How checklists for legal opinions can improve quality and reduce costs
“You didn't check the by-laws!” exclaims Andy in exasperation to a junior associate at an AmLaw 100 firm. Andy, a capital markets partner, has just been pulled out of a meeting on a new deal to fix a corporate authority problem on another deal that is supposed to close tomorrow. The problem, which was missed by Andy's team, has been belatedly raised by underwriters' counsel at the pre-closing for a $200 million SEC-registered bond issue by Andy's corporate client. The company's by-laws contain an unusual provision, inserted years ago by its recently retired founder, requiring a super-majority board vote for any borrowing exceeding $20 million. The company had not borrowed in many years. As it turns out, the telephonic meeting to authorize the bond issue was attended by only a bare majority of the board.