Keys to a Successful Corporate Acquisition: A Roundtable Discussion

Editor's Note: Buy-side acquisitions can be a critical component of a company's growth strategy. Yet, multiple studies estimate that the failure rate for target integration can be as high as 70%-90%. The due-diligence process presents a key opportunity to gather detailed business and legal information that can be leveraged to produce a better target integration process resulting in less breakage and also that better identifies transactions that should not be done. In this roundtable conversation, Maureen S. Dorney , Managing Partner, Paradigm Counsel LLP; Douglas Solomon , SVP, General Counsel and Secretary of NetSuite, Inc.; and Joseph Fung , VP HCM Products, NetSuite, Inc., discuss ways to conduct a new level of diligence and how this leads to a more effective integration process. Editor-in-Chief Adam Schlagman serves as the Moderator.

Acquisitions are an important element of many companies' business strategies. How early in the process do you advise that the legal department and outside legal advisers be brought into the process?

Doug Solomon: We believe both the internal and outside legal team should be brought in relatively early. Our internal legal team works closely with corporate development, product, executive management and other departments on acquisitions, and we have a cross-functional team that meets regularly to discuss past deals, deals in process and deals we are currently prospecting so we are aware of deals early, have a good view of the larger context, and can provide advice on structure or direction early on.

We treat our outside counsel as almost an organic extension of our internal team. The specialty groups work on numerous deals for NetSuite and also regularly handle business matters for us in the same areas. This is critical for us because we want attorneys working on the deal who understand our business model, our focus and our sensitivities relative to each area of concern. Outside counsel are invited to attend the diligence kick-off meetings with the target. We believe that the time spent investing in and integrating our outside attorneys into our diligence process is a valuable investment for us.

Joseph Fung: I agree with Doug. It's best to have both in-house and outside counsel involved, at least in an advisory capacity, as early as possible in the selection and evaluation process. The combined legal team is there not only to ensure deal completion, but to also identify and mitigate risks ' the sooner they are involved, the sooner both sides gain a complete picture of what will be involved in the integration. Furthermore, the legal departments will carry a significant portion of the deal responsibility for closing and integration efforts. Thus, in my experience the time spent by NetSuite counsel getting to know the target's integration team pays dividends in improved communications and understanding post-closing.

Maureen Dorney: Ideally, outside counsel are brought in as soon as possible, in some cases before the term sheet is signed. This allows the legal team to begin to identify any critical items and develop a remediation plan for those items that must be remediated prior to closing. Diligence and successful integration in this world of interconnected cloud and mobile services is more complicated then ever before. A target, for instance, could be running crucial business functions on the servers of third-party vendors. At the same time, privacy and security compliance strategies are increasingly crucial to a company's operations. As outside counsel working on NetSuite's acquisitions, we understand what issues might cause concern to NetSuite and what needs to be complied with to meet NetSuite privacy, security and vendor standards because we work on these matters on a routine basis. When Paradigm Counsel attends the diligence kick-off meeting, we not only learn in more detail how the target operates its business, we also can flag issues for review and possible remediation before the detailed document review gets underway. Because of this process, Paradigm Counsel is able to do a much more detailed charting of the agreements reviewed in diligence and not only flag the typical issues related to indemnities, IP ownership, assignment clauses and limitation of liabilities. We are able to chart and flag a higher level of legal and business issues on vendor contracts, partner relationship, privacy issues, revenue recognition and security compliance items to be followed up on for many aspects of post-closing integration.

What specialized legal and business expertise does it take to successfully manage the acquisition process and achieve successful integrations?

