While it is important that law firms improve efficiency – partly by using technology – they should also ensure that the quality of the service they offer does not suffer, according to Rodrigo Martos Prat, partner at GMQ Abogados in Madrid.
“Through the adequate use of technology – virtual data rooms are now a must, for example – and the use of experienced teams of lawyers, efficiency can be highly increased,” Martos Prat says. “In addition, clients seek a commercial approach from their M&A lawyers, involvement in the transaction, and follow-up on the deal that goes one step further than mere legal advice.”
However, Martos Prat warns that efficiencies should not come at the cost of quality. “There is a tendency to consider that certain due diligence and transactional work can be outsourced by legal firms which, in my opinion, means these services not only lack added value but are probably unnecessary,” he says.
Martos Prat believes there is a risk in thinking that valuable M&A services can be commoditised in that such services may lack “high added value and efficiency” as a result. Added value is of great benefit to investors when identifying risks in relation to target companies and enables clients to manage the legal documents in a transaction with the help and close involvement of experienced lawyers, he explains.
The importance of this type of work for clients is made more significant because M&A activity is increasing in Spain due to good prices and more lending by banks and increase private equity investment, according to Martos Prat.
He says recent years saw major divestments of distressed assets. “Now investors that have successfully managed their investments are selling these assets for good prices.”