Are We There Yet? - Closing Lists Show the Progress
Are we there yet? Anyone who has ever been involved in a transactional deal of any complexity has udoubtedly at least thought, if not uttered, this well worn phrase in frustration as yet another obstacle arises to the successful completion of the contemplated transaction.
Even sophisticated clients are sometimes frustrated by how long it seems to take lawyers to "close" and complete a transaction. Clients with less experience can become positively apoletic about the fact that it takes more than a week or so for the lawyers to declare the deal done and finished. Frankly, as one of the lawyers at the center of these trabsactions, I too am occasionally surprised how long it can take in certain situations to successfully complete the transactions.
So why does it take so long, and perhaps more importantly, how can everyone in the deal know how close we are to being able to answer yes to the perennial question "are we there yet? One of the best tools to understand both what's involved in getting a particular transaction completed AND, on a real time basis what's left to do is a CLOSING LIST. Every transactional attorney uses some variation of a Closing List to keep track of which tasks and items have been completed, which are still in process, and which issues and tasks still need to be addressed.
A Closing List for a loan transaction (Click here and here and here for examples) necessarily differs somewhat from a Closing list for a purchase/sale of a business or other transaction (click here and here for examples), both share the same basic elements and utility. When I do my Closing List, I always start by putting the contact information for all the parties and their attorneys and other important agents and representatives at the top of the first page. This way I'm never searching for a phone number or e-mail at a crucial point in negotiations.
The rest of the Closing List is generally in the format of a table. My tables have visible grid lines so I can easily see each discrete item or task. I usually have five columns:
- Item Number (for quick reference and efficient organization of various folders pertaining to the deal)
- Name of Item or Task (for obvious reasons)
- Responsibility (i.e. which party is primarily responsible for preparing the documentation or completing the task)
- Status (entries in this column are constantly changing as progress occurs)
- Comment (for additional useful information such as actual or potential obstacles to be resolved, other contact people, etc,)
Because every deal is different, most closing lists are organic instruments which begin with certain basic items and tasks common to that sort of particular transaction and then initally grow longer as the unique aspects of the deal at hand become fleshed out. Like other transactional attorneys, building out the Closing List helps me organize what needs to be done and the order in which tasks and items should be attacked.
I usually wait to give clients a copy of the Closing List until I am fairly certain it is a reasonably complete reflection of what will be entailed to make the contemplated transaction a reality in a manner that properly protects my client. After circulating the intial Closing List, I try to provide updated revised Closing Lists on a regular basis which show where progress has been made and where we may have run into a roadblock or detour that may delay completion of the transaction.
My hope and intention is that sharing these updated Closing Lists will allow clients to have as close to the same understanding as I do about "where we are" as far as getting the deal done and why we're not there yet. Thus, if your attorney gives you something of this nature, don't just put it aside and assume it has no purpose relevant to you. It's your best guide to what's been done so far to bring the deal to fruition and what still remians to make it a reality.
