Transactions, Part 2: Intersections of Corporate and Litigation Practice

April 4, 2012

Small Law: Independent ThinkingYesterday, Westlaw Insider featured the insights of Matthew Wegner, a colleague who touches base with me as a transactional advisor—and I with him as my client matters require litigation advice.  For small law firms or solo shops focusing on a transactional practice, being able to access business litigation advice for your clients regularly is essential.

Some of the most memorable transactions I have worked on as a corporate attorney have involved proxy fights in which opposing slates of boards of directors have competed for control of the same company.  Even without litigation, these transactions are referred to as “fights” for a reason – they typically have a winner and a loser, with the result often taking shape in the form of settlement.  In addition, litigation is frequently considered, relied on as a credible threat to protect rights, or actually commenced at some point in these transactions.

While actual threats and pending suits faced by your clients need to be addressed, just as important is providing advice prophylactically to your clients to prevent future litigation.  This involves both being as informed as possible as a corporate attorney, and tapping business litigation expertise regularly.

This can be done in a variety of ways, for example:

  • including one or more business litigators within your firm
  • having a solid mutual referral relationship with litigators you trust implicitly
  • forming a strategic alliance with a business litigator

Transactional attorneys should protect against potential litigation across many areas of their practice.  Here are just a few examples:

  • Exercise of fiduciary duties.  Directors and officers are required to manage companies while upholding fiduciary duties to the shareholders or members of the companies they lead.  While remembering these duties is one thing, executing them in a manner that protects against potential claims is another matter that should be closely considered – for example, in forming a special board committee to approve transactions where some board members may have interests.
  • SEC filings.  Disclosure in public companies’ filings with the Securities and Exchange Commission involves adherence to countless rules and regulations, it is equally important to focus on the big picture –how to balance the desire to keep investors as informed as possible with the possibility of future litigation stemming from statements in the filings.  “Safe harbor” provisions for forward looking statements deserve more attention than they are sometimes given and should be tailored to appropriately avail the company of the “safe harbor.”
  • Board minutes.  Seemingly routine, drafting corporate minutes can, and often does, have important implications – not only for potential future transactions, but for avoiding potential litigation as well.

Having close ties with business litigation attorneys – both within our outside our small transactional firm – has been invaluable to clients and has made our practice more enjoyable. 


How do you handle transactional/contract inquiries that come into your litigation firm… or litigation inquiries that come into your transactional practice?  Comment below.


Related Links:

Transactions, Part 1: Intersections of Corporate and Litigation Practice >>


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