Solomon: We believe acquisitions require a full team effort. A lot of NetSuite's diligence efforts are targeted at helping us understand how to structure the deal and how to integrate the business including, for example, which business units fully integrate quickly and which ones to integrate more loosely or operate separately. To do this efficiently, each of the NetSuite's business functions should be represented in the complete diligence process. I learned early on that, although the legal department needs to look at a broad range of legal and business issues for any acquisition, it is best if the legal department is not doing the sole thinking for each business group. The group that will manage that aspect of the acquired or integrated business should be involved from early on. This means, for example, product, finance, legal, HR, sales, professional services, security and facilities all have an important role in diligence and integration. For our external counsel, in addition to regular deal, corporate and transactional support, we use people with expertise in specialty areas such as tech transactions and intellectual property, human resources (often local to the location of the target), benefits export and sometimes patent law. We know that traditionally many companies like to use a primary firm to cover almost all outside counsel needs. We do quite the opposite. We do not put value on ensuring that our outside counsel are all from the same firm on a particular deal. We want outside attorneys on our deals that know our business and our approach.

Fung: Specific to corporate legal experience, expertise in IP, tax and vendor contract management are among the most useful. IP experience will ensure that the acquiring firm has a strong understanding of the target firm's assets and risk (improving the acquirer's negotiating position), and tax experience will facilitate any pre-acquisition or post-acquisition restructuring required to optimize the transaction. Finally, vendor contract management is the dark-horse skill, as significant time may be spent in the integration phase vetting and consolidating vendors and suppliers of the acquired company. As Maureen mentioned earlier, third-party cloud vendors add security and privacy wrinkles that are best identified as early as possible.

Dorney: Outside counsel need to understand more than traditional IP and commercial issues. Diligence must be performed by attorneys who have expertise in export law, open source software, and privacy and security issues, but who also understand the buyer's policies and sensitivities in all of these areas. The ongoing participation that my firm has with NetSuite's full business and legal team on other non-acquisition matters, [combined with] the diligence and integration process throughout, is invaluable in determining what issues are critical, which ones are less important and how to develop an effective remediation and integration plan.

How do acquired companies and their personnel benefit from the approach to acquisition execution that you have developed?

Solomon: Hopefully, we have identified potential business, product integration and people integration issues early in the process so that we develop and execute against a plan that is more likely to be successful for the deal integration and operation of the business as a whole. We believe this is optimal and should remove some of the unnecessary tension in how the business operates and also some of the stress that acquired personnel often feel. The more thought and learning we can do prior to closing and integrating, the better for everyone.

Fung: By leveraging outside counsel, the acquired company benefits from having focused attention from the acquiring firm. Immediately post-acquisition, driving a successful integration is the single most important thing for an acquired company ' having a supporting team that isn't distracted by other priorities is incredibly valuable. On the flip side, by having a long-term relationship with outside counsel, the acquired company benefits from working with people who are intimately familiar with the processes and personalities of the acquirer. This eliminates time-intensive back-and-forth that often occurs with outside counsel. From the acquirer's perspective, this approach acts like an in-house team that can be activated and deployed just for them.

Dorney: At our first meeting, I often tell the management at a target company that I am not asking so many detailed questions to try and find a way to stop the deal. I am trying through the diligence process to help NetSuite identify and remediate any issues to pave the way for a successful integration with no major surprises. I agree with Joseph that this reduces later intensive back and forth discussions and helps to develop an integration process that lets the team from the target operate effectively in the new organization post-closing.

Many deals successfully close only to have the integration fail. Tell us how your process helps to mitigate this risk.

Solomon: As indicated above, we very deliberately focus on integration and how the business will operate from day one during the deal and diligence process. Often, people talk about or think about diligence as a process where the company decides whether there are any issues that are so problematic that they should cease moving forward with the deal. Of course we have to look for those types of issues or concerns, but our primary focus on diligence is learning about the business, the products, and most importantly the people and using that knowledge to help develop an optimal deal structure and integration plan. I have been quoted internally as saying that “diligence is never over until the deal is closed,” but I think perhaps an even more important motto is that “planning for integration cannot start too soon.”

