M&A Issues: The Integration Plan

Comments (Archived):

1. Good points Fred.When I did M & A for awhile, earn outs were the big item as they were the vehicle to keep the acquired team in place post acquisition. It was not often smooth because without a resource plan and shifting priorities of the acquirer, things frequently soured and infrequently went smoothly.It was sometimes like having a comp plan for a sales team without marketing resources to build the market and drive the traffic into the funnel.

   1. if you leave the company alone, then earn outs are awesomeif you don’t, then some sort of stay package is absolutely required

      1. It’s true that earnouts only work if the original organization is maintained, more-or-less intact for the duration of the earnout period (or if they are tied to a specific product, like a drug candidate, that the buyer is motivated to develop). But an earnout isn’t always awesome where the acquired organization is kept intact. The problem is that the earnout can skew the incentives of the people managing the acquired organization. Whoever is managing the acquired organization will have the timeframe and metrics of the earnout in mind (at least the back of their minds, but often front and center). The temptation to manage to the earnout can be huge. If the incentives aren’t perfectly adapted to the circumstances, this can produce very destructive distortions, even if it doesn’t lead to outright fraud. Unfortunately, the one thing you can be sure of in designing an earnout is that circumstances will diverge from your projections. So there’s a good chance the incentives in the earnout will not work as you intended.The problem arises whether the founders or acquirer personnel are running the acquired organization during the earnout. The only difference is the direction of the incentives.Experienced sellers, buyers and M&A lawyers are aware of these problems, so they tend to build all sorts of protections into the contract (e.g. limitations on what can be done with the business and the acquirer’s rights to terminate the founders’ employment). Those protections make sense for someone focused on the deal. Unfortunately, they can put serious obstacles in the way of a successful integration.

2. Further thoughts on integration, including some McKinsey findings http://bit.ly/e8BVG4

   1. great point on the excessive focus on valuation and not on the tech itself

3. in Egypt now post Mubarak, could there be a smooth M&A activity to get the country onto a stable platform to build upon for this century.Could the simple basic exercises you mention for corporate M&A be applied to a state that has the essential pieces but has bad management team in place be replaced by a new team.. Just a thought…My experience with M&A has been with established companies being other established companies but in the three cases I was involved in the bankers and lawyers were the ones who put forth the deal and despite several strategic engagements of stating how the merger would be bad on various counts, it went through.Several years later what I had stated came true, but the bankers made out big in both the M&A and the disinvestment plan as well.Sprint Nextel was one of them.I personally believe that the company being acquired has to look beyond the monies they are going to accrue. They have to ask fundamentally how the merger is going to benefit the product/service and if they believe the acquisition will have a positive effect for the consumers ( assuming it is consumer facing).

   1. Egypt engaged in some M&A once — a (brief) merger with Syria. It was called The United Arab Republic.

      1. That was a perfect example of “You should be very careful about with whom you choose to get into bed”!

4. What are the most key terms to hammer through? are there terms that help protect one’s employees as well as oneself?

   1. Ultimately, there are no contractual terms that can “protect” someone other than the transfer of money from owner to owned. Otherwise, it’s not truly an acquisition.So you can have employment contracts for key people that guarantee $x to those people. But once the sale is complete, the owner can do whatever it wants with the asset it owns.Including nothing (see Google’s acquisition of Dodgeball).

      1. Ugggg- that doesn’t sound like a good plan when it comes with negotiations

      2. Aaron you’re so right.Your needs, by definition, are subordinated to theirs.Other then the price, some guaranteed salaries and an earn-out, they can do whatever they want. It’s not your baby anymore.

5. I love the advice to kill off competing projects before signing the purchase agreement. Great post Fred.

6. Without disagreeing with your post at all, one thing that occurs to me is that the integration plan likely won’t be legally binding on the acquirer. So while they want to keep the acquired team happy, all it takes is a few bad quarters for an integration plan to bite the dust and there is little you can do – they own the asset. :)The other thing to watch carefully are the alignment of incentives in the stay package. If the company’s overall measure of success diverges from the contractual terms of an earnout, that’s a recipe for disaster that I’ve seen more than once.

   1. true

7. Having done a couple of unsuccessful and successful M&A transactions, I think they should just be called acquisitions, not mergers.I can’t speak to the purchase where you let the company continue on a standalone basis.I can say that if you don’t have a tight plan to integrate the acquired company you will burn through TONS of value as the two organizations flail for control. I have paid a ton of tuition to learn this lesson as JLM would say.If you don’t have a plan for the first day, first week, first month, and have it completely wrapped up by the first quarter before you sign the paperwork you are doomed to a world of in-fighting.

