IPO Readiness Practical Tips for General Counsel_Blog Series

Outside Counsel – Part II

In any public offering, the quality of the leadership team is a key factor. It is vital to ensure that the board of directors and management have the right blend of experience and skills. This will aid in the establishment of an optimal corporate governance structure and help to ensure that the board committees are operating effectively. As stated in previous articles, a successful IPO does require careful planning.

Two main tactics will come into play. First, a company must prepare its management team and business units to begin acting like and functioning as a public company, both internally and externally. Second, a company must identify the key players in its going-public team, beginning with the experts it will hire to the staff members who will help prepare the registration and other sales documents. You will need to prioritize your requirements for outside counsel and the best way to accomplish this is to create a criterion that will serve as a guide. Below is an example of evaluation criteria for choosing outside counsel.

General IPO Knowledge

  • Corporate
  • Going public
  • Equity financing
  • Private financing
    • Human resources
    • Capitalization table and share transfers debt financing
    • Internal and external investigations
  • Privacy/data security
  • Litigation
  • Real estate
  • Licensing
  • Mergers and acquisition

Legal Skills

  • Drafting
    • Negotiation
  • Creative problem solving

Case Management and Administration

  • Accessibility
  • Timeliness
  • Cost consciousness
  • Cost control
  • Working within a budget
  • Efficient staffing
  • Bench strength
    • Organization
    • Turnover
    • Good library of forms from which to work with

Satisfaction

  • Usefulness of advice
  • Understanding of the industry
    • Knowledge of benchmarks
    • Keeping you informed
    • Anticipation of wants/needs
  • Understanding of culture and style
  • Stability, size, and stature of firm

It is advisable to keep all of these factors in mind on your IPO journey. Evaluate your outside counsel and analyze all of the details. Assessing people, things, and details will help you to avoid mistakes. Organization and planning will assist you in laying solid groundwork on your IPO journey, increasing your chances of a smooth transition.

I would like to continue this journey with you. We have come a long way so far; we have explored whether an initial public offering is right for you and how to build the right team to help you along your way. Now we have a framework for evaluating an outside counsel, but how do you determine what is right for you? In my next article I will disclose how to retain the outside counsel best suited to assist your company with a successful IPO.