Through its “Deal 360: Taking Aim Microsoft’s
M&A Deal Management” initiative, Microsoft
Corporation has—successfully—brought improved
predictability to one of the most unpredictable areas
of corporate law through process improvement.
Mergers and acquisitions tend to be large, important,
unique transactions; many times, budget expectations
go right out the window. By regrouping around classic
project management principles, Associate General
Counsel Keith Dolliver has managed to shine light on
the “dark art” of budgeting for M&A transactions.
“Value has been a focus of Microsoft’s legal
department for several years,” says Dolliver. “We
believe that financial information plus the right
staffing and the right relationships leads to results.”
One such partnership is with the Seattle-based law
firm of Perkins Coie. Business Practice Chair Stewart
Landefeld said Dolliver’s efforts are on trend.
“We have seen a 10-year rise in the quest
for value on the part of our clients,” he
says. “Microsoft leads the way in its real
openness and willingness to consider
Deal 360 was launched in 2009 in an effort to
improve deal predictability, enhance process efficiency
and ensure clear communication. Perkins Coie
partnered with Microsoft to roll out a holistic deal
management approach in two phases. The first phase
consisted of creating an initial deal budget and staffing
plan. Each deal is evaluated according to 26 weighted
factors that typically drive costs in M&A transactions.
Deal complexity is determined based on size, location
and target characteristics. Heavily weighted items
include a target with more than 10 years of operating
history, operating in a highly regulated field and with
more than 100 commercial agreements.
The matrix was Perkins Coie’s idea, Dolliver says.
“We talked about what the cost drivers were, and
incorporated some Microsoft-specific practices that we
thought likely affected legal budgets. But the Perkins
Coie folks figured out how to make it work.
“Formerly, we handled budgeting via conversations
with outside counsel based on how big the target
company was, how many employees it had and so
forth. But that calculation to some degree was just
a finger in the wind. We didn’t write it all down
together, and we weren’t as rigorous as we should have
been about measuring performance against budget,”
Once the size and complexity of the deal are
determined, Perkins Coie prepares an initial
budget and staffing plan for four key work
streams: due diligence, preparation
and negotiation of primary transaction
documents, securities law and corporate
governance advice and preparing
closing documents and closing the
transaction. “By organizing and streamlining
those key work streams, the billing tells you things
about the deal,” Dolliver says.
MICROSOFT CORPORATION & PERKINS COIE | REDMOND,
Disciplined Process Improves Predictability and Diversity on M&A Deals
Left to Right: Keith Dolliver, Stewart Landefeld, Andrew Moore