Problem vs. Solution-Focused Approach in Case Studies at Law Firm Assessment Centres
While good candidates can pick out and describe issues, great candidates go a step further by suggesting practical solutions. In real life, commercial clients pay solicitors not to present more headaches, but to deliver actionable solutions. Here’s how you can adopt a solution-focused approach and some common problems and solutions you might encounter in M&A case studies.
1. How to Adopt a Solution-Focused Approach
Identify and Analyse Objectives - think like the client: Begin by thoroughly understanding the client’s objectives at hand, going past the noise and right to the root. Then, analyse whether the proposed transaction/course of action is an effective way of realising that objective. If yes, that’s great news! If yes, but the proposed transaction/course of action is not legally viable, suggest an alternative that is legally viable and meets the client’s commercial objectives.
Propose Practical Solutions: When developing solutions or alternatives, consider the feasibility, cost-effectiveness, and potential impact of your proposed solutions. Once you’ve got a solution, break it down into next steps - a to-do list that you can actually send to the client and start ticking off. A vague solution is no good!
2. Common Problems and Suggested Solutions in M&A Case Studies
Problem 1: Overvaluation of Target Company
The acquiring company may risk overpaying for the target due to inflated valuations, leading to financial strain and reduced shareholder value.
The solution is to conduct a detailed due diligence process to assess the target’s financial health, market position, and growth potential. If you, as the buyer’s lawyer, find anything during due diligence that is an adverse factor, the client will be able to use it to drive down the purchase price, or if it is an insurmountable red flag, abort the transaction altogether. Consider using multiple valuation methods (depending on the specific circumstances of the target company) to ensure an accurate assessment and negotiate terms that reflect the true value of the target. There are plenty of articles under the Free Resources tab on proper valuation of companies, and our Finance For Lawyers guide is the ultimate guide you’ll need on that topic.
Problem 2: Regulatory and Competition Issues
M&A transactions may face regulatory hurdles or competition concerns, potentially delaying or blocking the deal. Competition law, also known as antitrust law in the United States, is designed to promote and maintain market competition by regulating anti-competitive conduct by companies. The primary goal of these laws is to protect consumers and ensure fair competition in the marketplace.
The solution is to engage with regulatory authorities early in the process to understand potential concerns and requirements. Develop a strategy to address these issues, such as proposing divestitures or behavioural remedies to alleviate competition concerns. Here’s a detailed article on common problems under competition law in the context of M&A case studies, and solutions you can propose.
Problem 3: Talent & Key Employee Retention
Key employees may leave the company due to uncertainty or dissatisfaction post-merger, leading to a loss of critical skills and knowledge. Relevant for most target companies but especially for roles requiring high degrees of innovation, such as tech executives.
The solution is to implement retention incentives, such as bonuses, stock options, and career development opportunities, to encourage key employees to stay. Communicate transparently about the merger’s benefits and future opportunities to build trust and engagement. Here’s a detailed article on how to structure and negotiate remuneration & incentive packages.
Problem 4: Integration Challenges
Integrating operations, systems, and processes post-merger can be complex and disruptive, affecting business continuity.
A potential solution is to establish a dedicated integration task force, led by continuous employee feedback through multi-faceted channels, to oversee the process. Develop a detailed integration plan with clear timelines, responsibilities, and milestones, with project managers to drive the change if necessary. Regularly review progress and adjust the plan as needed to ensure a smooth transition.
Problem 5: Cultural Misalignment
Cultural differences between the merging companies can lead to employee dissatisfaction, reduced productivity, and integration challenges.
A potential solution is to develop a comprehensive cultural integration plan that includes workshops, team-building activities, and open forums for communication. Encourage collaboration and understanding between employees from both companies to foster a unified culture.