Fung: Our process is particularly good at mitigating two specific integration risks: distraction and process familiarity. Typically, an acquirer needs to decide between these two risks ' using an internal team resolves process familiarity, but is vulnerable to conflicting priorities; external teams are free from distraction but lack the organizational knowledge to successfully navigate processes. By spinning up a team specifically tasked with managing a deal, one we've used on multiple deals over the period of years, we ensure that every deal benefits from the right level of post-close attention from a team that's intimately familiar with NetSuite.

Dorney: NetSuite's detailed and diligence process, with the holistic involvement of in-house counsel, outside counsel and the full participation of the business units, as described by Doug Solomon, enables the teams to be constantly developing and adjusting plans for the integration and remediation of issues from the start of diligence through the process of integration. Detailed information gathered by both the business team and the legal team is consolidated into a single cross-functional working list of objectives to be tracked and updated on an on-going basis. As Joseph mentions, that helps ensure that the management of the target can get up and running in the new organization with a minimum of friction. It also allows the legal teams to keep up to date with the requirements of the business for legal to more efficiently help with integration tasks.

No one likes to kill a deal, but sometimes the attorneys discover problematic issues that require remediation. How can an organized and detailed diligence process identify these issues to enable the lawyers and businesspersons to develop a plan to save the deal?

Solomon: We have a pretty thoughtful and careful diligence process so it would be rare that we would not identify something requiring some remediation. If we can identify problematic items timely then we have the time and ability to analyze them and often working with the target, figure out the best remediation path. We have been very successful in helping some of our targets remediate issues even before we sign and often before we close. Often, it may be easier for the target to remedy the issues with our help and guidance than it would be for us to fix them later. And of course, sometimes the problem is large enough or serious enough that we will not move forward with the transaction unless it is remedied first.

Fung: When an issue kills a deal, it's often less about the particular issue and more that it's discovered late in the process. By developing a clearly defined process and sharing it early with a target company, we can quickly uncover potential “gotchas” early on and, like Doug mentioned, resolve them before the deal closes. A key part of facilitating this process is involving legal counsel as early in the process as possible ' by building rapport with the target company early in the process, we establish cleaner channels to communicate the intent behind various lines of inquiry. This improved communication and detailed process helps us uncover (and resolve) issues that would otherwise be deal-killing surprises. Of course, a key element to this strategy is to be constantly refining the process. Each acquisition will bring new lessons, and by folding these lessons into the system, we can ensure that our diligence teams continue to deliver exceptional results.

Dorney: Not every deal can get done, but the more quickly one can identify any “deal-killer” issues, the better the chance of coming up with a good plan to remediate the issues. The more serious the issue, the more likely that it would need to be fixed prior to closing. Sometimes, an issue may even be identified prior to the signing of a term sheet and the target can be given some extra time to fix the problem by changing some internal practices, signing new agreements to clear up any IP questions, or going in a different direction with some aspect of its technology.

Explain how remediation plans are executed prior to closing and if necessary in a post-closing integration plan.

Solomon: Each deal is unique. Facts are different, business leverage and relationships differ, and of course personalities are always different. We believe remediation plans must be structured thoughtfully and in a manner that fits the issues that need to be remediated and the rest of the context from business relationships to personalities. Issues may be remediated before the deal is signed, after signature and before closing and after closing. Which to do will depend on the various facts. When we are faced with significant issues, we often will consider different approaches to solving them and we will recommend an approach based upon our analysis of what is likely to be most successful with the least negative disruption or negative consequences.

Dorney: I agree with Doug that the approaches can vary widely depending on the issues presented and the needs of the business. In some cases, the actual structure of the transaction will be used to mitigate some of the issues. One common example is an asset sale as opposed to a merger. Most people are familiar with that. There are, however, myriad issues that can surface, especially for an SaaS platform entity. What is important is having the remediation issues identified prior to closing. You try to remediate what you can prior to closing, but, in some cases, NetSuite, not the target, can accomplish the remediation better and more quickly post-closing as part of the integration process. The attention to detail during diligence allows the team to decide upon and execute the plan.

How can an integrated diligence process lead to a more successful acquisition?

