Build a buy-side or sell-side legal due-diligence issues list
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- From the data-room documents the lawyer supplies, list each issue with the document, the clause or page, and the question it raises. Do not grade the risk and do not write the advice that is sent to the client or the board.
- What the lawyer must review
- There is no single federal statute that sets the contents of a private-company legal due-diligence review. The issues list is the lawyer's work. ABA Model Rule 1.1 requires a lawyer to provide competent representation. ABA Model Rule 1.6(a) provides that a lawyer shall not reveal information relating to the representation unless the client gives informed consent, the disclosure is impliedly authorized, or paragraph (b) permits it. ABA Formal Opinion 512 (29 July 2024) requires the lawyer to understand the tool well enough to use it competently and to remain responsible for the output. The lawyer checks the deal documents, the entity's state of organization, and any regulator that actually applies to the counterparty. The tool does not clear a sanctions list.
- Written for / version
- United States versionUSCth
Who does what
| Role | What they do |
|---|---|
| Assistance | Potential support includes preparing preliminary structure or wording. Confirm the tool’s capability and permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Verify the applicable jurisdiction and the version of each relevant law, rule or instrument in force at the material time.
- Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
- Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.