A focus on litigation in TV and movies is unsurprising in that the courtroom provides a stage for drama. What is surprising is that law schools, the training ground for real lawyers, have traditionally shared a similar focus on litigation. This is problematic because many law students will become transactional lawyers, not litigators.
Transactional law is diverse and varied. It features a number of areas outside litigation, including mergers and acquisitions, securities, finance, real estate, tax, estate planning, and intellectual property to name a few. While it’s important for transactional lawyers to know the law and where to find it, there are a host of other skills and research resources used by transactional lawyers that are less visible—or nonexistent—in the law school curriculum.
Legal research courses have been just as guilty as the general law school curriculum of favoring litigation. Of late, law schools and legal research classes have done a better job at adding transactional law offerings for their students, but there’s still a way to go. Because of that deficiency, this column provides you with some resources you’ll likely use if you enter a transactional practice. The list won’t be comprehensive, and because of limited space focuses primarily on corporate transactions, but hopefully it will get you started.
EDGAR. Edgar Allan Poe is the most famous Edgar in America, but the SEC’s official database—EDGAR—is vying for second. EDGAR offers free access to public company filings. These documents give researchers insight into a company’s financial condition and operations. A public company’s Form 10-K, for example, contains an annual report of the company—usually including audited annual financial statements—that is critical to investors and others doing due diligence.
Located on the SEC’s website, EDGAR is a government website through and through—the information is free, but the user experience leaves something to be desired. If you know the company you’re interested in, a simple company name search will get you the required filings for that company. Searching for “Facebook,” for example, will allow you to see Facebook’s Prospectus and other documents related to its recent IPO. While Facebook has been public for less than a year and therefore hasn’t yet filed a 10-K, your search will allow you to see other company filings such as 10-Qs, which contain quarterly reports of the company, and 8-Ks, containing disclosures by the company of material events since the last quarterly or annual filing.
EDGAR has other search capabilities as well, but they take some time and patience to master. Because of this, commercial companies have taken the information available in EDGAR and repackaged it in more user-friendly databases. This usability comes at a cost, but many lawyers, find it to be worth the price. Some of the alternatives you may see are LIVEDGAR, Knowledge Mosaic, Morningstar, and Bloomberg Law.
In-house precedents. For transactional lawyers a “precedent” is a transactional document, such as a purchase or loan agreement, that has been used in a previous deal—not to mention a term that you’ll become quite familiar with in a transactional practice. Transactional lawyers use precedents as a starting point when drafting most transactional documents. They can then modify the precedent to meet the needs of the current situation, allowing them to avoid coming up with everything from scratch.
As you can imagine, lawyers who have worked with corporate clients for some time have created a number of these documents. So, when in need of a precedent, transactional lawyers often turn first to an in-house database that contains documents from prior deals. Understanding how to access these in-house precedents is important, but will differ from employer to employer. Check with your employer for details.
Practical Law Company. One transactional law resource that has gained popularity in the United States over the last several years is the Practical Law Company (PLC). PLC provides users with a number of useful resources in a variety of transactional areas. Especially helpful for law students and young lawyers are PLC’s “Practice Notes,” which provide great background information for those trying to get up to speed on a certain type of document or practice.
For example, imagine you’re involved in an issue dealing with a poison pill. You’ve heard of poison pills and probably even studied them in Business Associations. Unfortunately, this knowledge isn’t as fresh now as it was when you were cramming for finals. That’s where PLC’s “Practice Notes” comes in. Head to the section on poison pills and you get a great explanation from an expert.
Now say you’re tasked with helping draft a merger agreement. PLC can help there, too. PLC has a number of forms that provide example clauses as well as expert drafting notes that can help in the creation of important transactional documents. In this scenario, you’ll find a few different examples of merger agreements to choose from to help you on your way.
PLC also has a number of other useful resources for the transactional lawyer. In its “What’s Market” tool, lawyers can compare different deals to determine what types of clauses and terms are being used in deals similar to their own. One of the best things about PLC for law students is that it’s free. Just go to PLC’s website and sign up for a free student account. Doing so will give you access to a resource you will likely have in practice, as well as a great place to start learning some of the things you’ll need to know as a transactional lawyer.
Bloomberg Law. One of the newer players on the legal research scene is Bloomberg Law. It has made a significant investment in the legal market and hopes to compete with Lexis and Westlaw. One area where it will likely have an advantage because of its financial and business resources is in transactional law. Time will tell how widespread Bloomberg Law becomes, but Bloomberg has recently inked deals with megafirms DLA Piper and Jones Day.
As mentioned above, Bloomberg Law provides access to SEC filings in a cleaner manner than EDGAR. Additionally, Bloomberg Law provides some functionality similar to PLC through its DealMaker tool. DealMaker has many sample documents and clauses and also provides the ability to compare clauses between examples, doing so with a nifty redline function.
While not cheap to lawyers, Bloomberg Law is free to law students. You may have already received a password from your law library or you can go to the Bloomberg Law website and sign up yourself. It’s a good idea to get signed up because not only can you experiment with some of the tools I’ve mentioned, but Bloomberg Law allows law students access during the summer—no matter where you work—and six months after graduation.
As my disclaimer from earlier noted, this column does not and could not attempt to describe all the legal resources that exist for transactional lawyers. In the corporate context alone, there are many more that could be discussed, including ABA Deal Points Studies (see box), law firm client memos, sharkrepellent.net, and thecorporatecounsel.net. The list could go on and on. Becoming familiar with these types of resources will help you on your way to becoming a successful transactional lawyer. Because litigation isn’t the only game in town, no matter what you’ve learned from television.