Solomon: We take a holistic approach to diligence. We do not approach diligence thinking solely about whether we should complete the transaction. We are not just thinking about whether we do it or not. We also are thinking about how we do it, about integration and planning the integration and later operation of the acquired business. Our goal is to learn as much as we can about the target that will inform us and help us plan a successful integration and a successful path forward. For these reasons, our preference is to have business teams and internal and external counsel involved that have a very good understanding of how we operate our business and will be responsible for (or are working closely with those that are responsible for) a successful integration and operation of the acquired business. We believe this helps us be more successful because we have the right folks involved early on and therefore they can start planning the integration and future operation of the business. And we ask them, including outside counsel, to be thinking about integration planning including the tracking of issues, from day one of diligence.

Fung: Acquisition successes are measured on a number of metrics. However, a few frequent ones are employee retention and effectively selling acquired products into the acquired company's customer base; an integrated diligence process, with the right integration team, assists with each of these. On the first front, employees at the acquired company are always apprehensive about what the acquisition will mean to them ' needless friction will only exacerbate this worry. By delivering a smooth diligence and integration process, we develop a better understanding of key employees and influencers and let them focus on their work rather than the integration. Second, by developing a better understanding of the target company's processes and by pairing them with appropriate colleagues on our side, we can establish a strong go-to-market plan before the deal closes. Delivering a smooth business integration lets us execute on these go-to-market plans immediately post-acquisition, offering a better experience to customers and building confidence in the deal on both the buy and sell side. When you can deliver strong employee retention and strong go-to-market results, it's much easier to realize successful acquisitions.

Dorney: The diligence issues flagged in the detailed charts get allocated either to pre-closing or integration process items. At Paradigm Counsel, we are asked to identify the suggested post-closing integration items and the best way to accomplish them. Often, we stay as part of the team post-integration to work on and adjust the integration and remediation plan on an ongoing basis. This helps ensure that key learnings from the diligence process are not lost and can benefit the integration teams. The rapport that we developed with the target deal team helps us work as an add-on to in-house team to help them on the integration process.

Editor's Note: Buy-side acquisitions can be a critical component of a company's growth strategy. Yet, multiple studies estimate that the failure rate for target integration can be as high as 70%-90%. The due-diligence process presents a key opportunity to gather detailed business and legal information that can be leveraged to produce a better target integration process resulting in less breakage and also that better identifies transactions that should not be done. In this roundtable conversation, Maureen S. Dorney , Managing Partner, Paradigm Counsel LLP; Douglas Solomon , SVP, General Counsel and Secretary of NetSuite, Inc.; and Joseph Fung , VP HCM Products, NetSuite, Inc., discuss ways to conduct a new level of diligence and how this leads to a more effective integration process. Editor-in-Chief Adam Schlagman serves as the Moderator.

Acquisitions are an important element of many companies' business strategies. How early in the process do you advise that the legal department and outside legal advisers be brought into the process?

Doug Solomon: We believe both the internal and outside legal team should be brought in relatively early. Our internal legal team works closely with corporate development, product, executive management and other departments on acquisitions, and we have a cross-functional team that meets regularly to discuss past deals, deals in process and deals we are currently prospecting so we are aware of deals early, have a good view of the larger context, and can provide advice on structure or direction early on.

We treat our outside counsel as almost an organic extension of our internal team. The specialty groups work on numerous deals for NetSuite and also regularly handle business matters for us in the same areas. This is critical for us because we want attorneys working on the deal who understand our business model, our focus and our sensitivities relative to each area of concern. Outside counsel are invited to attend the diligence kick-off meetings with the target. We believe that the time spent investing in and integrating our outside attorneys into our diligence process is a valuable investment for us.

Joseph Fung: I agree with Doug. It's best to have both in-house and outside counsel involved, at least in an advisory capacity, as early as possible in the selection and evaluation process. The combined legal team is there not only to ensure deal completion, but to also identify and mitigate risks ' the sooner they are involved, the sooner both sides gain a complete picture of what will be involved in the integration. Furthermore, the legal departments will carry a significant portion of the deal responsibility for closing and integration efforts. Thus, in my experience the time spent by NetSuite counsel getting to know the target's integration team pays dividends in improved communications and understanding post-closing.

