Quick overview of the legal research process

Quick overview of the legal research process

The research path you follow will vary depending on the nature of your topic and legal issue. There is no single “right” path to take in conducting   legal research. While there will be times when you will follow the research steps suggested herein in a linear fashion, that will not always be the case. 

Regardless of the path you follow using the steps below, if you are thorough and flexible in your research you will succeed!

  1.    Identify the scope of the legal question.   Ask specific questions to identify:

(a) the relevant jurisdiction

(b) key sources and search terms

(c) the applicable time period.

  2.   Begin your research by consulting a secondary source.

Core texts, Halsbury’s Laws, key articles, can give perspective on how your specific issue fits into a broader legal context and will assist you in finding on-point primary authority.   These are particularly useful if you have no experience of the area of law as they will act as a background. Note references to pertinent statutes and case citations.  Search for articles on the topic using the main legal journal indexes.  These include the Legal Journals Index (on Westlaw), Index to Legal Periodicals via Oxlip+ and Google Scholar.  You can also widen the scope of your search to outside the legal indexes and search the Social Science Citation Index as well.

  3.   Identify relevant statutes.

If you located an applicable statute in your review of secondary sources, review the annotations for the applicable provision in Halsbury’s Statutes or on one of the various databases (Westlaw, Lexis Library, Legislation.gov). Browse the contents of the statute to identify any other pertinent sections. Browse the contents page of the Halsbury's Statutes volume to find other relevant statutes.  Look at any analysis documents available on the databases.

  4.    Identify the cases that are on-point for your specific facts.

When reading secondary sources, note cases that relate to your set of facts. Follow up the cases, checking headnotes and reading judgments that seem applicable. One good case can be a great starting point for research on narrow topics.

  5.   Use digests and databases to find more cases.

Digests provide another excellent resource to identify relevant case law. The Digest is a good source for finding English and Commonwealth cases by topic. It has the same subject structure as Halsbury’s Laws.  You can also search for cases on the databases using subject terms.  You may need to think about your search terms carefully as the database are very large. Use Boolean operators and connectors when possible to increase the accuracy of your results.

   6.    Confirm that your authority is still good law.

Use Westlaw Case Analysis, Lexis Case Search or a print citator to check that your cases are still good law and provide the most current, direct authority available for your set of facts.

   7.    Search other online sources to fill any gaps in your research. 

There are many other online sources other than Westlaw and Lexis Library.  There are free sources such as the Legal Scholarship Network which can be useful for recent articles as well as Google Scholar, Bailii and Legislation.gov. Blogs, policy websites and so on are also useful, depending on the topic but you must be careful to evaluate the information you find on the web for accuracy.

   8.    Keep a record of your research trail.

Document all sources reviewed, including all sections and page numbers, regardless of whether you located relevant materials in them. This will help you later when you write up your research and need to check points.

  Some keys to legal research success:

(a) Get to know your librarian

(b) Take the courses on topics/searching/endnote etc on offer

(c) Get out of the Google-search mindset – ask us the tricks of each database

(d) Look beyond Lexis and Westlaw

(e) Use secondary sources

(f) Know when to stop

LEGAL RESEARCH

LEGAL RESEARCH

Legal research is "the process of identifying and retrieving information necessary to support legal decision-making. In its broadest sense, legal research includes each step of a course of action that begins with an analysis of the facts of a problem and concludes with the application and communication of the results of the investigation."^[1]

The processes of legal research vary according to the country and the legal system involved. However, legal research generally involves tasks such as:

1.   Finding primary sources of law, or primary authority, in a given jurisdiction (cases, statutes, regulations, etc.).

2.   Searching secondary authority (for example, law reviews, legal dictionaries, legal treatises, and legal encyclopaedia as such as American Jurisprudence and Corpus Juris Secundum), for background information about a legal topic.

