Event Recap with Steven Haas

Steven's headshot

Steven Haas is a partner and co-head of the firm’s mergers and acquisitions team at Hunton Andrews & Kurth.  He is also an adjunct faculty member at Richmond Law where he teaches Mergers & Acquisitions.  At the Richmond Law & Business Forum’s event on life as a mergers & acquisitions attorney, he addressed why private company deals can be more complicated than public company deals, the importance of deal point studies and client research, and whether only large firms have M&A practices.  Here are a few highlights from that conversation.

Mr. Haas represents both public and private companies in mergers and acquisitions, but he stated, “Private company deals are usually the harder ones. There are fewer norms about what is standard in a purchase agreement. There's much more due diligence that has to be done than with a public company that is subject to SEC reporting obligations.  Assuming that public companies are compliant with law, the information's already out there, it's in the market. Private companies don't have that type of public and vetted disclosure, so they require much more due diligence and more negotiation. The purchase price mechanics can also be very complicated.”

He also explained that mergers or acquisitions involving start-up companies can be the most difficult because, in many instances, “they have not invested in lawyers until it's too late.”  As a result, for example, they may not have properly issued their stock, which can be a time-consuming process to correct.

Mr. Haas also told students about deal point studies, which he described as “one of the most helpful things in terms of managing client expectations.”  A deal point study is a study of the prevalence of certain provisions in publicly available M&A transactions during a specified time period.  There are deal point studies for public and private deals, and they are available through the American Bar Association’s Business Law Section and other sources.

He explained that, before deal point studies were common, there was “some level of uncertainty among lawyers, because you didn't really know what was customary. You only knew based on your personal experience.”  Clients often want to know “what’s customary to make sure someone's not being unreasonable.  When you can say that the median size of an escrow is 10% of the purchase price, for example, that goes a long way with clients” to help them understand the issues and develop negotiating positions.

Additionally, he advised new lawyers to always research their clients’ businesses. He explained, “if you're working with public companies, you have a huge advantage because everything about that company is available in its SEC filings. So when we are engaged by a public company, the first thing we're going to do is obtain their annual report, which they've had to file with the Securities and Exchange Commission.  That's the report they're required by law to give to their investors every year, and it has a tremendous amount of valuable information.”

Finally, Mr. Haas addressed whether only large firms handle M&A work.  He stated that, as a general rule of thumb, you need a firm with diverse practice areas that are implicated in M&A transactions.  This type of work “requires many areas of expertise, and the M&A lawyers are often serving as quarterbacks because we have to coordinate with subject matter experts on employee benefits, labor, intellectual property, real estate, tax, antitrust, etc.”  He also stated, however, that while M&A work is predominantly handled by larger law firms, there are smaller law firms (e.g., less than 10 lawyers) who routinely represent buyers and sellers in M&A transactions.