A legal due diligence review is more than the legal equivalent to kicking the tires on an automobile. It is a thorough review that involves lawyers and CPAs who examine documents and facts. It involves a thorough review of many areas including a legal audit, which includes contracts, litigation liabilities and intellectual property as well as corporate records and regulatory compliance. It also includes a financial review which includes financial statements, accounting policies and tax returns. It also involves a review of try this site the management, organizational structure and the products, services marketing, sales, facilities and equipment.
Based on the size of the deal and the complexity of the company and the complexity of the company, the legal due diligence process can be demanding, particularly for large public companies which have virtual piles of information that lawyers must sort through. In the wake of this, many legal departments have begun using technology to streamline and speed up the process, for example a document review platform that integrates with AI tools.
Before starting the legal due diligence process, establish the structure and goals for the investigation. It is useful to create an outline of the key areas that need to be addressed and to get the legal team to agree on a strategy with the business owner. Prioritizing the areas that require professional assistance is essential. For example legal due diligence review of an IP holding company could include inquiries from an intellectual property specialist to determine whether the company has any significant patents or other intellectual property rights and whether there are any infringement lawsuits currently pending or threatened.