As usual, EDI’s Summer Meeting in New York was a great event with informative panels and fun networking. It was there that I had the opportunity to moderate a panel entitled, Buyers, Cellars & Wind-Downs, in which industry experts came together to discuss key issues and risks associated with ESI management, as well as the preservation expectations companies face during acquisitions, mergers, and divestitures. In this recap blog, I will cover the main stages that come about in these situations and key tips from session panelists.
Stage 1: Planning – When an acquisition, merger, or divestiture comes about there is a lot to take in and it can be challenging to organize all information, data, people, etc. Here are a few key items to gather from the start:
- Understand the company’s responsibilities.
- Understand the integration timeline.
- Understand who is leaving and when.
- Draft a list of questions and prioritize.
Speaking of questions, you will have several questions that you will want answers to before you can start integrating or divesting. Here are some of the top questions to ask in these types of situations (depending on the situation these questions can be added to and take a different form):
- What data sources and ediscovery tools do each of the companies have?
- What are the litigation profiles and records management processes for each company?
- Who owns the data and how will data preservation be handled moving forward?
- How will areas where you cannot get information be handled?
Stage 2: Integration or Divesting – After the information gathering, the teams, technology, and processes begin to integrate so that the companies can move forward as one entity. At this point it is critical to hit a few points:
- Ensure knowledge retention and make a plan for knowledge gaps. Get to those who may be leaving the company quickly before that knowledge disappears.
- Develop a plan for systems integration/divestiture and who will own what systems.
- Develop a team integration plan and assign key stakeholders. Make sure roles and responsibilities are clearly defined.
- Ensure naming conventions for cases are similar across the board.
- Send out a legal hold reminder for anyone on hold.
- Conduct consistent testing with records retention to ensure preservation is ongoing and successful.
- Look for policy synergies to get some quick wins.
Stage 3: Future Preparation – Being ready for a constant stream of M&A activity can be tedious. Here are three ways to proactively prepare:
- Establish strong relationships with the key players (M&A counsel, litigation counsel, records management, IT, and security).
- Establishing processes. If it worked once, it can work again. Find a model that works and stick with it.
- Create a checklist for new entities and their cases (incorporating responsibilities, integration, and general preservation/collection/production obligations).
- Leverage technology and take advantage of analytics.
Panelists agreed that there are three key practices to ensure a smooth process when it comes to mergers and divestitures:
- Get a seat at the table as early as possible so that you can get answers to some of the above questions.
- Stay nimble as there may be many unknowns.
- Use a reasonableness standard when making decisions throughout the process.
To continue this discussion or to ask questions, please connect with me at firstname.lastname@example.org.