With communication channels changing and remote options increasing, we’re certainly not going back to the “good old days” of page turns and in-person closes. Combine that with fax rooms and FedEx turnaround times, while certainly “old”, were those days even “good”? Arguably no – traveling across the continent to lockdowns dragging briefcases while fearing that your documents (on disk) will be destroyed by metal detectors at airports is not something I want to come back.
Do not worry. This is not a collection of stories “At the time, I walked uphill to the courthouse, back and forth – in the snow”. I’m not interested in going back to the “good old days”. However, that’s not to say there weren’t some bright spots from those days that we should try to salvage or recreate that might make our jobs easier and even bring smiles later in our careers.
For me, there are a handful of transactions that I remember vividly. However, aside from the obvious, expensive, multi-foreign jurisdictional deals, it’s hard to understand why some transactions are easily recallable while others are fuzzy at best. Following a recent visit to one of my longtime counterparts, I’m finally able to put my finger on why some deals stand out more than others: it’s because “at the time” , in addition to documents, transactions had faces, literally and metaphorically.
Transactions often featured “kick-off” calls where all the business people and lawyers discussed the process, general timelines, general business points before drafting, etc. would often have in-person “page turns” to go over questions/problems with the draft. After a round or two of the document with the borrower and attorney, we almost always had the “everyone” call where we cleared out any remaining issues – with time often measured by the number of bathroom breaks instead of hours. While the All Hands calls were mostly painful, they were, in their own way, extremely effective. In two or three toilet breaks, the real business problems were quickly separated from the commercial problems generated by the lawyers, and the legal problems were often quickly eliminated, because “it’s the market” and “we get that in every transaction” just wouldn’t work. The business people on the call had to get the point, so you had to concisely explain the issue and why it really mattered to your client (and it really had to matter, since your client – and the client’s your client – were on the call). Plus, with everyone on the call, permanent stalemates were rare, since as one of my clients once told me, “At some point, all legal issues end up being business issues. “, and that the ultimate decision makers were on the same call (and no one wanted an “all-hands” callback), the issues were resolved as soon as possible.
After the “all hands” call, closings were mostly done in person, so ultimately you could meet opposing counsel (and the borrower) face-to-face while final issues were negotiated. . While in-person negotiations presented their own challenges, the vast majority of the time, the opposing attorney you may have struggled with during the process didn’t seem so difficult once you were in the same room, eating in the same, picked-on fruit plate at 2:00 a.m., working toward the same goal of closing the deal before the 9:00 a.m. funding deadline. Whether it’s just a misery-loving company or the fact that it’s conversely harder to be unreasonable the closer the parties get, I think it would be hard to argue that these situations have clearly shown that our business is a relational business. .
I recently made this memorization of transaction correlation in a meeting with Tom Draper. Tom is a partner at Foley Hoag LLP and prior to that organized the finance group of Ropes & Gray and served for a long time as head of the firm’s finance group. He’s a great lawyer and one of the greatest people in our business.
He called to let me know he was going to be in town visiting clients and wondered if he could drop by to say hello to me and the team. Tom has done this before, and for those of you who don’t know Tom, you really should.
After we walked around, we sat down and finally talked about how long we’ve known each other and tried to remember our first deal together. We decided it was around 1998: I was representing a banking syndicate that was funding Tom’s financial sponsor client who was buying a side business from its founders.
The purpose of detailing the transaction is, admittedly, to show our collective memory of the transaction and, more importantly, to provide insight into what I consider to be an “ideal transaction” – certainly ideal enough for two “adversaries” to meet. not only remembered so well (25 years later), but also enjoyed the experience (and the work experiences that came with it) enough that we got together to hang out for an hour whenever one of us was in town .
On the business side, the sellers were two brothers who started with a small storefront in Times Square – long before the Disney Store was a neighbor. Their business model was to secure brand licensing deals with major league sports, Disney, Warner Brothers, etc. and affixing these logos to hats, sports bags, etc. – essentially selling $30 products for what would have been $5, but for Mickey Mouse.
Why memorable? First was the uniqueness of the collateral and the process for arriving at an acceptable close. Tom and his team understood the collateral concerns of lenders. They figured out that without the licensing consents and some ability for lenders to notionally liquidate collateral with the brands, lenders just had a bunch of generic $5 hats and not $30 Mickey Mouse hats. As we were on opposite sides of the transaction, we worked as a team to secure as many consents as possible.
Why memorable? Second, the visual aspect of the closure. The closing took place in Ropes & Gray’s “conference space” in New York – before Ropes had an office in New York. At that time, they had three or four dedicated conference rooms (with staff) for the purpose of closures. The acquisition transaction took place in one room and the financing transaction took place in another room, each with multiple aluminum accordion file racks covering the closing tables.
Why memorable? Third, I remember working directly with Tom and his team in the same room. I remember how patient he was with me dealing with the usual 11th hour issues. He could have tried to use his greater experience and significant client leverage to push me (and the lenders) to get the best possible deal for his client. Instead, he would usually approach a discussion by mentioning what he believed to be our concerns so that there was a general understanding that we were each trying to find the answer that was in the best interest of our customers and the transaction. in general. A big lesson was learned by me that day: finding a mutually acceptable solution does not mean that you don’t get the best possible deal for your customer – often the mutually acceptable solution is the best solution for your customer.
Why memorable? Finally, understand my role in the big picture of the transaction. After closing, I was the only person left in the fundraising room when one of the brothers came in and started taking pictures of the finished accordion folders with his disposable camera. He smiled at me and said, “One day I want to show my kids what it was like.” After preparing the flow of funds, I was aware of what he and his brother had earned that day. But what struck me most was realizing that it wasn’t
our transaction; we each had a role in histransaction.
Communication channels continue to evolve. We now have remote working options and who knows what will come next? It’s hard to say these are negatives, but the same way my cell phone went from being an inexplicable blessing that let me break the tether to my literal desk to, years later, becoming an unbreakable tether At my ubiquitous “office”, increased communication options have their pitfalls.
As communication options have increased, it appears to have had an adverse effect on the ability to make personal connections with clients, opposing counsel, their clients, etc. In hindsight, those face-to-face personal connections over the years resulted in holiday cards from borrowers (and, in some cases, became my clients years later), friendships with great lawyers and people like Tom and, perhaps most importantly, to often transform difficult working relationships with people “on the other side of the table” into more productive and enjoyable working relationships. Personal relationships not only benefit our respective clients (since we all know these transactions go more smoothly), but it also makes our jobs easier and more enjoyable Who doesn’t prefer to work in front of people they like?
The costs, paper volume, and various other inefficiencies of in-person closings are a story few would want to keep. The “good old days” of all-hands “page-turnings” have been replaced by phone calls, which have mostly been replaced by emails, in the same way that in-person closures have been replaced by electronic locks. This is certainly progress, and there is no reason to look back. However, some vestiges of the transactional practice of the “good old days” deserve to be preserved.
Our business is a relationship business and, to quote my longtime partner and friend Mike Mascia, “Everyone is a potential referral.” With that in mind, instead of sending emails, sometimes pick up the phone. If you have the opportunity at a conference to talk with someone you’ve worked with but never met (especially someone you might find “difficult”), talk to them, ask ask him questions about things other than work. Although you might not make a friend for life, you could. While this person may not become your new favorite person to work across the way with, I suspect that at the very least, your next transaction with them will be a little smoother, making your work experience proportionately more enjoyable.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.