You’ve stuck with me so far with this initial public offering business, so you know it’s a serious decision to move forward, and you know how important building the team really is, both internally and externally. Involving your company’s outside counsel and accountants will need to be one of your first steps in the IPO process. However, if the existing outside counsel does not have experience with public offerings of securities, you should really consider retaining another firm. Outside counsel and the underwriters will be conducting due diligence on your company to support your respective legal opinions, so it’s critical that they have experience with IPOs.
Your due diligence process should cover the scope of your patents, patent applications and potential risks to IP (intellectual property) litigation. What or where are your major markets? Have you filed trademarks in every major jurisdiction where you sell products/services?
Answering the questions below will help you to determine the right counsel.
- Does your current counsel have the required experience to lead you through the process?
- What are your needs and expectations in a counsel?
- Which firms can provide the support and have a proven track record of doing so?
- What skills or expertise are you looking for?
- How deep is the team?
- Who is leading the team?
- Is their recommended strategy compatible with yours?
- How can they help you stay on track and manage the project?
Think about finding outside counsel well in advance of the IPO. You will need a team with recent SEC experience in addition to specific expertise in areas of litigation, IP, and industries that are relevant to your company.
Many in-house lawyers without the securities law background choose to go with an “A” brand outside counsel. Because this step is so crucial, oftentimes the CEO or founders opt for the Cadillac of attorneys. It is really important that you connect with the outside counsel team. You will be working closely with them through long days and late nights, so a good working relationship is essential. Be aware that having a big name does not necessarily translate into a good fit. If a strong securities background is already in place, the law firm brand may not be as important as the makeup of the team that’s serving you.
Do thorough research; get input and opinions from colleagues who have gone through this process. Ask to review the prospects’ insider trading policies and compare to see which you prefer. Going public is a monumental decision for any company; it forever changes how it goes about doing business. Therefore, it is worthwhile to retain the expert direction and assistance needed to successfully stage your IPO. Take the time to enlist a sturdy outside counsel team to support you along the journey.
Stay tuned: In the next article, I will reveal how to put together your own criterion for choosing an outside counsel team.