Three Ways to Draft M&A Agreements with Confidence

With predictions for a busy M&A year ahead, learn how transactional attorneys can thrive with new approaches to drafting workflows.

March 23, 2021

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[Learn more about how Draft Analyzer uses AI and machine learning to benchmark draft language against the market standard.]

With the new year underway, the M&A forecast for 2021 deal activity is strong. And as M&A deal flow continues at pre-pandemic rates, transactional attorneys will continue to face the ever-present challenges of keeping their contract drafting workflows efficient, which includes quickly and effectively tracking market standards.

The search for benchmarking information is often elusive and time-intensive, and existing workflows and tools can leave deal attorneys feeling insecure about their drafting decisions. To meet expectations and strengthen confidence in both the drafting and negotiating of agreements, attorneys must broaden their current approach to M&A drafting workflows.

These are the ways attorneys leveraging Draft Analyzer can streamline review and navigation, access integrated drafting guidance, and instantly benchmark draft language against the thousands of merger agreements filed in EDGAR.

Prepare drafts with precision and confidence using AI-powered Draft Analyzer on Bloomberg Law.

Despite the complications and business disruptions caused by the global pandemic and the wider economic downturn, pending and completed M&A deal volume dropped only 7% in 2020.

“The impressive number of M&A deals that made it to the finish line in 2020, as well as a typical number of deals that fell apart, is cause for optimism,” wrote Grace Maral Burnett, legal analyst on Bloomberg Law’s transactional team, in a recent analysis. “They paint a picture of how resilient the M&A market and dealmakers have been amid this pandemic.”

In 2021, one trend to watch closely is the rise in SPAC mergers. As Burnett notes, a record number of publicly traded special purpose acquisition companies entered into definitive agreements to take over private targets in February.

[New privacy and cybersecurity rules are bringing more scrutiny and complexity to the contract process. In our webinar, Privacy, Cybersecurity & Contract Drafting: Maturing Approaches for 2022 and Beyond, our panel of expert practitioners provide a practical view into significant operational trends and provide guidance on navigating the complex implications for contract drafting and approval processes.]

2. Examine Data-Gathering Inefficiencies

Not surprisingly, draft recipients and those who hold the pen alike express a lack of comfort with current drafting workflows. In a 2020 Bloomberg Law survey of 138 law firms and in-house attorneys who spend at least 20% of their time on M&A tasks, more than half had concerns about the division of labor for drafting principal M&A deals. But workload and staff constraints were impediments to taking on more work.

There is no better illustration of drafting inefficiencies than the never-ending quest to identify market-standard language for particular clauses. In a scene familiar to transactional attorneys, the search for market-standard language can be manual, time-consuming work, as associates scour transaction after transaction.

[Learn about more of the top workflow challenges M&A attorneys are facing in our report.]

3. Harness the Power of Technology

Driven by machine learning and natural language processing, Bloomberg Law’s Draft Analyzer provides efficiencies and insightful analysis that help streamline an attorney’s workflow.

Draft Analyzer broadens the toolkit available to lawyers working on M&A transactions to maximize efficiencies across all four corners of the merger agreement drafting workflow: reviewing, drafting, writing, and negotiating.

These are the five integrated features that allow M&A attorneys to stay on task with one tool on one research platform.

  1. Interactive Clause Outline

Upon document upload, a clause outline of the entire merger agreement is displayed in the left panel. Each section of the clause outline is hyperlinked, jumping the user to a given section and clause.

  1. Definition Extraction

All definitions within the document are hyperlinked, allowing users to surface them with a single click. Draft Analyzer also identifies the section where the term is defined, such as in the preamble, clause, or other given section.

  1. Market-Standard Analysis

This feature offers real-time insights into market criteria – specifically, how this clause is most commonly enunciated in merger agreements filed in the EDGAR database.

  1. Individual Paragraph Analysis

Driven by machine learning, the tool examines a particular paragraph against similar paragraphs within other merger agreements. Users can discover how their text compares to linguistically similar paragraphs filed in the EDGAR database.

  1. Integrated Practical Guidance

With Bloomberg Law’s vast digital library of M&A-specific guidance integrated into Draft Analyzer, the user never has to exit the system to access sample agreements, document descriptions, drafting guides, checklists, or topical overviews.

[Get details on how these features will reduce the time spent drafting merger agreements and give attorneys a high level of confidence in their finished product.]