3.   Searching non-legal sources for investigative or supporting information.

Legal research is performed by anyone with a need for legal information, including lawyers, law librarians, and paralegals. Sources of legal information range from printed books, to free legal research websites (like Cornell Law School’s Legal Information Institute, Findlaw.com, Martindale Hubbell or CanLII) and information portals to fee database vendors such as Wolters Kluwer, LexisNexis, Westlaw, and Bloomberg Law. Law libraries around the world provide research services to help their patrons find the legal information they need in law schools, law firms and other research environments. Many law libraries and institutions provide free access to legal information on the web, either individually or via collective action, such as with the Free Access to Law Movement.

Database and Software Tools

·        Free-to-use

Although many jurisdictions publish laws online, case law is often accessed through specialty online databases. Free-to-access services, through the free law movement, include: Australasian Legal Information Institute, British and Irish Legal Information Institute, CanLII, Legal Information Institute, LexML Brasil, World Legal Information Institute, Mindworks and Jurispedia.

·        Commercial

Commercial services for legal research include both primary and secondary sources. Commercial services can be country-specific, international or comparative. Some governments also provide access to certain resources through paid databases

Third party legal research provider

Legal research is known to take much time and effort, and access to online legal research databases such as LexisNexis and Westlaw can be costly. Consequently, with due consideration given to ethical concerns, law firms and other practitioners may turn to third-party legal research providers to outsource their legal research needs

Legal Research Methodology

Legal Research Methodology

Legal research can be time consuming and sometimes offers limited results, but an understanding of the basic types of law, legal resources, and subject terms will aid the process.

This guide can give only a brief overview of the fundamentals of legal research. The best way to become familiar with legal research is to have a law librarian guide you the first time you undertake it. Although it may not make doing the research less complex, it will make the process more comfortable, which will allow you, the researcher, to consider the possibilities of what you are finding rather than becoming frustrated by the citation numbers, legal jargon, and variety of publishing practices.

Secondary Sources As Good Starting Points

Legal encyclopedias are a good source to consult first if you are unfamiliar with law and legal concepts. They combine primary and secondary sources to provide overviews of many aspects of law, and they give numerous citations to relied-upon authority.

Today, there are two major legal encyclopedias: Corpus Juris Secundum (CJS) (1936-) and American Jurisprudence (AmJur), 2nd edition, (1952-). For historical research, the older editions, Corpus Juris (1914-37) and American Jurisprudence (1936-52), are useful, as well as The American and English Encyclopaedia of Law (1887-96; 2nd edition, 1896-1905) and Ruling Case Law (1914-21). It is important to remember that each of these encyclopedias is different. Different topics, different subject headings, and different case law may be provided in each. In Corpus Juris Secundum each section has a summary of the law, usually in boldface type, and a reference to a topic heading (a key number) used in the West Digest System, which gives further access to related case law. In American Jurisprudence, research references (usually to American Law Reports, or ALR) are given under each major heading.

Legal treatises are also good sources for general information on substantive law, though most do not focus specifically on women's issues and rights. Consulting a treatise on a specific subject will usually yield some background information and, more important, citations to statutory or case law. Many of the treatises focusing on women were not published until the 1970s, but a few were published earlier. An early one that did relate specifically to women was Woman's Manual of Law, by Mary A. Greene (1857-1936), written in 1902 to “present in a clear, simple, and if possible, entertaining way, those principles of law governing the business world and domestic life which most men understand in some degree, or think they do, but which most women do not understand, and wish they did.”¹

Identifying the Appropriate Index Terms

When consulting legal treatises, encyclopedias, periodicals, digests, and codes, a variety of index terms are useful in researching issues concerning women. For modern sources, index terms familiar since the 1960s, such as “woman,” “sexual harassment,” and “marriage,” can be used. The best technique for searching an index is to begin with a narrow term and broaden the search. For instance, if you are trying to determine whether a state has laws on the battered-wife syndrome, start with the narrow term “battered wife syndrome.” If that does not yield results, broaden your search to “spousal abuse.” If you do not find either of these phrases, use the broader term “domestic violence.” Searching under antonyms, synonyms, and associated words of all kinds may lead to useful information.