8. OK so i’ve spent cumulatively a bunch of years doing post-merger integration work. The one who gets left holding the bag after the transaction! (although I must say it is quite a lucrative consulting gig…a gift that keeps on giving)A caveat is i’m talking about very large, complex organizations. In this case typically each side doesn’t even fully know what they have inside of themselves, let alone each other. Go talk to several dozen people in each organization and without fail there’s a sh*tload of meaningful stuff the leadership does not know about their company, let alone the other. And this is *after* due diligence.The most popular bad ways to “integrate” that I’ve seen frequently are:(1) the Noah’s Ark strategy (set up a leadership org structure where leaders from the legacy orgs are paired to run something. Recipe for them killing each other!)(2) the “one for you, one for me. one for you, one for me” strategy, like dealing cards. This is a fabulous way to promote people who don’t deserve it into even higher positions!A pretty bad but not terrible way is creating the new Org Chart and filling in the boxes. The problem with that is people get fixated on titles and empire-building, and not what the organization is really supposed to do. Org Charts don’t enable analysis of metrics, objectives around revenue growth and infrastructural consolidation — the stuff that’s supposed to drive the value in this integration.The right way? A process model of the business from soup to nuts, defining the “right” future business: what are the differentiators that make it win in the market, how it delivers against them, what metrics do you use, and what skills/infr/tools it needs to do it (you will probably still find gaps).This requires the guts + willingness to go into excruciating operational detail and make real, fact-based decisions. But it is the highest success and least painful way to move toward the best potential future.It is exceedingly rare that a company does this. It is just too tempting to whip out the org chart. And the problem is, once you’ve whipped out the org chart, you can’t go back. Personal ambition is now in the way.Don’t do it now and typically the next opportunity is at Turnaround Time. Same process! But now the focus is job cutting, which sucks. I wish they did it right during the happy time when the resources and positive vibe is there.

   1. I like the Noah’s Ark and card dealing analogies. So true.

      1. Thanks!The thing that gets me about those are — the guys spent so much time sweating “facts” incorporated in the IRR and the timing of various (supposed) cash flows…..and then they get lazy when it comes time to put the resources to work and just throw it against the wall to see if it sticks, like spaghetti in a dorm room.That they could possibly *think* it’s going to work just makes me laugh.That’s a “Hi I analyze stuff but i’ve never actually made anything happen before….and I just started shaving last year” kind of move.This is one area where it helps when you’ve been in the trenches and seen the carnage and possibly even have some blood on your hands that you deeply regret. Then you take these decisions a bit more seriously.People are not pawns and financial commitments need to be delivered against. This means making tough decisions swiftly, based on facts, communicating them clearly, and treating everyone with dignity.Handing out unclear roles or telling them to “work it out themselves” is totally disrespectful and poisons the well. Then they turn to infighting and self-protection instead of the business of the business.You must build a foundation of trust.

   2. Great, thoughtful analysis from your own experiences Tereza.From my own experiences, both from the standpoint of having been involved in an “acquired” but at that time when in a position that, to influence the outcome would have been “above my then paygrade” so-to-speak, and subsequently from the standpoint of having influence, and also from the standpoint of having had responsibility, my inclination would be to to state that whether an M&A will go well or otherwise will depend largely upon whether or not a both sides recognize that the true (asset) value in either business comes from the people that created the being-acquired business rather than just from any tangible or IP assets.Not that IP assets have no value, clearly they have great value and most likely/most often are the specific target for the acquirer but invariably, IP in particular has value stemming from the creative mind(s) of the people that created it: They know it intimately and thus are invariably best equipped to further its use and development. Hence, without recognizing the people value in appropriate ways within the integration plan, the net result most likely will be that the acquired becomes a drag on merged earnings rather than a contributor.

9. The issue of integration has one big issue and a ton of smaller ones.The big issue, as Fred has clearly pointed out, is “stand alone” or “fully integrate”. BTW, I love the word “subsume”, don’t know why but just do. Great word.If you are going to have a stand alone operation, then the first thing is to damn sure know what their business plan and strategic plan is going to be. Have it in writing and make sure it is fully resourced.The budget and strategic plan have to anticipate incentive compensation and all the personnel issues. There may be some corporate functions which can be eliminated even in a stand alone operation.Many acquisitions will provide “merger efficiency” opportunities and these will quickly disappear unless you grab them immediately.To the extent those merger efficiencies require you to get rid of staff, do it literally at the closing. This is one of the most important lessons I have ever learned in business. The potential discontinuity is always worth the pain of having someone around who is going to be let go in the future.Make all the changes as quickly as possible at the point of inflection and do not allow the retained management to get into the decision-making process or you will incur massive negative energy as they fight for retaining their colleagues. It is fraught with peril.

