acquisition portfolio. Transaction management platforms should deliver visibility, reporting and insight to clients across all their deals—no matter what stage they are at.

For both lawyers and clients, transaction management platforms also have an important part to play in tracking market trends. It’s vital that the lawyers use transaction management platforms to capture the agreed terms and conditions of the deal.

This not only allows post-completion reporting to the client, but it also allows much broader analysis which helps lawyers advise their clients as to “what’s market.” Unless deal data is captured within a transaction management platform, lawyers and clients will have no benchmarks when negotiating deals.

A quick word about due diligence and AI

One area of the transaction process that is certainly ripe for improvement is due diligence. “But don’t we now have AI to solve all that,” I hear you cry.

Well, the short answer, unfortunately, is no.

There are many reasons why due diligence processes are so inefficient—for example, too much time spent reporting outside of scope, lack of experience and commercial awareness of reviewing lawyers, poor workflow and project management, not to mention the difficulty of report compilation and formatting (the bane of many a trainee). AI tools only address a narrow pain point for due diligence—large volume contract analysis—but even that pain point is now abating in many deals.

Many firms now only report on an ‘exceptions-only’ basis, so rather than summarize the provisions in 200 supplier contracts, clients want the know the key material risks in the top 10 contracts by value. You don’t need machine learning to help identify the red flags in such a limited number of contracts.

AI tools can be useful to help review and categorize documents in a virtual data room, which in turn assists create a tight and accurate due diligence scope. However, this raises another important issue with AI diligence tools. Data rooms are controlled by the seller, who isn’t traditionally inclined to make it easier for buyers to analyze documents and contracts.

After all, every lawyer should be familiar with the Latin phrase caveat emptor or let the buyer beware.

Firms looking to really improve their due diligence processes will be better off focusing on solutions that can help them compile an appropriate scope of due diligence, more easily make enquiries of the seller, allocate and track documents for review, enable the due diligence team to work collaboratively and transparently, make it easier to compile a due diligence report, capture and share insightful risk data, and transform the means of reporting so that clients can consume and assess due diligence outputs in new and more accessible ways.

We should also remember the other AI—automation intelligence.

The majority of transactions have standard processes and workflow. Automating these standard processes within transaction management platforms carries a lot of benefit. It ensures quality and consistency of delivery and helps to mitigate the risk of error—something firms are keen to avoid at all costs. It also produces data and metrics that allow law firms to identify opportunities for process reengineering and improvement.

Designing from the outside in

As we move toward the transaction management “ideal state,” lawyers should remember to take a client-centric approach. While lawyers face much difficulty in the deal process, it will be important to implement and design tech solutions that address genuine client need as well as their own.

Clients won’t thank firms who implement tools that increase revenue and profit but don’t move the needle on client value and experience.

Several recent DealTech solutions have been created by former lawyers who were compelled to find a better way. It’s fantastic to see such an entrepreneurial spirit amongst lawyers, but we shouldn’t forget the client’s desire for greater efficiency, consistency and transparency in transactional processes. Start with the client and then work inwards to design and implement solutions.

It’s clear that transaction management technology is quickly establishing itself as an important part of the LegalTech ecosystem, but we should remember that there is much more that can be achieved in order to deliver genuine deal management. While DealTech startups that tackle isolated elements of transactions are making waves right now, law firms should be looking to embrace complete end-to-end transaction management platforms that can not only match the functionality of, or integrate with, other DealTech vendors, but can also deliver rich additional functionality that can help optimize the whole transaction lifecycle.

Only then will law firms create the value and efficiency that clients demand.

Reprinted with permission from the Tuesday, Nov. 27 edition of the New York Law Journal© 2018 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or

Rob MacAdam

Vice President, Corporate Legal Solutions at HighQ
Rob is an experienced legal technology and innovation leader specialising in the design and creation of digital solutions to empower corporate legal teams and transform the delivery of legal services. As a former M&A and private equity lawyer for some of the UK’s leading law firms, Rob is passionate about the use of technology to create smarter legal service delivery methods as well as innovative new legal products. 

Rob leads the corporate legal solutions team at HighQ. Before joining HighQ in 2017 he was group innovation manager for Pinsent Masons as part of their award-winning SmartDelivery team. Rob is an active member of the LegalTech community, regularly contributing for organisations and publications such as ACC, CLOC, The Lawyer, Bloomberg, Corporate Counsel and Law360.