Researching historical issues can be problematical because the legal status of women changed over time. The researcher must try to think the way an eighteenth-, nineteenth-, or early-twentieth-century legal scholar might have thought. Most legislation pertaining to women concerns them indirectly. Married women were considered “silent partners” in marriage relationships. As a result, “woman” or “women” were rarely used as indexing terms. By and large, indexing terms reflected a woman's relationship to a man. Terms such as “wives,” “dower” (a dower² being the portion of real and personal property of a deceased husband that the law gives to his widow during her life), “widows,” “coverture,” “femes covert” (married women), “femes sole” (single women), or “females” were used.

Normally, unless the application of a law treats men and women differently, there will be no distinct subject terms for indicating gender in an index. For instance, contract law applies to any party to a contract regardless of gender or position as long as the requirements for contracting are met, so there are no distinct headings for women; whereas property law, a substantive area, has distinct headings for women, because widows held a unique position in estate and succession laws. It is important to remember to make the distinction between law and social conditions in dealing with women's issues. Often, it was not the wording of the law that prohibited women from doing certain things, but the social interpretation of the law influenced by mores.

Next Steps: Understanding the Major Types of Law and Jurisdiction

Once you have become familiar with a legal topic from reading an overview of it in a legal encyclopedia, treatise, or other secondary source, you will likely want to explore it further in a host of primary legal sources. Before doing so, it is helpful to understand about the three major types of law and the significance of legal jurisdictions.

Although the term law is often used generically, there are three major categories of law, each of which is described more fully in the following subsections of this research methodology:

• Common law or case law, which is created by a judicial body, such as the Fourth Circuit Court of Appeals or the Virginia Supreme Court.
• Statutory law, which is created by a legislative body, such as the U.S. Congress or the State of Maryland General Assembly.
• Regulatory law, which is created and enforced by an administrative body, such as the U.S. Department of Labor or the State of Michigan Fair Employment Practices Commission.

Any or all of these categories might apply to any given topic relating to women. In many instances, these laws are interdependent, although they may appear to function independently. To add to the complexity, these types of laws are created by the appropriate body in each of the different jurisdictional units:

• federal
• state
• regional
• county
• city

In other words, each jurisdictional entity has governmental bodies that create common, statutory, and regulatory law, although some legal issues are handled more often at the federal level, while other issues are the domain of the states.For example, civil rights, immigration, interstate commerce, and constitutional issues are subject to federal jurisdiction. Issues such as domestic relations, which includes domestic violence; marriage and divorce; corporations; property; contracts; and criminal laws are generally governed by states, unless there is federal preemption. State laws and terminology will vary from state to state, and there are few comparative guides available. It is better to look at a specific state's laws or court decisions or to compare several specific states' laws and court decisions rather than to attempt to generalize about the legal criteria followed by all states.

Reading Legal Citations

Most primary sources are chronologically arranged. To find them, you must be able to read legal citations, which are fairly uniform in their format. In such citations, the number preceding the name of the source ordinarily refers to a volume or title number. The number following the name of the source refers to the page number on which the cited material begins or the section number if the first number is a title. For instance, Pub.L. 88-352, Title VII, 78 Stat. 241 indicates that Public Law 88-352, Title VII, can be found in volume 78 of the U.S. Statutes-at-Large on page 241. The United States Code citation for the same law, 42 U.S.C. § 2000e et seq., indicates that the beginning of the codified law is found in Title 42 of the United States Code, section 2000e. Similarly, Meritor Savings Bank v. Mechelle Vinson et al., 106 S.Ct. 2399 (1986), indicates that the Supreme Court decision is found in volume 106 of West's Supreme Court Reporter on page 2,399. Tables of abbreviations will help you identify an abbreviation. Legal dictionaries, dictionaries of legal abbreviations, and the Bluebook: A Uniform System of Citation provide commonly used abbreviations and acronyms.

Importance of Legal Research

Importance of Legal Research

Legal research is an essential lawyering skill

The ability to conduct legal research is essential for lawyers, regardless of area or type of practice. The most basic step in legal research is to find the leading case governing the issues in question. As most researchers know, this is far more difficult than it sounds.

