Choosing the Right Counsel
A company’s legal counsel plays a leading role in managing the IPO process. Frequently, the current legal counsel does not possess the expertise or experience required to take a company public. The first step in choosing a counsel that is right for your company is to evaluate the one you currently have. You can use the criteria that we put together in the last article to ascertain whether the team you already have can fit your needs. Meet with the CEO and CFO to solicit their input on the current counsel as well as input from the Board. Ask the Board Committee about their needs and preferences. Request that the existing counsel present their IPO capabilities and staffing proposal. Are they suited to handle the IPO? What would be the cost of switching?
If the decision is to retain a new counsel, then the next step would be to create a list of leading firms. Review prominent IPO attorneys and seek input from the Board members. As with any selection of individuals who provide professional services, the right chemistry must exist between a management team and the company’s securities counsel. The chosen attorney will become the quarterback of its registration process. And the counsel must be professionally competent with the ability to put into plain English technically challenging concepts and descriptions of complicated transactions. They must be able to evaluate large amounts of information and turn around documents quickly. It is imperative you find an attorney who is experienced with the IPO process and with the industry. This attorney should be hand-picked, one who the company is comfortable with and one who will protect company interests when dealing with the underwriters and the SEC staff.
If you think you have found that special company to fit your needs, then the last step is implementation. You will need a negotiable retention letter and an arrangement for transfer of files. It will be necessary to provide all of the background materials like financing documents, charters and minute books. Lastly, arrange an orientation meeting with the company executives. The IPO journey is complex and can potentially lead to a number of oversights and mistakes along the way, so make sure you have a good legal backbone to provide the needed support for your IPO.