Today Chicago Lawyer talks with Meridith G. Cannon, a partner in the corporate services group at Quarles & Brady who has been practicing for eight years.
What do you find the most interesting about your practice?
As a corporate lawyer and business adviser, I have the pleasure of working with a number of clients operating their businesses in various industries. The variety of my client base results in different types of projects: mergers and acquisitions, commercial contract negotiation and preparation, corporate governance matters, etc.
The breadth of my practice requires me to become a mini-expert in the industries in which my clients operate, and it allows me to wear different hats depending on client needs. Sometimes I am the M&A specialist; at other times I work as an outside general corporate counsel. I also come into contact with a number of wonderful attorneys who focus on more specialized areas of law such as employee benefits, labor, real estate and environmental matters. When I am quarterbacking a corporate transaction, it is very rewarding to coordinate the efforts of the various specialists for the client, who is often taking part in one of the most important events of his or her life — such as buying or selling a business. I derive great satisfaction from playing a part in the great events of my clients’ lives.
What makes a good lawyer?
A good lawyer is a good listener with a skeptical ear. This is not to say that such a lawyer is a “deal-breaker” — it is quite to the contrary. I believe that a good lawyer’s objectivity runs close to skepticism, and when that happens, sound legal advice can be provided to the client.
A good lawyer will help the client work through all the aspects — good and bad — of a transaction. This is an invaluable service to a client if due diligence reveals negative information or the negotiation process heads in a direction that is not in the best interests of the client. Fortunately, with respect to the vast majority of the transactions on which I work, the transaction is a positive one for the client, with few surprises, and deals are successfully closed.
What is the biggest legal news right now, and what is its impact?
Obviously, the economic downturn in the U.S. has negatively impacted the deal flow that kept so many corporate lawyers busy during the past few years.
However, due to upcoming changes in some of the accounting rules, specifically, the revised version of Financial Accounting Standards No. 141, there may be an up-tick in deal flow prior to the end of the year. Revised FAS 141 implements an accounting move in favor of fair-value accounting in connection with business combinations so that the financial records of acquirers more accurately reflect the true value of the business being acquired.
In the past, transaction costs such as legal, consulting, banking and other professional fees were treated as part of the purchase price of the transaction. Revised FAS 141 departs from this accounting treatment and requires that the acquired assets and liabilities be recorded at their fair value as of the acquisition date, and transaction costs are to be expensed by the acquirer during the period in which they are incurred. Because the acquirer will no longer be able to capitalize such expenses, revised FAS 141 will make business combinations more expensive to an acquirer’s earnings, thus impacting the acquirer’s bottom line.
Revised FAS 141 will apply prospectively to any business combination closing in a fiscal year beginning on or after Dec. 15, 2008. Accordingly, corporate practitioners may see an increase in deal flow from acquirers trying to close transactions prior to the time that this new rule goes into effect.