10. One of the most effective things you can do as a CEO is to make a formal welcome of a new acquisition. The staff is dealing with uncertainty and fear of the unknown. Or maybe not?The more face time you can spend with the newly acquired staff immediately after the closing the easier it is going to be to evaporate the uncertainties and to quell fears.I cannot overstate the importance of meeting with senior staff to, in effect, conduct a focus group with them individually — always individually first to keep them from forming a cabal or collective group think and sabotage the deal — and then as a group.One of those people is going to know you, like you, appreciate you and that contagion will work to your benefit in the future.I suggest the appointment of formal “Integration Managers” from the acquired team and the existing company. This creates a center of mass and an individual to whom the acquired folks can go to ask questions, vent or complain.Depending on the size of the companies involved, I suggest a group meeting in which the CEO personally introduces the staffs to their counterparts with introductions which are personal and fun.This will take some work on the part of the CEO but don’t be afraid to have notecards made and make a physical welcome — a handshake or a hug if you have that kind of mojo working . Get out of YOUR comfort zone.I would also use the opportunity of an acquisition and integration to conduct a rigorous company survey to find out what the folks liked, disliked about the former company. Remember they will have almost complete license to share the “dreadfuls” with you because they may perceive their former bosses cannot fire them now.Ask the big questions — what would you do if you were President/CEO. Once I did this and an accountant said to divest ourselves of a particular unit. The numbers were dreadful and she was working on their books. I had a blind spot. I got rid of the unit the next day.Have a luncheon with prescribed seating so that folks have to meet their counterparts and let it run for the balance of the day. Get them all drunk — ooops, bad advice, disregard.Immediately give them some new company doodah — caps, fleece jackets, t-shirts. Something that makes them move visually, physically and intellectually into the new company. Have their damn business cards done the first day. Burn the old ones — OK, a bit over the top, maybe but maybe not.

    1. Great comment.Always, always, always have meetings one-on-one with all of the key people (or as many as possible) before you ever get them in a room together.Show some vulnerability. Ask them what they would do in your position. Ask them what they want.Do it in the context of some kind of (short) vision document. Say it’s a draft and that their input is instrumental.Many of them won’t have many ideas on the strategy itself (or will agree with what you wrote, because it’s slam-dunk obvious stuff), but if you ask them how to make it happen and where are the problem areas, they will tell you.Then when you present it to a group, they’ve already seen it all. Not a whole lot more for them to discuss. As you’re presenting you’re raising the specific fears/concerns/risks they called out to you in the pre-meetings — making eye contact and acknowledging who said what during the preso and pointing out where in the plan they are being addressed (they like to see they’ve had an impact on the end product).Then they feel like you’re talking to each of them individually.It’s not foolproof but as close as it comes and of course there are speed bumps at every step and sometimes you can cut the tension with a knife.i’ve had guys leave the room on the verge of fistfights. i’ve had others who flew across the world to ‘participate’ in a meeting where they didn’t say a word and were instructed to sandbag it after (which they disclosed while drunk, and why getting drunk together is in fact a critical success factor). and of course i’ve had the ole’ “come to my hotel room and i’ll show you what it’ll take for this merger to work”. hmmmm. Classy!Always fun!!! Hey, if it were easy, then everyone could do it.

    2. Totally agree with Tereza’s comments in reply to you JLM.Additionally, I see ….. “The more face time you can spend with the newly acquired staff immediately after the closing the easier it is going to be to evaporate the uncertainties and to quell fears.I cannot overstate the importance of meeting with senior staff to, in effect, conduct a focus group with them individually — always individually first to keep them from forming a cabal or collective group think and sabotage the deal — and then as a group.” …. as being so important that it bears repeating. Implementing much of the rest of JLM’s observations fundamently rely upon doing just this.

    3. translation:if you are the CEO, spend time with people, your team, the people whojoin your company via acquisitions, the people you hire, etc, etc

    4. translation:if you are the CEO, spend time with people, your team, the people whojoin your company via acquisitions, the people you hire, etc, etc

11. Just had coffee with someone who was acquired and he echoed your words exactly. Gotta get the integration part right before you sign anything, big time.