Maureen Dorney: Ideally, outside counsel are brought in as soon as possible, in some cases before the term sheet is signed. This allows the legal team to begin to identify any critical items and develop a remediation plan for those items that must be remediated prior to closing. Diligence and successful integration in this world of interconnected cloud and mobile services is more complicated then ever before. A target, for instance, could be running crucial business functions on the servers of third-party vendors. At the same time, privacy and security compliance strategies are increasingly crucial to a company's operations. As outside counsel working on NetSuite's acquisitions, we understand what issues might cause concern to NetSuite and what needs to be complied with to meet NetSuite privacy, security and vendor standards because we work on these matters on a routine basis. When Paradigm Counsel attends the diligence kick-off meeting, we not only learn in more detail how the target operates its business, we also can flag issues for review and possible remediation before the detailed document review gets underway. Because of this process, Paradigm Counsel is able to do a much more detailed charting of the agreements reviewed in diligence and not only flag the typical issues related to indemnities, IP ownership, assignment clauses and limitation of liabilities. We are able to chart and flag a higher level of legal and business issues on vendor contracts, partner relationship, privacy issues, revenue recognition and security compliance items to be followed up on for many aspects of post-closing integration.

What specialized legal and business expertise does it take to successfully manage the acquisition process and achieve successful integrations?

Solomon: We believe acquisitions require a full team effort. A lot of NetSuite's diligence efforts are targeted at helping us understand how to structure the deal and how to integrate the business including, for example, which business units fully integrate quickly and which ones to integrate more loosely or operate separately. To do this efficiently, each of the NetSuite's business functions should be represented in the complete diligence process. I learned early on that, although the legal department needs to look at a broad range of legal and business issues for any acquisition, it is best if the legal department is not doing the sole thinking for each business group. The group that will manage that aspect of the acquired or integrated business should be involved from early on. This means, for example, product, finance, legal, HR, sales, professional services, security and facilities all have an important role in diligence and integration. For our external counsel, in addition to regular deal, corporate and transactional support, we use people with expertise in specialty areas such as tech transactions and intellectual property, human resources (often local to the location of the target), benefits export and sometimes patent law. We know that traditionally many companies like to use a primary firm to cover almost all outside counsel needs. We do quite the opposite. We do not put value on ensuring that our outside counsel are all from the same firm on a particular deal. We want outside attorneys on our deals that know our business and our approach.

Fung: Specific to corporate legal experience, expertise in IP, tax and vendor contract management are among the most useful. IP experience will ensure that the acquiring firm has a strong understanding of the target firm's assets and risk (improving the acquirer's negotiating position), and tax experience will facilitate any pre-acquisition or post-acquisition restructuring required to optimize the transaction. Finally, vendor contract management is the dark-horse skill, as significant time may be spent in the integration phase vetting and consolidating vendors and suppliers of the acquired company. As Maureen mentioned earlier, third-party cloud vendors add security and privacy wrinkles that are best identified as early as possible.

Dorney: Outside counsel need to understand more than traditional IP and commercial issues. Diligence must be performed by attorneys who have expertise in export law, open source software, and privacy and security issues, but who also understand the buyer's policies and sensitivities in all of these areas. The ongoing participation that my firm has with NetSuite's full business and legal team on other non-acquisition matters, [combined with] the diligence and integration process throughout, is invaluable in determining what issues are critical, which ones are less important and how to develop an effective remediation and integration plan.

How do acquired companies and their personnel benefit from the approach to acquisition execution that you have developed?

Solomon: Hopefully, we have identified potential business, product integration and people integration issues early in the process so that we develop and execute against a plan that is more likely to be successful for the deal integration and operation of the business as a whole. We believe this is optimal and should remove some of the unnecessary tension in how the business operates and also some of the stress that acquired personnel often feel. The more thought and learning we can do prior to closing and integrating, the better for everyone.