§  Often the issues are not correctly identified, or some issues are missed altogether. Issue identification is crucial for effective research.

§  The law is constantly changing. Recent decisions of the Supreme Court of Canada clearly show the fluidity of legal doctrine. Even where there is a recent decision of the Supreme Court of Canada, split decisions of the court make it difficult to determine how the next case will be decided.

§  In many areas there are conflicting decisions, or no binding authority. You must then research the law of other jurisdictions, and apply creative analysis to the existing case law or create an argument based on first principles.

Finding the law is an important part of legal research, but the ability to analyze what you have found and reach a conclusion or formulate an argument based on it is just as essential. Kunz and Schmedemann expressed this view in The Process of Legal Research (Boston: Little, Brown and Company, 1989) at pages 6-7:

As a beginning researcher, one of the bigger mistakes you can make is to envision legal research as a bibliographic checklist of sources to consult. Clearly you need to be familiar with the various sources and their location in the library, but that’s not all. You also need to formulate research strategies that tell which source, of several sources, you should consult. And your strategy should incorporate flexibility. Successful researchers continually re-evaluate their research methodology and consider alternative research approaches as they find that various sources or research approaches are helpful or fruitless. Even more important, you also need to learn how to advance your analysis of a law-related problem by means of your research. Even the most diligent researcher, armed with the latest technology, will not arrive at a successful result if he or she approaches legal research as a mechanical process devoid of analysis. Thus, legal research is really just a portion of legal problem-solving.

Standard of legal research required

Our courts have set the standards they expect of counsel appearing before them. In Lougheed Enterprises Ltd v. Armbruster (1992), 63 B.C.L.R. (2d) 316 (C.A.) the court held that counsel has a duty to be aware of all cases on point decided within the judicial hierarchy of British Columbia, and to refer the court to any on which the case might turn. The court noted that “on point” does not mean cases whose resemblance to the case at bar is in the facts. It means cases which decide the same point of law. You may think you can justify not referring to a binding decision because it is distinguishable on its facts. However, such a determination is for the court to make: not counsel.

The court in Lougheed v. Armbruster held that:

§  Counsel cannot discharge his duty by not bothering to determine whether there is a relevant authority. Ignorance is no excuse.

§  The duty to the court does not go as far as the duty to one’s client to be persuasive, which often requires counsel to produce authorities outside the hierarchy of British Columbia.

§  Counsel are not expected to search out unreported cases, although if counsel knows of an unreported case on point, he must bring it to the court’s attention.

This ruling on unreported cases is in the context of counsel’s duty to the court. The duty to one’s client to be persuasive arguably goes beyond this and requires counsel to include these cases within her research. Given the ready availability of recent unreported cases on both commercial and free Internet sites, counsel has an obligation to her client to review this body of law. Even if you are not familiar with the most recent unreported cases, the judge or counsel on the other side probably will be.

Failure to have conducted proper research can have devastating consequences.

In World Wide Treasure Adventures Inc. v. Trivia Games Inc. (1987), 16 B.C.L.R. 135 (S.C.), counsel applied for an injunction without first understanding or researching the applicable law. Gibbs J. ruled that counsel had been negligent in the performance of his duty, and awarded solicitor-client costs against counsel personally. The amount of the taxed bill of costs was significant.

Perhaps the strongest criticism of counsel’s failure to conduct research was levelled in Gibb v. Jiwan, [1996] O.J. No. 1370 [Q.L.] (Ont. Gen. Div.) by Ferguson J. The case involved a dispute over priority to claims against land registered under the Ontario Land Titles Act. After deciding the point of law, Mr. Justice Ferguson commented extensively on the failure of counsel to conduct adequate research, noting the professional obligation of counsel:

§  to be competent

§  to keep abreast of developments in their own area of practice

§  to give their clients advice based on an adequate consideration of the applicable law

§  to inform the court of relevant material authorities regardless of whether they support or contradict the position counsel is advocating.

He ordered both counsel to deliver a copy of his reasons to their clients.

