Edinburgh and Glasgow economy: is your firm losing sight of the one key rule?
"At the heart of every big deal is the client.” This is a point which Michael Stoneham, a banking and finance partner at Brodies, returns to repeatedly when discussing how to successfully negotiate Scotland’s biggest deals.
He says: “Obviously, a high level of legal expertise and technical knowledge is required, but to be a successful lawyer in the bigger deals you also need to be equipped with a range of important softer skills.
“These include communication, understanding, empathy, personal engagement and the art of persuasion, among many others. Above all, one must be able to see the deal from the client’s perspective.”
The term “big deal” can be applied to every client sale or purchase. For a smaller client, a deal can “feel” big and in legal terms it may involve the same type of work and greater pressures on costs compared to larger client deals.
However, in most cases, a big deal usually refers to a more complex process of buying or selling. The likelihood is there will be multiple internal teams involved, so, for example, a deal involving the sale of a company might include the corporate team to complete the deal, the real estate team to secure the premises, the employment team to work on employee contracts, to name a few.
Stoneham says: “It is likely there will be many parts that need to interlock for the successful outcome of a bigger deal. In addition, the chances are the deal will be time critical and it may be a highly visible client that has a public reputation to uphold.
“The biggest deals can be very complicated and require many hours of negotiation and discussion on behalf of the client.”
Lawyers require an armoury of skills that will be called upon throughout the process of a deal.
Stoneham says: “At the outset, a lawyer needs to have an intuitive understanding of the client’s aims and constraints. Being a good listener is key so that you can better understand how a client does business and what their aims are.
“You need to be able to see the deal from the client’s perspective.”
Excellent communication is another vital skill. Stoneham explains: “We are partnering the client through the deal and they will not be legal experts so a lawyer must be able to explain the jargon and processes in a non-technical way.
“Lawyers must be effective in making the client feel confident in the process of the deal and the handling of the legal issues.”
Lawyers need to be problem solvers, too. Stoneham says: “In many big cases you need to break down a deal into different parts and steps, then unlock the issues and find ways forward. The successful deals will be those that have been perfectly reassembled, rather like a completed jigsaw.”
Drafting skills are another vital component of a successful deal. From the earliest days as a lawyer, their ability to draft a legal document is carefully honed.
Stoneham says: “A commercial document is a legally binding commitment and this must be perfect. It is something that lawyers are required to thoroughly learn and grasp.”
No two deals – or clients – are exactly the same, which means each one must be treated as an individual case.
Typically, a lawyer will need to draw on their experience and accumulated knowledge over many years to be able to negotiate the biggest deals. Commonly, a legal team will include experts relevant to the client’s business sector.
As an example, Stoneham has more than 30 years’ experience of a wide range of banking and finance in Scotland and England. His specialist fields are energy and infrastructure finance.
He says: “Many bigger deals have tight timescales and it’s important that the legal team has prior experience of the specific sector. Many lawyers have specialisms.
“As well as having a deep understanding of the legal technicalities and processes of that sector, they can also introduce creativity in developing solutions based on past experience.”
While legal skills and experience are key components of successful deals, so too is a lawyer’s personality. Stoneham says: “A lawyer should have a calm confidence and a personable manner. They should be good listeners and empathetic communicators.
“They should be able to find the right tone and approach to engage with each client, too. For example, different cultures expect different approaches to communication.
“Negotiation skills are paramount as well and these need to be adapted to suit the deal.
“On top of all this the lawyer must keep the deal momentum going. They require stamina, determination and perseverance to make sure the deal moves to completion and within a set, often tight, timescale.”
Having broken a deal into various parts for effective problem solving, the lead lawyer will need to bring all the pieces back together to complete the deal.
Stoneham says: “A good lawyer will be able to step back to see the bigger picture, to take the sum of all parts so as to realise a successful deal.
“The lawyer will be driven to ensure a deal succeeds for the benefit of the client and also because this will likely lead to new business. Reputation brings new business.
“With every case it is important to reflect on lessons learned and to evaluate the process. Then it will be time for a celebration, for the client and our firm.
“Negotiating Scotland’s biggest deals can be hugely intensive and time consuming but very rewarding. When all the pieces come together successfully it’s a great feeling.”
PROFILE: Shuna Stirling
Shuna Stirling is head of corporate and commercial at Brodies and has over 20 years’ experience advising on corporate and commercial law, including advising on general corporate transactions, acquisitions and disposals, property-based investment work, joint ventures, private equity, governance matters and restructurings.
Stirling’s experience extends across many sectors, including food and drink, healthcare, energy, manufacturing, hotels and leisure, real estate and the motor industry.
What personal qualities are needed to ensure the success of a deal?
“A lawyer should possess excellent people skills; a good relationship with the client is key to the success of a deal and makes the process much easier for all involved. A client should feel comfortable with their lawyer, so approachability and an ability to explain technical processes in a straight-talking, non-legal way is important. Being responsive also ensures that the deal moves to a timely completion and any unexpected issues or changes are tackled head on.
These qualities, combined with technical and commercial know-how, ensure that the client’s business needs and ambitions are looked after in the best way possible.”
PROFILE: Doug Crawford
Doug Crawford is a partner in Brodies’ corporate team and heads the firm’s private equity offering, applying over 25 years’ experience as a transactional private equity lawyer.
He acts in acquisition and sale transactions, management buy-outs and buy-ins, development capital and capital release deals, and venture capital transactions for management teams, buyers, sellers, and funding institutions.
What personal qualities are needed to ensure the success of a deal?
“In my area of law, clients primarily seek bespoke commercial advice rather than the commoditised production of legal documents. Listening is the first step, followed by questioning using the benefit of experience of similar companies in similar situations.
Then the key is to give an opinion; to advise. Not necessarily a legal opinion, but overall commercial input, which forms part of the dialogue between the client and advisor and helps to shape a well-executed deal.
So, for me, the key qualities to add value to any process are listening and questioning, followed by distilling the information, thinking laterally about the implications, and finally communicating and providing advice to the client. “
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