Robert V. Boeshaar
ATTORNEY AT LAW | LL.M., PLLC
206.623.0063 | boeshaarlaw.com
1000 Second Avenue, Suite 3000 | Seattle, WA 98104
Masters of Laws (LL.M.) in Taxation
Over 14 years experience with the IRS Office of Chief Counsel
I help individuals and businesses
find the best resolution to their
disputes with the IRS.
• Auditing tools to track and retrieve
Legacy Data Rooms
Many companies already have a virtual
data room for sharing and managing
documents internally. Whenever there’s
a legacy data room, there’s often pressure
to re-purpose it as the deal data room.
The better practice is to maintain a
deal data room that is separate from a
company’s day-to-day operating data
room. A deal data room will contain
highly sensitive documents — board de-
liberations, employment agreements,
option grants, confidential settlement
agreements, and other documents re-
quiring confidential treatment. A deal
data room should also have tighter
administrative controls to protect its
integrity and organization.
The extra cost of maintaining separate data rooms can be a tough sell, but
it’s often the better approach.
Data Room Organization
A data room should be organized so that
any intelligent lawyer or investment
banker can find any company document
he or she needs.
A detailed data room organization
chart, prepared in conjunction with this
article, can be found on the WSBA’s
Corporate Counsel Section webpage.
See “Organizing Your Company’s Data
Room” under the “Educational Materials”
tab at www.wsba.org/legal-community/
Counsel who have never closed a financing or M&A deal should also first
study a “due diligence request list” from
a large deal to appreciate the range of
documents needing a home in the data
room. Templates can be found online or,
better yet, obtained from your favorite
Caveat: most due diligence request
lists are overbroad and include requests that are not relevant for every
company. Companies respond to irrelevant requests with a simple “N/A.” A
data room likewise should not contain
Populating a Data Room
Once you have organized the data room,
it’s time to begin uploading documents.
The sample data room org chart referenced above (Organizing Your Company’s Data Room) will be very helpful
in identifying the documents you need
to upload. Use clear and consistent
document naming conventions so documents alphabetize correctly and are
Once the easily located documents
have been uploaded, the process will become more like a scavenger hunt. Many
missing documents can be tracked down
with the help of company insiders. Others can be created or recreated with a
little legal ingenuity and elbow grease.
Finding and Fixing More Serious
With most small and medium-sized
companies, you will eventually encounter more serious challenges: gaps reflecting weaknesses in governance and
business processes and controls. Every
company has its issues and this process
will definitely uncover them. Counsel
should help prioritize fixes without being alarmist.