At the Closing

As a transactional lawyer, I occasionally have the chance to attend closings with our clients. Prior to working at a law firm I constantly heard lawyers say that they were “busy with closings” or that they “couldn’t get anything else done until the closing” or even the ubiquitous, “I met him at a closing once.” As such, I was interested in attending a closing to see what they were all about once I began working. I have only been doing this for a short time now, but I have been to plenty of closings by now and can say that they are usually nothing to write home about. A closing in the business and legal sense, as you can imagine, essentially refers to the day that the transaction ends, the documents are signed and exchanged, the money moves and whatever is supposed to happen happens. It may sound exciting, but closings are usually uneventful (which as a lawyer, is just the type of closing you want). What I have discovered is that a lot of time is wasted at closings. People arrive at 9:00 a.m. and wait around for the whole morning for the final documents to be agreed upon, signed by the appropriate people and arrive by email. Minor corrections are made while breakfast is usually served. For the most part, I don’t mind attending closings because it allows me to get out of the office and to meet the people that I have interacted with in the last few days or weeks by phone and email. But even I consider it as a waste of time some days.

From what I understand, closings used to be big events. This is, of course, before the days of .pdf documents and email. The parties to the deal would get together and sign everything and congratulate themselves with big meals and celebrations, dreading what may come their way the next morning, when they get to work on the next deal. Nowadays, however, the parties exchange signed documents by email attachment and get on a conference call on the day of the closing and confirm that they are ready to proceed. There is no need to physically get together, not to mention travel from city to city for a closing. There are occasions when it may be necessary or desirable, but compared to ten to fifteen years ago, it is hardly necessary.

I am attending a closing with our client tomorrow, and yes, it is unnecessary that I be there. I will contribute nothing; yet I am happy to go. The deal closing is a $1.25 billion debt issuance of a major U.S. corporation. I am sure that the food will be good and it will be a pleasure to actually meet the lawyers on the other side, but there is no reason that this deal could not close by phone and email. Nonetheless, I think that we must be careful. Our interactions with each other are already filtered through technology too often that some face time spent with each other couldn’t hurt, even if it is a bit unnecessary.