Making an Impact During Document Review and Due Diligence

November 5, 2015Articles The Legal Intelligencer

Reprinted with permission from the November 5 issue of The Legal Intelligencer. (c) 2014 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.

Being an attorney is often considered a glamorous profession. Indeed, lawyers are frequently dramatized in popular culture and media. Famous actors such as Gregory Peck, Jimmy Stewart, Paul Newman, Henry Fonda and Tom Cruise have all romanticized the role of an attorney. We all have our favorite legal drama, whether it is a favorite novel, play, TV show, or movie (and if not, we highly recommend "My Cousin Vinny"). More practically, "attorney" is routinely ranked as one of the most prestigious occupations in the world. Yet, surely many of you by now have realized there are many aspects of this job that are not even slightly glamorous, but are rather grueling, tedious and quite frankly unexciting. And those tasks, for better or worse, often fall on young lawyers.

In particular, document review and due diligence are the bread and butter of many junior attorneys. However, these assignments can be extremely monotonous. Document review often requires litigators to sift through thousands of documents, while due diligence requires transactional attorneys to prepare for a deal by compiling a multitude of corporate records, contracts and other documents.

There is a temptation during these types of assignments to turn your brain off and just complete the tasks without exercising any sort of critical thinking. Doing so, however, would be a big mistake. Document review and due diligence assignments are rife with opportunities to have a meaningful impact on a matter and stand out to partners and clients. Especially on larger matters, where there can be hundreds of thousands of documents to comb through, you are likely the first (and sometimes only) attorney who will look at certain files. Thus, document review and due diligence assignments can be an opportunity for you to shine by showing that you have a firm grasp of the fine details of the matter and are keying in on the meaningful documents.

Document Review: Set Yourself Apart

Before beginning a document review, take the time to learn about the case. Meet with the senior attorneys on the matter, ask background questions and review the central case documents to get to know the issues and parties involved in the litigation. Understanding how the document review fits into the larger case will allow you to more easily identify key facts and flag important documents that might otherwise be overlooked. Going beyond just simple issue-spotting and actually thinking through how certain documents fit into your team's overall strategy and theme will help you have a meaningful impact on the litigation.

While it is critical that you do not rush through the documents and be as thorough as possible in your review, time pressures are prevalent during document review assignments. It is important to remember, though, that understanding the issues can make you a more efficient reviewer because you will be able to more quickly spot key issues and separate out irrelevant documents. In addition, taking the time to understand and master the document review platform you are using will significantly increase your productivity on a document review assignment.

Typically, attorneys are trained on the particular document review platform being utilized before beginning the review process. During these trainings, pay close attention to distinguishing features about the particular document review software and ask a lot of questions about the functionality of those features. There are many different document review platforms (for example, Relativity, Case Logistix, Concordance, etc.) and each has many bells and whistles that are designed to significantly improve your efficiency when reviewing documents.

From the beginning of a document review, practice using the various tools and functions within the review platform to determine which would be best utilized on that particular assignment. As a litigator, you may be tasked with various types of document reviews, such as reviewing a client's documents for relevance and privilege in advance of a production, reviewing opposing counsel's document production for key evidence or conducting an internal investigation. These assignments can differ greatly in their scope and purpose. Some may require you to click through and tag tens of thousands of documents, while others are search-oriented, requiring you to quickly locate documents related to specific issues. Make sure you understand the goals and expected work product. Then you can utilize the proper tools to improve your efficiency and productivity throughout the assignment.

Document review can seem like a menial task, but if you think critically, work efficiently and understand how your assignment fits into the larger litigation, you will set yourself apart from other young lawyers and showcase your analytical skills to the more senior attorneys on the team.

Due Diligence: Think Big

Compiling documents during the due diligence process is an important part of any deal, from a bank loan to a corporate merger. In connection with the deal, the parties will perform a due diligence review of certain information and documents relating to the business affairs and operations of the company.

The requesting party will generally send a detailed list to the other party with information it will need to perform a due diligence review. Throughout the life of the deal, the party may identify additional information it wishes to review as potential issues arise. The categories of information gathered generally include: corporate records; government regulations and filings; auditors' reports and financial statements; pending litigation; material contracts; licensing agreements; real property and intellectual property records; and environmental matters.

If you are on the side of the deal where you are gathering information, this can seem like a tedious job. Your role is to request and gather various documents and organize them in a database where all of the parties can review the information. Your firm may set up an extranet site to use for the specific deal, or the client may be working with a third-party service provider. Whichever the case, make sure you understand the functions of the database. This will save you time as you upload and organize the documents, which you will likely receive from several different sources. If you are in charge of the data room, the other parties and the attorneys with whom you are working will begin to rely on you for information. With this in mind, you should be familiar with the documents and the functionality of the data room so that you can quickly and authoritatively respond to requests and inquiries, which will help make you a reliable and important member of the team.

Being involved in the due diligence review process is an opportunity to work closely with your assigning partner or more senior associate, who likely has more familiarity with the client and the deal. Ask questions about the documents you are gathering, and try to understand how they could impact the deal. Due diligence review is a great way to learn about the client's business and operations. Sometimes, due diligence may also involve visiting a company's facilities or interviewing company employees. Although this may seem to be cutting into your busy day, it is an opportunity to create a personal relationship with the client. These types of interactions will show the assigning attorney and your client that you are professional, organized and care about the deal. If you learn about the company and create a relationship with the client, you are more likely to get staffed on the client's next deal.

If you are tasked with reviewing the documents, you will help determine how the submitted documents and disclosures relate to the purpose of the due diligence in the particular transaction. For example, you should review the contracts of the company to make sure continuing the proposed transaction does not violate any current agreements of the company. You should also look for legal issues that may affect the business decisions of the company. For example, an exclusive license agreement may interfere with the client's future business plans, and you and your team will need to advise the client regarding potential resolutions. Due diligence review is an opportunity for you to identify potential issues and discuss areas of concern with assigning partners and associates. They will appreciate that you are not merely checking off items on your due diligence list, but rather that you are thinking through the issues on behalf of the team.

Whenever you are getting bored, overwhelmed or simply annoyed about the amount of time you are spending reviewing or uploading documents, try to think about the bigger picture. The due diligence review is essential for the deal, and your team is relying on you to make sure all of the pertinent documents have been gathered and reviewed so that issues can be dealt with before the deal closes.

Reprinted with permission from the November 5 issue of The Legal Intelligencer. (c) 2014 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.