12. One bad experience I had which has imparted an indelible lesson on me is that if you are ultimately get rid of a key manager from the acquired entity, do it sooner rather than later.I once bought a couple of companies and extracted 3-year management continuity contracts. I felt the necessity to do this because I personally did not know enough about these type of businesses and wanted the pacifier effect of keeping the experienced folks around. They were also the sellers and beneficiaries of the money being paid.Really bad, bad decision on one and OK on the other.I should have cut the bad ones loose at the end of 6 months. They became a major pain in the butt.The other one was fine.In general, get rid of the sellers ASAP.

    1. Hoo boy, agree entirely. Some day I can share the story that backs this one up 110%, JLM… 🙂

13. At some point maybe you want to take a crack at the marriage from hell: AOL Time Warner. 🙂

    1. Oh now, I think you’re speaking of that too harshly.AOL made out like a bandit, after all… 🙂

       1. You know, some people think Steve Case is a Hero. He saved his company right before the end of it all

14. Unless the head of the acquired company will be reporting directly to a C-level executive at the acquiring company, then the value of the “executive sponsor” cannot be overvalued.At a large company, your future is directly tied to executive enthusiasm. Your funding, staffing, outside marketing and visibility and more are all tied to how excited the executive team is. If that wanes, so does your odds of future success.

    1. once burned twice shy

15. Great post Fred. One key thing to note is to understand the motivations of the buyer and their track record in M&A (or plain old A) – case in point – if you look at 15 years of M&A activity by say National Semiconductor (had 1st row seats back in the day) and the same for Broadcom – its amazing how two companies in the same industry, often in the same technology could have two utterly different results – every one of National’s acquisitions (multiple Bluetooth, other wireless, processors) effectively failed to produce value for the buyer and frittered away the tech advantage the seller had. In direct contrast practically everyone of BRCM’s acquisitions panned out (even when it involved multiple acquisitions in a single domain) – more importantly most of the folks from the acquired companies are still around (many a decade later) in significant roles.I had my turn to sell a company, where we chose to go with a BRCM competitor – and while not as bad as National, it was clear that between the clarity the M&A champion had and the actual mechanics of integration – (alas Noah’s Ark all over again) there was a huge chasm that ended up destroying a whole lot of value. It didn’t help that two other acquisitions followed close on the heels of our own, across three countries. That is a key point that you haven’t touched upon Fred – namely culture – the strategy may be sound, the money may work out, but if the two companies don’t have cultures that match its doomed to fail from day one. And due diligence doesn’t always reveal this, as I learned the hard way.

    1. great point. i should have touched on culture. it is critical

16. One point about M&A integration plans that is non-obvious is the fact that there are two stages. Pre-close phase is all about defining plan, roles, compensation and expectations post-close. Post-close is all about EXECUTING the pre-close plan.I have seen way to many companies nail the pre-close, only to screw the pooch on the post-close plan.Why is this? Often, the folks who deal with Corporate Development and M&A have clear marching orders and a well-defined process, whereas post-close, you are dealing with the actual operators, who too often aren’t enmeshed in the nuances and must-have details that make that transition seamless.As a result for the acquired, it’s a quick transition from penthouse to outhouse.

17. One point about M&A integration plans that is non-obvious is the fact that there are two stages. Pre-close phase is all about defining plan, roles, compensation and expectations post-close. Post-close is all about EXECUTING the pre-close plan.I have seen way to many companies nail the pre-close, only to screw the pooch on the post-close plan.Why is this? Often, the folks who deal with Corporate Development and M&A have clear marching orders and a well-defined process, whereas post-close, you are dealing with the actual operators, who too often aren’t enmeshed in the nuances and must-have details that make that transition seamless.As a result for the acquired, it’s a quick transition from penthouse to outhouse.

    1. You gotta love — “…it’s a quick transition from penthouse to outhouse!”You salty old dog you! No truer words ever spoken.