In Central & Eastern Trust Co. v. Rafuse, [1986] 2 S.C.R. 147, 31 D.L.R. (4th) 481 at 524, the Supreme Court of Canada ruled that:

A solicitor is not required to know all the law applicable to the performance of a particular legal service in the sense that he must carry it around with him as part of his “working knowledge”, without the need of further research, but he must have a sufficient knowledge of the fundamental issues or principles of law applicable to the particular work he has undertaken to enable him to perceive the need to ascertain the law on relevant points … “and to discover those additional rules of law which, although not commonly known, may readily be found by standard research techniques”.

A litigator who has not conducted sufficient research thus faces the possibility of being sued by his client, and also of censure by the court through an award of costs. For a solicitor, failure to understand the law or conduct the research necessary to gain an understanding of it, will result in personal liability to the client.

Complexity of modern legal research

Although we have more tools for conducting legal research than our predecessors, the research task has become harder rather than easier. There are more bases to cover.

§  Computer research has introduced the need to be completely current, and to develop new skill sets.

§  There has been a dramatic increase in the volume of case law and statutory material.

§  Secondary sources have grown exponentially.

§  The law of other jurisdictions must often be researched.

The days when counsel could be reasonably sure they knew the law without having to look it up has long passed.

In order to cover this large volume of material, you need to conduct efficient and effective legal research. The key to this is developing a research strategy, and following good research methodology. The more familiar you are with the resources available, the faster you can develop your strategy, and the more effective it will be.

There are several guides available (see Canadian legal research guides) to assist lawyers in finding the appropriate resources for conducting their research. If you are looking for detailed bibliographic information on research sources, these resources can help you. The emphasis in this website is on research strategy and methodology.

Empirical Research

Empirical Research

Empirical research is based on observed and measured phenomena and derives knowledge from actual experience rather than from theory or belief. 

How do you know if a study is empirical? Read the subheadings within the article, book, or report and look for a description of the research "methodology." Ask yourself: Could I recreate this study and test these results?

Key characteristics to look for:

• Specific research questions to be answered
• Definition of the population, behaviour, or phenomena being studied
• Description of the process used to study this population or phenomena, including selection criteria, controls, and testing instruments (such as surveys)

Another hint: some scholarly journals use a specific layout, called the "IMRaD" format, to communicate empirical research findings. Such articles typically have 4 components:

• Introduction: sometimes called "literature review" -- what is currently known about the topic -- usually includes a theoretical framework and/or discussion of previous studies
• Methodology: sometimes called "research design" -- how to recreate the study -- usually describes the population, research process, and analytical tools
• Results: sometimes called "findings" -- what was learned through the study -- usually appears as statistical data or as substantial quotations from research participants
• Discussion: sometimes called "conclusion" or "implications" -- why the study is important -- usually describes how the research results influence professional practices or future studies

Usage

The researcher attempts to describe accurately the interaction between the instrument (or the human senses) and the entity being observed. If instrumentation is involved, the researcher is expected to calibrate his/her instrument by applying it to known standard objects and documenting the results before applying it to unknown objects. In other words, it describes the research that has not taken place before and their results.

In practice, the accumulation of evidence for or against any particular theory involves planned research designs for the collection of empirical data, and academic rigor plays a large part of judging the merits of research design. Several typologies for such designs have been suggested, one of the most popular of which comes from Campbell and Stanley. They are responsible for popularizing the widely cited distinction among pre-experimental, experimental, and quasi-experimental designs and are staunch advocates of the central role of randomized experiments in educational research.

DUE DILLIGENCE

DUE DILLIGENCE

The mistake is thinking that there can be an antidote to the uncertainty. In a corporate world, where a shed load of transactions take place at a light blazing speed, the degree of uncertainty achieves its highest form. This is so as no one knows how the government’s policy towards the company might affect it, or what would happen by a key personnel’s resignation from the company, or if the company loses its top notch investor. Anything is possible at anytime. For these above mentioned reasons, every company should conduct a legal due diligence and be prepared for the unpleasant surprises (if any) before entering into any merger & acquisition deal.

What exactly does this term mean?

