Ed.
note:
Last
in
a
series.
You’ve
successfully
navigated
the
pre-merger
phase.
Your
deal
has
closed.
Your
legal
department
has
taken
the
immediate
necessary
steps.
Now,
the
real
work
of
ensuring
long-term
success
begins.
Ironically,
this
forward-looking
effort
may
start
with
a
big
step
back:
revisiting
the
reasons
for
the
deal
in
the
first
place
and
clarifying
what
“success”
even
looks
like.
“You’ve
got
to
understand
the
reasons
and
value
drivers,
right?”
says
Josh
Hollingsworth,
an
M&A
partner
with
Barnes
&
Thornburg
LLP.
“If
nobody
articulates
the
goals
and
actually
says:
‘This
is
why
we
did
it,
and
this
is
what
we’re
hoping
to
do
over
the
next
three
to
five
years,’
then
you
don’t
know.”
In
this
series,
we’re
providing
a
step-by-step
guide
for
general
counsel
navigating
a
merger
or
other
corporate
transaction.
In
part
one,
we
explored
best
practices
for
corporate
law
departments
in
the
pre-merger
phase,
and
in
part
two,
we
looked
at
the
immediate
steps
post-closing.
Here,
we’re
eyeing
ways
law
departments
can
help
to
ensure
the
long-term
success
of
an
integrated
company.
We’ll
also
be
discussing
these
topics
in
a
January
webinar.
You
can
pre-register
here.
First,
Have
a
Plan
Long-term
success
is
necessarily
a
function
of
effective
planning:
setting
up
processes
that
will
ensure
positive
outcomes,
and
creating
a
comprehensive
checklist
for
your
law
department
to
follow.
“You
need
to
have
the
resources
in
place
to
actually
execute
the
plan,”
says
Kariem
Abdellatif,
the
head
of
Mercator
by
Citco
(Mercator),
a
specialist
entity
management
provider
that
helps
organizations
manage
their
global
entity
portfolios,
including
during
complex
M&A
transactions.
“It’s
not
just
about
building
a
plan
and
then
hoping
that
things
will
come
together
–
you
need
to
ensure
you
have
the
operational
capacity
and
ability
to
follow
through”
Abdellatif
adds
that
one
area
often
overlooked
is
entity-governance
mapping
–
creating
a
clear
inventory
of
acquired
entities,
their
governance
requirements,
and
upcoming
filing
cycles.
“A
merger
can
instantly
multiply
the
number
of
entities
you’re
responsible
for,”
he
says.
“Without
a
clear
map
of
governance
requirements
and
renewal
cycles
for
each
jurisdiction,
critical
obligations
can
slip
through
the
cracks.”
Hollingsworth
notes
that
law
departments
involved
in
corporate
transactions
will
often
create
a
bespoke
checklist
that
will
kick
off
the
long-term
work
of
integration.
There
are
standard
items
that
can
easily
be
found
on
Google,
but
organizations
will
need
to
customize
these
to
their
specific
needs.
“The
law
department’s
going
to
want
to
have
its
own
integration
checklist,
not
just
to
make
sure
that
things
aren’t
missed,
but
to
make
sure
there’s
accountability,”
Hollingsworth
says.
“Is
the
law
department
responsible
for
this
item,
or
is
it
some
other
department?”
Don’t
Neglect
HR
Many
of
the
items
on
your
checklist
will
involve
the
legal
department
—
issues
like
contract
renewal,
or
consolidating
insurance.
But
none
may
be
more
extensive
than
the
human
resources
issues
that
arise.
Something
as
seemingly
straightforward
as
consolidating
benefit
plans
is
rife
with
potential
problems.
These
go
beyond
health
and
dental
insurance,
implicating
everything
from
401(k)
programs
to
remote
work
policies
to
paid
time
off.
Combining
benefit
plans
raises
the
possibility
that
the
company
will
face
a
tough
choice:
either
take
on
unforeseen
costs
in
meeting
higher
requirements,
or
alienate
a
large
portion
of
the
workforce
by
cutting
their
benefits.
Additional
problems
often
arise
when
merged
entities
retain
separate
programs,
Hollingsworth
notes.
When
employees
at
the
same
level
have
different
PTO
allotments,
for
example,
this
type
of
disparity
will
create
management
issues.
“That
kind
of
human
resource
stuff
really
can
drive
people
mad,”
Hollingsworth
says,
“which
is
one
of
the
reasons
I
think
a
lot
of
companies
try
to
integrate
it
all,
as
painful
as
it
is.”
Prepare
for
New
Jurisdictions
While
your
company
presumably
entered
a
transaction
based
on
certain
value
drivers,
understanding
any
compliance
issues
that
can
arise
in
new
jurisdictions
will
help
you
hit
the
ground
running.
Abdellatif
notes
that
the
merged
company
is
now
responsible
for
entities
in
each
new
jurisdiction
on
Day
One,
and
this
needs
to
be
addressed
by
the
legal
department.
“Suddenly
you
find
yourself
responsible
for
a
portfolio
of
entities
in
countries
that
you’ve
never
operated
in
before
–
with
unfamiliar
legal
systems,
languages
and
regulatory
expectations.”
he
says.