Fung: By leveraging outside counsel, the acquired company benefits from having focused attention from the acquiring firm. Immediately post-acquisition, driving a successful integration is the single most important thing for an acquired company ' having a supporting team that isn't distracted by other priorities is incredibly valuable. On the flip side, by having a long-term relationship with outside counsel, the acquired company benefits from working with people who are intimately familiar with the processes and personalities of the acquirer. This eliminates time-intensive back-and-forth that often occurs with outside counsel. From the acquirer's perspective, this approach acts like an in-house team that can be activated and deployed just for them.

Dorney: At our first meeting, I often tell the management at a target company that I am not asking so many detailed questions to try and find a way to stop the deal. I am trying through the diligence process to help NetSuite identify and remediate any issues to pave the way for a successful integration with no major surprises. I agree with Joseph that this reduces later intensive back and forth discussions and helps to develop an integration process that lets the team from the target operate effectively in the new organization post-closing.

Many deals successfully close only to have the integration fail. Tell us how your process helps to mitigate this risk.

Solomon: As indicated above, we very deliberately focus on integration and how the business will operate from day one during the deal and diligence process. Often, people talk about or think about diligence as a process where the company decides whether there are any issues that are so problematic that they should cease moving forward with the deal. Of course we have to look for those types of issues or concerns, but our primary focus on diligence is learning about the business, the products, and most importantly the people and using that knowledge to help develop an optimal deal structure and integration plan. I have been quoted internally as saying that “diligence is never over until the deal is closed,” but I think perhaps an even more important motto is that “planning for integration cannot start too soon.”

Fung: Our process is particularly good at mitigating two specific integration risks: distraction and process familiarity. Typically, an acquirer needs to decide between these two risks ' using an internal team resolves process familiarity, but is vulnerable to conflicting priorities; external teams are free from distraction but lack the organizational knowledge to successfully navigate processes. By spinning up a team specifically tasked with managing a deal, one we've used on multiple deals over the period of years, we ensure that every deal benefits from the right level of post-close attention from a team that's intimately familiar with NetSuite.

Dorney: NetSuite's detailed and diligence process, with the holistic involvement of in-house counsel, outside counsel and the full participation of the business units, as described by Doug Solomon, enables the teams to be constantly developing and adjusting plans for the integration and remediation of issues from the start of diligence through the process of integration. Detailed information gathered by both the business team and the legal team is consolidated into a single cross-functional working list of objectives to be tracked and updated on an on-going basis. As Joseph mentions, that helps ensure that the management of the target can get up and running in the new organization with a minimum of friction. It also allows the legal teams to keep up to date with the requirements of the business for legal to more efficiently help with integration tasks.

No one likes to kill a deal, but sometimes the attorneys discover problematic issues that require remediation. How can an organized and detailed diligence process identify these issues to enable the lawyers and businesspersons to develop a plan to save the deal?

Solomon: We have a pretty thoughtful and careful diligence process so it would be rare that we would not identify something requiring some remediation. If we can identify problematic items timely then we have the time and ability to analyze them and often working with the target, figure out the best remediation path. We have been very successful in helping some of our targets remediate issues even before we sign and often before we close. Often, it may be easier for the target to remedy the issues with our help and guidance than it would be for us to fix them later. And of course, sometimes the problem is large enough or serious enough that we will not move forward with the transaction unless it is remedied first.

Fung: When an issue kills a deal, it's often less about the particular issue and more that it's discovered late in the process. By developing a clearly defined process and sharing it early with a target company, we can quickly uncover potential “gotchas” early on and, like Doug mentioned, resolve them before the deal closes. A key part of facilitating this process is involving legal counsel as early in the process as possible ' by building rapport with the target company early in the process, we establish cleaner channels to communicate the intent behind various lines of inquiry. This improved communication and detailed process helps us uncover (and resolve) issues that would otherwise be deal-killing surprises. Of course, a key element to this strategy is to be constantly refining the process. Each acquisition will bring new lessons, and by folding these lessons into the system, we can ensure that our diligence teams continue to deliver exceptional results.