For a layman, the term ‘Due diligence’ means the reasonable verifications and precautions taken to identify or prevent foreseeable risks. It is the process in which an action is arrived at before consummating it. Legally speaking, due diligence is “ a measure of prudence, activity, or assiduity, as is properly to be expected from, and ordinarily exercised by, a reasonable and prudent person under the particular circumstances; not measured by any absolute standard but depends on the relative facts of the special case.” In the words of Crilly’s Due Diligence Handbook it is a process whereby an individual, or an organization, seeks sufficient information about a business entity to reach an informed judgment as to its value for a specific purpose.

It is that part of the acquisition wherein the buyer company needs and demands to know whether they will be able to get the returns for as much investment they’re making to buy the company. For this, the company would carry on a detailed and an in-depth investigation of the obligations of the company including its debts, leases, pending and potential lawsuits, distribution agreements, compensation agreements and the likes.

In R v Steinberg, Ontario judge Harris wrote:

“To require the steps taken by the company to absolutely prevent these occurrences under any circumstances whatsoever would go beyond due diligence, and would make the company a virtual insurer against any error. I do not think that was the intention of the legislation; the words all due diligence import an area of precaution sufficient to

prevent the foreseeable, but not the unforeseen, the unexpected, the unknown, or the unintended.”

Why Legal Due Diligence?

In today’s globalised world, legal due diligence is not just a task to be undertaken during M&A, but also stands as a necessity as M&A deals have the power not only to transfer the asset value but also the liabilities associated with that asset. This further means that the value of the company that is being brought cannot be understood without keeping in mind all the relevant legal issues under consideration which makes the process of legal due diligence all the more necessary. It is therefore considered to be a critical component of all the transactions in this 20^th century.

The main agenda for which undertaking due diligence is necessary is to minimize the risks, allocating the risks in another direction so that the risks gets nullified and thereby maximizing the shareholder value. By carrying out a proper due diligence, the risk factor related to the key issues that would be discovered later is reduced as a thorough scrutiny of the business is already conducted which gives a better idea for ascertaining the fair purchase price as well as helps to know the ups and downs of the subject therefore saving the money as well as the time that is involved in the whole deal process.

For a buyer, the due diligence process attempts to reveal the facts and the potential liabilities of the company under consideration thus saving them from the instability as well as surprise risks and dangers. There are many processes involved in the due diligence including the business due diligence, special due diligence, accounting due diligence and the legal due diligence. This article deals primarily with the legal due diligence part.

The Process

In a legal due diligence, the buyer company mainly focuses on two key subjects. The first is to determine the current status of the company. Determining the current position holding of the company to be brought up is the most intrinsic part of the legal due diligence as it sets a base for knowing the future of the company to a large extent. It very comprehensively helps in understanding that what exactly the buyers are buying as well as to lay out a plan for future projects related to it.

Secondly, a good legal due diligence should be able to tell about the consequences of the business as well as the ways to make the consequences favorable for the buyer company. The advisor will carry out a cost-benefit analysis to understand the impediments on the acquirer and the pros and cons of the transaction.

·         Step I- The Plan

According to Justin Levy, Partner at Winston & Strawn, the buyer should always hire the specialized services of a legal advisor or a consultant as this process is in itself complicated wherein both business and the industry issues need to be understood and one would be certain that the right questions are being put up and the probable risks are uncovered. Hence, the first step in this process should be to hire the professional legal services which would plan and strategize the whole process of the investigation.

·         Step II-The Research

For a successful legal due diligence process, both the buyer as well as the seller needs to cooperate together in helping each other to understand the broader picture first. Before the parties enter into legal agreements, the buyer party needs to go through the company’s accounts and data. If the company under consideration is a public one, the buyer can easily go through the governmental reports of the company whereas in case of a private company the buyer must ask the seller to show him with the summaries including the audits, balance sheets, websites et al. Particular attention on the legal due diligence should be paid if the company under consideration is a small one as they are not professionalized from a legal perspective. This is so as they do not have the infrastructure and the resources as much as the larger companies have. Another point to be considered is in respect to the deals with the regulated industries. One must have to be really cautious as they have stringent rules and it is very important to understand these industries and advise the client appropriately in helping him the mitigate the high risk factor.

