Automating Legal Documents for Due Diligence

Legal due diligence goes beyond rolling the tires of an automobile. It is a thorough review that includes lawyers and CPAs who examine documents as well as facts. It requires the examination of a wide range of areas of focus, including a legal review of important contracts, litigation liabilities intellectual property, regulatory compliance www.medicaldataroom.com/top-8-vdr-features-every-ma-team-needs/ and corporate records as well as financial reviews of accounting policies and financial statements and tax returns. It also involves a thorough review of the management, organizational structure and the product, service marketing, sales, facilities and equipment.

Legal due diligence can be a long-winded process, depending on the nature of the business and the magnitude of the transaction. This is particularly applicable to large public companies with virtual piles of documents that lawyers need to sort through. This is why a lot of legal departments have begun to utilize technology to simplify and expedite the process, for instance an online platform for document review which integrates with AI tools.

Before starting the legal due diligence process, create the structure and goals for the investigation. It is beneficial to make a checklist of the areas that need to be addressed and ensure that the legal team is able to agree on a plan of action with the business owner. Prioritizing which areas need specialist input is important. For example legal due diligence review of an IP holding company might include questions from an intellectual properties specialist to determine whether the company is in possession of any significant patents or other intellectual property rights, and whether there are any infringement lawsuits currently pending or threatened.