Dorney: Not every deal can get done, but the more quickly one can identify any “deal-killer” issues, the better the chance of coming up with a good plan to remediate the issues. The more serious the issue, the more likely that it would need to be fixed prior to closing. Sometimes, an issue may even be identified prior to the signing of a term sheet and the target can be given some extra time to fix the problem by changing some internal practices, signing new agreements to clear up any IP questions, or going in a different direction with some aspect of its technology.

Explain how remediation plans are executed prior to closing and if necessary in a post-closing integration plan.

Solomon: Each deal is unique. Facts are different, business leverage and relationships differ, and of course personalities are always different. We believe remediation plans must be structured thoughtfully and in a manner that fits the issues that need to be remediated and the rest of the context from business relationships to personalities. Issues may be remediated before the deal is signed, after signature and before closing and after closing. Which to do will depend on the various facts. When we are faced with significant issues, we often will consider different approaches to solving them and we will recommend an approach based upon our analysis of what is likely to be most successful with the least negative disruption or negative consequences.

Dorney: I agree with Doug that the approaches can vary widely depending on the issues presented and the needs of the business. In some cases, the actual structure of the transaction will be used to mitigate some of the issues. One common example is an asset sale as opposed to a merger. Most people are familiar with that. There are, however, myriad issues that can surface, especially for an SaaS platform entity. What is important is having the remediation issues identified prior to closing. You try to remediate what you can prior to closing, but, in some cases, NetSuite, not the target, can accomplish the remediation better and more quickly post-closing as part of the integration process. The attention to detail during diligence allows the team to decide upon and execute the plan.

How can an integrated diligence process lead to a more successful acquisition?

Solomon: We take a holistic approach to diligence. We do not approach diligence thinking solely about whether we should complete the transaction. We are not just thinking about whether we do it or not. We also are thinking about how we do it, about integration and planning the integration and later operation of the acquired business. Our goal is to learn as much as we can about the target that will inform us and help us plan a successful integration and a successful path forward. For these reasons, our preference is to have business teams and internal and external counsel involved that have a very good understanding of how we operate our business and will be responsible for (or are working closely with those that are responsible for) a successful integration and operation of the acquired business. We believe this helps us be more successful because we have the right folks involved early on and therefore they can start planning the integration and future operation of the business. And we ask them, including outside counsel, to be thinking about integration planning including the tracking of issues, from day one of diligence.

Fung: Acquisition successes are measured on a number of metrics. However, a few frequent ones are employee retention and effectively selling acquired products into the acquired company's customer base; an integrated diligence process, with the right integration team, assists with each of these. On the first front, employees at the acquired company are always apprehensive about what the acquisition will mean to them ' needless friction will only exacerbate this worry. By delivering a smooth diligence and integration process, we develop a better understanding of key employees and influencers and let them focus on their work rather than the integration. Second, by developing a better understanding of the target company's processes and by pairing them with appropriate colleagues on our side, we can establish a strong go-to-market plan before the deal closes. Delivering a smooth business integration lets us execute on these go-to-market plans immediately post-acquisition, offering a better experience to customers and building confidence in the deal on both the buy and sell side. When you can deliver strong employee retention and strong go-to-market results, it's much easier to realize successful acquisitions.

Dorney: The diligence issues flagged in the detailed charts get allocated either to pre-closing or integration process items. At Paradigm Counsel, we are asked to identify the suggested post-closing integration items and the best way to accomplish them. Often, we stay as part of the team post-integration to work on and adjust the integration and remediation plan on an ongoing basis. This helps ensure that key learnings from the diligence process are not lost and can benefit the integration teams. The rapport that we developed with the target deal team helps us work as an add-on to in-house team to help them on the integration process.