Once all the legal documents which would include the incorporation document, shareholders warrants, any outstanding warrants, licenses & permits, the process should move on to the further task of inspecting all the litigations concerned with the subject company. It is a major task as it establishes a firm overview of the outstanding risks that the buyer company would have to deal with as well as forms a ground for a better understanding of the market.

The assets and the liabilities of the business should also be known. The target companies assets like cash, securities, inventory, intellectual property (copyrights, trademarks, patents, domain names, and other proprietary rights) as well as the liabilities like bank debt, licensing violations, bonuses earned and yet not paid should be paid a thorough investigation in the process. The list of all the employees as well as their current salaries should be keenly scrutinized in order to know the way the company pays its people.

After this, the major problem of locating and managing the hidden assets and liabilities has to be tackled as there are certain assets and liabilities in every company which do not appear anywhere in the balance sheets such as the unregistered lands, assets held by a nominee, unregistered intellectual property, contractual rights and obligations. For reviewing this, the historic financial records, internal announcements and the likes need to be investigated. The customers’ complaints on the internet should also be searched for as it would lead to know the good and the bad of the company in a better way. The public registers should also be searched for in the process not only with the current company name but also with its former name.

If possible, the current personnel of the company should be interviewed to know the company better.

·         Step III- The Analysis

After the company has cleared stage II of the legal due diligence process, the buyer with the help of their advisors need to analyze all the findings in a proper systematic way. It is always advisable to chase the ‘red flags’ or any questionable or a suspicious document found in the process of investigation to its root. Preferably a due diligence questionnaire must be prepared highlighting all the key areas that are needed to be examined. In this way, the main areas which are to be examined can be highlighted giving a better picture. The purpose of filling the questionnaire is to help the researcher make sure that he has considered all the major areas of the legal due diligence.

The duration of the process of legal due diligence normally varies depending upon the size of the company under consideration. It can take place for a few days, for a relatively smaller company to a several months if the company is larger and has more complex transactions. The process of legal due diligence then ends when the buyer is fairly satisfied and had analyzed all the relevant issues related to the company and is able to understand the market fairly well. Every buyer of the company would try to complete the due diligence process before carrying out the primary agreements with the seller party.

·         Step IV- The Presentation

Lastly, the legal due diligence findings need to be presented to the buyer by the counsel/advisor that carries out the investigation. As the buyer would be unknown to the legal terminology, the report should be presented in the easiest and the most user-friendly way. For small deals, the presentation should preferably be presented in the verbal form while for the big deals involving more financial resources, the legal due diligence findings should be presented in a memorandum format listing all the documents investigated, key issues discovered and the solutions thus suggested for resolving the issues. The buyer should explicitly convey to its advisor about his priorities and expectations from the deal in order to get a more streamlined report highlighting his main concerns and keeping them at a priority.

Conclusion

Legal due diligence, although a very complicated and tiresome process but once the buyer undertakes it and get the results, he can be sure whether his investment in the company would be a good decision or not. To top it all, the buyer gets a clear picture as to how he would need to run the company as he knows all the grey areas related to the company as well as the working in the market. Not only this, the memorandum which the buyer’s counsel prepares during his process of investigation also helps in drafting the merger and acquisition agreement and the related ancillary agreements. The information thus derived will be useful in allocating the risk while drafting the company’s warranties, its pre-closing promises and the post closing indemnification rights of the buyer. Thanks to his worthy investigator and legal advisor.

In this article, the concept of legal due diligence is highlighted with respect to the buyer. In certain cases, where the seller accepts consideration other than money, it may happen that he performs his part of legal due diligence too.

So, the next time one enters into any business transaction of M&A, one would know what he needs to do and go with his legal due diligence process which would give him a clear picture about his future with the subject company.

In the end, in the words of Jeffrey Weiner, eternal vigilance is more likely to be the price of successful deal making, and performing adequate, if not excellent, due diligence—the path to salvation.