August 14, 2020

Third-Party Opinion Practice

Third-Party Opinion Practice

Cost-Benefit Analysis and Third-Party Opinion Practice
     Jonathan C. Lipson, 63(4): 1187–1222 (August 2008)
Practitioner literature and bar association reports frequently exhort lawyers and clients to use "cost-benefit analysis" ("CBA") to answer important questions about third-party closing opinion practice, including whether to have an opinion in a given transaction at all. Yet, this literature rarely considers seriously what is meant by "cost-benefit analysis" or whether it is in fact an appropriate decision tool in this context. This Article fills that gap by examining what CBA can—and cannot—do for third-party closing opinion practice. Among its benefits, CBA should help to orient discussions about whether to have a closing opinion around an opinion's economic and informational value rather than claims that an opinion is (or is not) "traditional" or "market" in a particular context. But CBA is an imperfect tool. Cost-benefit analyses can be manipulated to mask costs or to exaggerate benefits. More fundamentally, CBA may treat ethically questionable practices as cost-justified and may fail to account for certain important professionalizing benefits of closing opinion practice. The Article suggests ways that CBA can and cannot help to improve closing opinion practice.

Report on the 2010 Survey of Law Firm Opinion Practices
      Legal Opinions committee, ABA Business Law Section, 68(3): 785-820 (July 2013)

Common Qualifications to a Remedies Opinion in U.S. Commercial Loan Transactions
     Gail Merel (Reporter), A. Mark Adcock, Robert W. Barron, Willis R. Buck, Jr., Jerome A. Grossman, Louis G. Hering, Timothy G. Hoxie, Andrew M. Kaufman, Reade H. Ryan, Jr., Philip B. Schwartz, and Stephen C. Tarry; 70(1): 121-160 (Winter 2014/2015)
As a condition to the closing of many types of business transactions, one or more of the parties may be required to provide written opinion letters of counsel for the benefit of other parties to the transaction. These opinions are often referred to as “third-party” opinions because the opinion giver renders them to a party or parties other than the opinion giver’s own client. These opinions may cover a range of issues, including, among others, the entity status and power of, the due authorization, execution, and delivery of the transaction documents by, and the enforceability of those documents against, the opinion giver’s own client in the transaction. Oftentimes the discussions regarding the scope of these opinions and the extent to which they will be qualified are time-consuming, and the resulting costs, borne by the client whose counsel is asked to render the opinions, increase substantially as negotiations proceed. This article, focusing on third-party opinions rendered in the context of U.S. commercial loan transactions, considers a number of qualifications that for various reasons, in the experience of the authors, opinion givers commonly include and opinion recipients and their counsel commonly accept. The authors believe that the identification of commonly used and accepted qualifications in the U.S. commercial loan market can help to streamline the opinion process in many transactions.

Sample California Third-Party Legal Opinion for Venture Capital Financing Transactions
     Opinions committee, Business Law Section of the State Bar of California, 70(1): 177-216 (Winter 2014/2015)

No Registration Opinions (2015 Update)
     Report of the Subcommittee on Securities Law Opinions, Federal Regulation of Securities committee, ABA Business Law Section; 71(1): 129-138 (Winter 2015/2016)

Cross-Border Closing Opinions of U.S. Counsel
     Legal Opinions committee, ABA Business Law Section; 71(1): 139-226 (Winter 2015/2016)

A Streamlined Form of Closing Opinion (2019 Update)
     Donald W. Glazer and Stanley Keller, 74(4) 1065-1076 (Fall 2019)
In 2005, we published an article on the Boston Bar Association Streamlined Form of Closing Opinion. As described in the article’s introduction, the streamlined form was based on the Legal Opinion Principles drafted by the Legal Opinions Committee of the American Bar Association’s Business Law Section (the “ABA Legal Opinions Committee”). Now that the Statement of Opinion Practices (the “Statement”) and its related Core Opinion Principles (the “Core Principles”) have been published, we are updating that article and the streamlined form to reflect the Statement and Core Principles and developments in legal opinion practice since 2005. As indicated in the Statement’s explanatory note, the Statement, which has been approved by numerous bar associations and other lawyer groups, updates the Legal Opinion Principles in their entirety and selected provisions of the Guidelines for the Preparation of Closing Opinions, which also were drafted by the ABA Legal Opinions Committee. The Core Principles are derived from the Statement and are designed to be incorporated by reference in or attached to a closing opinion by those who desire to do so. Among other changes, the updated streamlined form of closing opinion incorporates the Core Principles in place of the Legal Opinion Principles.

Development of Legal Opinion Practice as Reflected in The Business Lawyer
     Sylvia Fung Chin, Arthur Norman Field, Donald W. Glazer, and Stanley Keller, 75(3): 2041-2052 (Summer 2020)
As reflected in the reports published over the years in The Business Lawyer, third-party legal opinion practice has developed significantly during The Business Lawyer’s seventy-five years. That development was prompted by a seminal article on legal opinions published in 1973 in The Business Lawyer. Since then, The Business Lawyer has published numerous reports on legal opinion practice by the ABA Business Law Section’s Legal Opinions Committee and other bar groups, as well as many articles on legal opinions. Four participants in the development of legal opinion practice describe that development in this article and predict what might be expected going forward.