Tiếng Việt 
The role of lawyers in M&A transactions
Mergers and Acquisitions (M&A) is a crucial strategy for businesses to expand, increase market share, and optimize resources. However, M&A transactions also carry complex legal, financial, and commercial risks. This is why the role of lawyers in M&A transactions is extremely important. An experienced lawyer will help businesses manage risks, ensure compliance with legal regulations, and maximize benefits in an M&A deal.
1. Sources of lawyers involved in M&A transactions
In M&A transactions, businesses can choose to use in-house counsel or hire lawyers from external law firms. Many businesses even combine both resources to ensure comprehensive control over legal risks and optimize the transaction.
In-house lawyers work directly within a company, possessing a thorough understanding of its internal affairs, business strategy, and the objectives of an M&A transaction. They have an advantage in assessing factors related to the company's operations and providing strategic advice. However, this team is typically small and unable to handle the entire complex legal process of a large M&A deal.
Meanwhile, lawyers from outside law firms have the advantage of in-depth experience in M&A, covering many legal aspects such as taxation, intellectual property rights, compliance, and dispute resolution. They also have ample resources to handle the large workload within the limited timeframe of a transaction. However, because they do not work directly within the company, they may need more time to fully understand the internal situation and specific objectives of the company involved in the transaction.
In practice, large-scale M&A transactions often combine both groups of lawyers. In-house lawyers play a strategic role and connect information between the company and external legal teams, while lawyers from law firms handle legal due diligence, contract drafting, term negotiation, and compliance with legal regulations. This flexible combination of the two legal groups helps businesses better control legal risks, optimize transaction processes, and enhance the likelihood of M&A success.
2. The role of lawyers in each stage of M&A
2.1. Preparation Phase: Strategy Development and Risk Assessment
Strategic legal consulting: First, the lawyer will identify the client's business objectives and determine the legal issues affecting the M&A transaction, such as whether it is a friendly transaction or not. The lawyer will analyze the appropriate M&A model (asset acquisition, share acquisition, merger, consolidation, etc.). In addition, the M&A lawyer will provide advice and useful solutions to prevent unwanted risks during the M&A negotiation process. Furthermore, the lawyer will support the business in implementing effective restructuring, attracting major investors, and determining the best development direction for the business after the M&A to ensure success.
Legal Risk Assessment: Forecasting risks is crucial to the success of M&A activities. Not only before and during the M&A process, but even after completion, post-M&A activities require careful consideration and forecasting. This is considered the most important task for lawyers involved in M&A. Some risk issues that lawyers may consider include predicting non-depreciable assets, bad debts, or cash flows from the sale of fixed assets rather than goods. In addition, human resource risks are another aspect of M&A that lawyers will forecast for the business. This is because, after many successful M&A deals, key personnel are no longer enthusiastic about the company. Therefore, for sustainable business development, thorough consultation on maintaining a strong operational structure in the post-M&A period is essential. Lawyers will examine legal issues related to the target business such as tax obligations, labor disputes, contracts with partners, intellectual property rights, financial obligations, etc.
Transaction structure consulting: Lawyers help businesses determine the most legally and taxably advantageous transaction structure.
2.2. The Legal Investigation Phase
Legal document review: Lawyers review business licenses, employment contracts, commercial contracts, tax obligations, intellectual property, etc.
Assessing the legal status of the business: Identifying issues that could affect the value of the transaction and proposing solutions to address them.
Prepare due diligence reports: Lawyers compile information and provide assessments of the legal risks of M&A transactions.
2.3. Contract Negotiation Phase
Contract drafting and review: Lawyers assist in drafting and reviewing the terms of share purchase agreements and merger agreements to ensure the protection of the company's interests.
Contract negotiation support: Lawyers represent businesses in negotiating key terms such as transaction value, payment mechanisms, and post-M&A control rights.
Proposed solutions to protect interests: Ensure investor protection clauses, seller commitments, and measures for handling breaches of contract.
2.4. The legal procedure implementation phase
Completing the share/asset transfer procedure: Lawyers assist in completing the legal documents to register the change of ownership at the competent authority.
Ensuring compliance with legal regulations: Guiding businesses in fulfilling their tax reporting and declaration obligations after M&A transactions.
Support in handling post-transaction issues: Dispute resolution, adjustment of employment contracts, and commercial contracts if changes occur after the M&A.
- Why do businesses need lawyers in M&A transactions?
Risk mitigation: Limit the occurrence of legal issues such as contract disputes, violations of competition law, and tax violations.
Maximizing benefits: Ensuring the business obtains the most favorable terms during a merger or acquisition.
Expediting transactions: Lawyers help to quickly handle legal procedures, avoiding delays in transactions.
Ensure compliance with legal regulations: Avoid violations of investment, competition, labor, and tax laws that could negatively impact the business.
M&A transactions are complex processes that require close support from legal experts to ensure success and minimize risks. An experienced lawyer not only assists businesses with legal procedures but also plays a crucial role in shaping strategy, controlling risks, and optimizing benefits in an M&A deal. If your business is considering an M&A transaction, contact a lawyer immediately for expert advice and to ensure the transaction proceeds smoothly and legally.
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Best regards!
(Author: Pham Thu Hang; Translator: Nguyen Phuong Anh; Date: April 1, 2025)
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