       1. Old dogs, new tricks, penthouses and outhouses. Somewhere there’s a haiku (or pony) in there. 🙂

    2. In my experience the Corp Dev people (of the acquirer) are quickly on to the next deal. They just don’t find PMI sexy and look on the operators as lower on the food chain and don’t do much to pass on their process or expectations.Remember too that often there is age asymmetry where the folks running the big P&Ls are very seasoned while the Corp Dev group has maybe a few somewhat seasoned smartalecs and then a few analysts are pre- or just post-MBA who came from banking with zero operating experience but are collecting all the data and making the recommendations. (Usually they don’t stay long in the BigCo anyway)The trust level internally is low; they don’t like each other much. I’ve seen some really good exceptions to this (although only in a holding company environment and so far never in an operationally integrated environment)More typically once Corp Dev is clear, organizationally, where this transaction is going to be parked, the business unit plans to take it from there and not look back. They own their P&L and need to deliver on it so will do what serves them best for their internal metrics and not the transaction metrics.They just don’t care much what smart-assed-MBA-kid-from-Corp-Dev promised tiny-hot-sh*t-tech-co. It just doesn’t matter in their world.

       1. Structurally, it makes sense why it plays out the way it does — both in terms of organizational structure and the high failure rate of M&A to add long-term value.After all, most decent-sized organizations are fairly silo’d to begin with, so to expect a cross-unit effort to run smoothly in that context is to expect gravity to take the day off.Then again, why spend so much brain-power on M&A if you are not going to take/institutionalize a lifecycle perspective on the endeavor?

          1. i don’t disagree with you. I’ve just seen time and again the dealmakers (acquisition side) over-simplify and under-estimate the integration effort…and therefore under-invest in it.wish it weren’t so, but it just is.to give it some color, my husband and i have both done a lot of this type of integration work. in the past when people have asked either of us ‘what do you do?’ and we try to explain it, they don’t give it much credence. they don’t really ‘get’ the amount of work and complexity to get it all right. because much is dealing with and owning all the unanticipated crap.they appreciate it more in the breach than the observance, a luxury. which is why often we’d ultimately be called in after 1 or 2 failed attempts at a point when they have to pull the baby out of the fire.the other thing is the career path isn’t so clear. you may or may not get a role in this organizations you’ve built/redesigned. so what do you do? on to the next merger integration? or just leave the company. or do it as consulting. you are by definition homeless.everyone *thinks* they can merger-integrate but few do it well.but, hey, what do i know. 🙂

             1. “Just Add Water.” That’s the axiom I use for people’s inane reduction of serious workflow/orchestration types of complexity to simplistic analysis.

18. It takes a very strong leader in the acquiring company to assure that the rationale for the deal comes to fruition through an integration plan. As soon as the company comes into the enterprise each part of the organization tries to exert their own agenda against the company, imposing (for right or wrong) their priorities, culture, hiring requirements, financial benchmakrs, etc. All of these collective actions put the success of the acquisition into jeopardy and the deal lead needs to spend a lot of time fighting fires.Getting cross-functional agreement on the integration plan is a good step, but will not magically make everyone behave the you would like. Imagine the head of engineering for the parent company agrees not to rewrite the technology for 12 months. Then his VP has to actually manage an unfamiliar tech stack that doesn’t meet corporate standards, eating up his teams’ time. How long will that original integration plan hold without someone constantly reinforcing the priorities? How long will the CFO of a public company keep adding headcount to a money-losing division just because it was part of the plan? How long will the VP Sales dedicate effort to a product line that might be smaller and lower margin than the “core” business?In my mind the most important success factor for the integration plan is someone with a passionate voice at the acquiring company who is at least 50% dedicated to the job of integrating for at least 12 months. No plan alone can account for all the complexity of integration.

    1. thanks for sharing that ari. makes perfect sense. i am sure you haveseen it up close.

    2. So true about dedicating resources to the integration plan for an extended period and 12+ months sounds right.There is always a huge amount that comes up that you never could have anticipated.A full-on integration is really no different, work-wise, than a turnaround….except maybe harder. At least during the turnaround you have permission (and market imperative) to make tough decisions.During integration everyone walks in in a positive kumbaya mode which has them believe the old way was the best and that change is unnecessary. They are more resistant in a merger. In a turnaround, they’re relieved to keep their jobs.

