A legal due diligence review is more than the legal equivalent of hitting the tires of an automobile. It is a thorough review that involves lawyers and CPAs who examine documents and data. It involves the examination of a wide range of areas of focus, including a legal review of material contracts litigious liabilities, intellectual property, regulatory compliance, corporate records, financial reviews of accounting policies and financial statements and tax returns. It also involves a thorough review of the organization’s management structure, and the Clicking Here products, services marketing, sales, facilities and equipment.
Legal due diligence can be a lengthy process, based on the nature of the business and the amount of money involved in the transaction. This is particularly the case for large firms that have virtual stacks of documents that lawyers need to sort through. A lot of legal departments are making use of technology to streamline the process. For instance, a document review platform is integrated with AI tools.
Before beginning the legal due diligence process, you must establish the framework and purpose for the investigation. It is helpful to make a checklist of key areas to investigate and have the legal team work out the best strategy for the investigation with the business owners. The order in which you prioritize areas that require specialist input is important. For example, a legal due diligence review of an IP holding company might include questions from an intellectual property specialist to determine whether the company has any significant patents or other intellectual property rights, and whether there are any infringement lawsuits in the process or being considered.