5 tips for In-house Counsels Leading Restructuring Projects
Surely, internal legal restructuring projects can’t be as complicated as an M&A deal. Or... can they?
While an M&A deal is fraught with complexities, restructuring projects (large or small) pose their own set of challenges to be successfully managed.
Many in-house legal teams will be tasked with leading the delivery of these projects. And yet, the most difficult issues are often nothing to do with their legal complexities.
Below are a 5 things to consider when embarking on your restructuring project.
1. Is everyone aligned?
This sounds obvious, but the benefits and costs of legal restructuring vary across different parts of any business. For example, let’s consider a project to reduce the number of legal entities within a corporate structure. Such a project could deliver risk mitigation and cost savings across statutory compliance and audit for tax, finance and company secretarial. However, it will also require significant inputs and work from various business areas who won’t see material tangible benefits and may even bear costs on implementation.
Spending time to ensure all key stakeholders are ‘bought in’ upfront will make it easier to successfully and efficiently manage issues as they arise during planning and implementation. Things to consider when getting buy in, include:
the overall aim and rationale
the benefits
the costs (including on which budget they will sit)
2. Does everyone know what they have to do?
A senior level governance board with representation from key stakeholder groups will make the type of alignment described above sustainable.
The governance board can also provide approvals, budgets and objective oversight for plans prepared by the project lead. Similarly, it acts as a mechanism to escalate issues and ensure that all teams are pulling in the same direction.
Implementing a governance board like this provides the project team with clarity on who’s doing what and when. Something which is particularly vital on projects where people are contributing alongside their regular workloads.
Crafty Counsels’ M&A Day in April 2024
3. Are you joined up with legal, finance, tax and other subject matter experts?
Even though it’s an internal restructure, the changes to legal structures, shareholdings and the potential movement of assets and people will have implications across your business.
Whether in house or from external advisors, your restructure will need subject matter experts ready. Collaborating with experts on an execution plan is recommended, as it reconciles the often competing rules and risks across legal, accounting, tax (including transfer pricing), IP, employees, pension and other areas.
4. Do you have a fit for purpose due diligence process?
The due diligence process on an internal restructuring needs to be carefully thought out. As with the above, lean on your subject matter experts to consider the relevant due diligence.
In your process, it’s important to balance getting the information needed to avoid nasty surprises, whilst not requiring the team to collate mountains of information just for the sake of it.
At the outset, set out a clear process, which is agreed with all relevant stakeholders and identifies:
What information is needed?
How are you going to get that information?
Whose input and ‘sign off’ is required?
5. Do you have the right project management?
Project management goes beyond making sure everyone does what they need to do. It encompasses stakeholder engagement and alignment, planning, communications, risk mitigation and status reporting needed to deliver the project in a way that realises the benefits.
Good project managers will roll their sleeves up to work across the whole project team wherever needed. They will address material issues, dependencies and capacity gaps impacting the project’s critical path.
The Complete Projects Team: comprised of highly experienced lawyers and project managers
Internal restructuring projects, as with all projects, will face a variety of complex factors at the outset and challenges along the way. Reach out to Complete Projects anytime for a chat or for help mobilising, planning and successfully delivering yours.
ABOUT THE AUTHOR
Keith is the legal Structuring and Governance lead at Complete Projects. He is a UK qualified corporate and restructuring lawyer and a governance specialist with over 20 years of international experience. He has successfully delivered projects across various sectors, with a particular focus on international energy. Prior to joining Complete Projects, Keith was a leader in PwC's international legal restructuring and governance team and led the Energy legal team in the UK.