“So
gaining
practical
knowledge
of
how
to
actually
run
a
portfolio
of
entities
in
the
Gulf
region,
APAC,
or
South
America
becomes
essential”.
Even
if
the
CEO
of
the
merged
company
directs
the
legal
department
to
take
a
relatively
hands-off
approach
to
a
new
entity
post-merger,
obligations
still
arise
for
the
company’s
lawyers.
The
legal
department
will
still
need
to
oversee
all
of
the
units
in
its
organization,
regardless
of
the
broader
approach
to
business
management,
Hollingsworth
notes.
“If
it’s
part
of
what
I’m
responsible
for,
I’m
going
to
need
to
be
involved,
right?”
he
says.
“I’m
going
to
need
to
have
meetings
and
ask
questions
and
implement
processes
—
or
at
least
ask
what
they
are.”
“Part
of
that
oversight
is
having
a
system
or
working
with
a
provider
that
gives
you
visibility
into
filings,
local
relationships,
signatory
authorities,
and
upcoming
deadlines
so
you
can
prioritize
what
matters
most,”
Abdellatif
says.
“Visibility
drives
triage;
without
it
you’re
reacting
instead
of
planning.”
Prepare
for
the
Unexpected
Even
with
robust
due
diligence,
some
unforeseen
compliance
issues
may
still
slip
through
the
cracks
and
arise
post-merger.
Maybe
an
underground
storage
tank
that
nobody
knew
about
raises
environmental
concerns,
or
maybe
a
union
problem
could
be
developing.
If
such
an
issue
is
brought
to
the
attention
of
the
legal
department,
there
are
a
number
of
steps
to
take.
The
first
step
for
the
GC
is
to
note
whether
this
is
an
ongoing
or
one-off
issue,
Hollingsworth
says.
“If
it’s
an
ongoing
issue,
we’ve
got
to
stop,
and
we’ve
got
to
start
complying
with
the
law
today.”
Going
back
to
the
purchase
agreement
is
also
a
critical
step.
Lawyers
will
need
to
determine
if
any
misrepresentations
were
made,
and
whether
any
legal
claims
could
arise
under
the
terms
of
the
deal.
Typically,
there
are
deadlines
to
make
any
claims,
and
these
should
be
carefully
calendared
by
the
legal
department
post-merger.
The
GC
should
also
determine
what
insurance
is
in
play
—
whether
it
originates
with
the
larger
entity
or
the
company
that
was
acquired.
“I
think
after
you
have
an
assessment
of
the
facts
and
the
legal
circumstances,
then
at
that
point
you’re
going
to
bring
in
the
leaders
of
the
business,
and
then
they’re
going
to
ultimately
make
the
call
about
what
to
do
about
it,”
Hollingsworth
says.
“But
there’s
a
lot
of
fact-finding
and
investigation
before
that.”
Abdellatif
notes
that
many
“surprises”
are
actually
governance
issues
waiting
to
be
discovered
—
dormant
subsidiaries
with
legacy
liabilities,
missing
UBO
records,
or
incomplete
statutory
registers.
That’s
why
a
compliance
health
check
is
so
valuable
during
the
due
diligence
phase.
“We
often
see
cases
where
local
entity
documents
are
incomplete
or
outdated,”
he
says.
“Identifying
those
issues
early
lets
you
mitigate
operational
and
financial
risk
before
they
become
crises.”
Maintain
Your
Infrastructure
It’s
no
secret
that
law
departments
are
facing
ever
greater
demands
for
efficiency,
and
to
remain
competitive
they
must
maintain
effective
systems.
Since
much
of
the
merger
process
primarily
involves
logistics,
the
right
tech
can
be
transformative,
Abdellatif
notes.
“You
want
a
partner
who
can
keep
all
the
logistics
and
details
under
control,”
he
says,
“so
the
brilliant
minds
in
the
M&A
department
can
stay
focused
on
negotiations
and
strategic
outcomes
rather
than
being
stuck
with
the
administrative
burden.”
“After
a
merger,
the
volume
of
entity
data,
signing
workflows,
and
jurisdiction-specific
obligations
can
double
overnight,”
Abdellatif
explains.
“The
real
challenge
is
not
just
managing
the
data
but
centralizing
it
so
global
leadership
can
trust
it.”
“Technology
gives
you
auditability
and
scale.
People
will
still
make
decisions,
but
technology
prevents
the
simplest
administrative
items
from
derailing
those
decisions.”
Closing
Thought
Long-term
success
after
a
merger
requires
the
same
things
that
make
any
complex
program
work:
a
clear
plan,
accountable
owners,
the
right
information,
and
the
infrastructure
to
make
timely,
auditable
decisions.
That
mix
of
strategy,
governance,
and
logistics
is
where
legal
teams
can
add
enormous
value
—
and
where
specialist
entity
management
partners
and
oversight
tools
can
make
integration
faster,
safer,
and
more
predictable.
“Integration
is
fundamentally
an
exercise
in
aligning
people,
processes
—
and
entities,”
Abdellatif
says.
“If
you
prepare
for
those
three
things
from
Day
One,
you
give
the
newly
merged
company
the
best
chance
of
achieving
the
strategic
goals
that
justified
the
deal
in
the
first
place.”
Stay
tuned
for
our
January
webinar
on
the
topics
addressed
in
this
series. You
can
pre-register
here.