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Considering a career in cross-border mergers and acquisitions?
Wise move. Aside from the possibilities and progression this pathway promises, cross-border M&As offer variety – on a global scale.
You’ll navigate cultures, contexts, codes and creeds. And straddle different legal systems, industries, and perspectives.
We sat down with Raphael Tay, College of Law Teaching Fellow, to explore the state of cross-border M&As. What impact has COVID-19 had? What skills – hard and soft – do junior and intermediate lawyers need to succeed? And what do orchestras have to do with any of it?
Rooms and regionalisation: the legacy of COVID-19
It’s been two-and-a-half years since the pandemic imposed a new reality on the world. But what impact has it had on cross-border M&As – and are things finally back to ‘normal’?
Yes – and no.
It’s business as usual in terms of the investments and acquisitions, and in the amount of activity and deals. But in the way you handle M&As – and the expectations of your clients and counterparties – there’s been a seismic shift.
Since the COVID-19 outbreak, virtual data rooms have come to the forefront of the due diligence process.
These online spaces, through securely storing and sharing documents, aid the due diligence process. And, while not used as prevalently pre-pandemic due to the accessibility of physical data rooms and onsite visits, they’re now an instrumental part of the cross-border M&A lifecycle.
Post-pandemic – even with borders having opened up, and trade activities and businesses resumed – virtual data rooms remain the primary method of storing and sharing due diligence documents. (As opposed to physical data rooms and onsite visits.)
COVID-19 disrupted the world’s supply chains – making it harder to source, transport and distribute goods. So global trade began to take on a different shape.
Before the pandemic, we all talked about globalisation. Now, we’re talking about regionalisation: the expansion of trade within regions. We’re seeing an increase in neighbouring countries trading with each other, rather than with those halfway around the world.
So – what kind of opportunities does this regionalisation present for junior and intermediate lawyers looking to build a career in cross-border M&As?
Well, in Asia, many large multi-national companies – particularly American ones – are divesting: selling off portions of their business lines.
The buyers? Regional players.
As COVID-19 continues to tear the fabric of global trade along new – and increasingly regional – seams, regional M&A activity will also increase. Meaning the services of effective cross-border M&A lawyers will continue to be in high demand.
“Australia is, from a geographical perspective, on the doorstep of Asia,” says Raphael. “So as a young Australian lawyer, the world really is your oyster.”
Our top tips for thriving in cross-border M&As are:
Opportunities, minefields, and the hard skills you’ll need
The key to unlocking success in the field of cross-border M&As? Upskilling.
Cross-border M&As come with more than their fair share of moving parts. Understanding and applying the nuances of project management is critical; as is a healthy respect for deadlines, and an ability to collaborate with a range of institutions and regulatory authorities.
Reading widely is vital, too. You’ll need to understand how business is evolving, as well as broader issues around manufacturing and logistics. This makes knowledge of multiple industries – and, from a legal perspective, their unique challenges – crucial.
Cross-border M&A practice isn’t just about having a ‘business brain’, though. Nor is it solely about possessing a ‘head for figures’, or geopolitical nous alone.
Rather, it involves understanding different cultures and customs, and their unique eccentricities and idiosyncrasies. (‘Shortly’ or ‘soon’ could mean anything from five minutes to five days, depending on the context!)
Lawyers in different jurisdictions do things differently, so you’ll need to remain conscious of that. And understand that the world’s wide variety of societies and cultures move at different paces.
“Australian lawyers entering cross-border M&As,” Raphael says, “need to be sensitive to Asian values and attitudes; to the cultural context of the continent. There are lots of opportunities, but many minefields as well.”
So start upskilling now. And not in a solely technical sense, either.
Because the most important skill you’ll need to thrive in cross-border M&A? Empathy.
Soft skills and string instruments: the melody of M&As
In cross-border M&As, sensitivity, empathy, and cultural understanding are all vital.
You’ll need a head for juggling the (often conflicting) demands of clients and counterparties, and a knack for negotiation. You’ll also need a flair for future-telling. And the ability to identify potential issues – before they happen.
Ten years ago, for example, most M&As were in the manufacturing sector. Companies were targeting physical modes of production, such as factories and machinery – hard assets.
Now, it’s the opposite. In recent years, acquisitions are centring increasingly on intellectual property. Businesses aren’t so much seeking to acquire property or plants, but people – specifically, the knowledge and skills they possess.
As a lawyer entering the field of cross-border M&As, you need to understand this wider landscape. Because, with a grasp of current events, business trends, and the post-pandemic state of play, you’ll be better able to structure your cross-border M&A deal. To recognise and remain conscious of the pitfalls. And know which experts to bring in – when.
All this requires a deft, dynamic blend of skills. Raphael elaborates, drawing some particularly poetic parallels.
“Before you can become the conductor of an orchestra, you must understand music. You need to understand the instruments that make up your orchestra: the wind, the pipes, the drums, the strings. Unless you understand these different specialisations, you’ll be unable to pull them all together to produce a melodious sound.
“Cross-border M&A is like this. It involves a range of skills and disciplines. Litigation, intellectual property, compliance, due diligence… there’s a whole assortment of aspects you need to get across.
“To be a good M&A lawyer – to be the conductor of that orchestra – you need to learn every single instrument.”
Got what it takes to forge a cross-border career?
With our cross-border mergers and acquisitions subject, you’ll develop the foundational skills you’ll need for M&A work. And an understanding of how to apply and adapt them in different contexts and cultures.