19. Good post Fred, one area I want to expand on is people and culture..The ‘common’ knowledge is about one-third of mergers succeed while two-thirds fail. In most cases they seem to fail because of how people worked or not did work with each other i.e. culture. Which it often is driven by fear, resulting from a lack of trust. So the counter to some failure – is how do you build trust.I believe that this has to start in the Integration Plan.For example if you invade a country without knowing what’s next, how can you ensure the success in the subsequent national building? If you however know what you need to do to build the nation, than the deliberate choice of strategy and tactics for invasion can speed up the process of national building. Current M&A is not much different in concept.I think however M&A is evolving and we are starting to see the next generation. Similar to HR evolution, first it was Personnel (you will do what the organization tells you) to Human Resource (we accept you are a human but you are still just a resource) to People. This is partly reflected in the jobs titles. Whilst VP Personnel saw key people as just chess pieces to be moved around a board where as a VP People will often look at not just your official role but also the impact you have on people (eg social glue, the councillor, the jester, etc). I still see lots of examples of chess piece generals in M&A but there are also other examples to e.g. Zappos.I was involved in a ‘project’ where we merged seven organisations, totally 22,000 staff and £1.15 Billion. A lot of my inspiration how this should be done came from peace negotiations. Start with establishing principles and values on common ground and a lot of facetime. I think partnership/stakeholder management from the non-profit and government sectors have a lot to teach private sector in establishing common ground and understanding.One book I found really helpful on this subject from the people side is Tony Hsiehs’ book ‘Delivering Happiness’ he talks about a couple acquisitions including Zappos by Amazon. His last M&A seems to be a great success you have to just read Zappos 2009 Culture Handbook, every member of staff states what it is like to work at Zappos.

    1. second comment on culture and such a great point. big miss by me in my post

20. @Eric Brooke makes a good point about trust, which is essential to a successful integration. So where does trust come from? First, by being trustworthy. Second, from building shared goals and values throughout the acquisition process. This is easier to grok in a blog post than it is around the negotiating table, where most of our time and attention is focused on adversarial issues like price and risk allocation. Business leads should be upfront about what they need to get from the adversarial points to achieve their immediate financial goals from the transaction — but try to minimize overreaching.Most M&A lawyers have two forms that they use as precedents when drafting acquisition agreements: a seller form and a buyer form; both entirely one-sided. Considerable time and energy can be expended hammering out the differences, but the points “won” by each side are often outweighed by the loss of trust. (It’s hard to spend 12 hours combing through a 60 page merger agreement, looking for the ways the other side has tried to subtly take advantage of you, and not end up paranoid, or at least skeptical of the other side’s motives.) A better approach is to start with a balanced form, based on current market terms, modified with the two or three key points the business team feels they have to get.

21. As usual, a great post.One thing that people often miss is the importance of non-executive personnel.First, the buyer needs to concentrate on who is really important to post-closing success before pre-closing (ideally, before signing) and make sure they buy into the new situation. Most buyers understand that they need to think about the top executives, but that’s often too narrow. Good diligence should focus on finding key people below the executive suite. A key engineer, salesperson etc. can make a huge difference to the business. As to getting those people on board, the buyer needs to come up with a plan and then talk to the people one-on-one as soon as possible to get their input and modify the retention plan accordingly. It’s great to do this before signing, but sellers often won’t allow it because they don’t want word of the acquisition spreading through the organization. The main point is to know you have to find those people and that merely getting them to sign an employment contract or offering them a slug of options won’t necessarily get them on your side. They’re people. Figure out what matters to them emotionally and make sure they get it.Second, not all buyers get that significant organizational knowledge (including a lot of IP) resides in people, not records. When I was a young associate, a large-company client bought another large company doing the same business in a different location. They figured that they already had their own HQ staff, so they dismissed the target’s entire HQ staff within a month or two after the acquisition. A few months after that, the buyer wanted to raise capital and needed to get ready for underwriters’ diligence. I was shown a large conference room full of boxes and told that somewhere in there were all of the target’s business records. No one at the company knew anything more about what was in those boxes! Let’s just say that our legal fees almost certainly exceeded the salaries of two or three well-chosen administrative assistants, records clerks and paralegals. Needless to say, those experienced, low-level employees could have produced a much better result than our team of high-priced lawyers.If you’re buying IP, make sure you’re going to get a “warm handoff” or you’ll end up with a similar situation: A jumble of random papers and electronic files with no idea how to put them together into something valuable. The contract can promise that you’re acquiring all the target’s “know how” (it usually does), but you need to make sure that the people who actually know are either coming along or form a realistic plan to get those people to show the ropes to their successors. If you’re relying on a contractual arrangement, such as a post-closing consulting or transition services contract, make sure the contract makes it worth the other side’s while to perform. A general agreement to “cooperate” after closing (without any additional payment) won’t get you much that you wouldn’t get just by calling and asking nicely. You’ll get some quick answers to simple questions, but you won’t get anyone to spend long hours doing hard work. If you want someone to do a job, make sure they understand that and that you’re paying them for it.