We've now discussed the writing assignment, compared the three primary memoranda, and explained the simplest of the three: the Survey. Today, we look at the memorandum you're more likely write in a transactional practice, the Advisory Memorandum.
The Advisory Memorandum
You write an Advisory Memorandum based on a few facts, some of which might have happened, many of which might not have happened—but what if? When you have all of the information from the assigning lawyer, you have to answer two questions: What does it mean? How does it affect our client? The Advisory Memorandum differs from the mere reporting in a Survey, because you must also analyze. You begin your Advisory Memorandum with an Introduction.
Start with one or two sentences that quickly explain the situation:
Tag Richey recently nominated six individuals to stand for election as directors by Allied’s common stockholders. This indicates that Richey might try to force Allied to hold an annual meeting or otherwise force an election of directors, which could result in a proxy fight.
Next, form the questions that clarify your starting point for the assigning lawyer:
- How can Richey try to force an election of directors?
- What are the odds he will succeed?
- If he succeeds, how do we prepare for the proxy fight?
The short answers should be succinct, preferably one sentence:
- Richey can:
- sue under §211 of the Delaware General Corporate Law, forcing an annual meeting; or
- obtain written consent from a majority of the stockholders to replace the directors.
- Either would be easy.
- We have a long list of things we can do to avoid or mitigate the impact of a proxy fight, beginning by negotiating with Richey now.
Make your memorandum accessible and easy to navigate for the assigning lawyer—and maybe a client. Without overdoing it, divide your Discussion into headings, using words similar to those used to form your Question(s):
The Two Ways Richey Can Force an Election
If logical, divide the headings into sub-headings:
- Suing under §211 of Delaware General Corporate Law
- Obtaining Written Consent from a Majority of Stockholders
Finish your Advisory Memorandum with the Conclusion, which summarizes your findings, analysis, and suggestions. The Conclusion is considerably longer and far more nuanced than the Short Answers. Include the support for your decisions:
Although Tag Richey can easily force a proxy fight, several factors will probably prevent him from doing so, at least within the narrow time frame the Chancery Court is likely to give him. The most important factor is . . . .
Next week, in Part 5 of the WordRake series How to Write the Perfect Memorandum, we will explore the Issue Memorandum, the quintessential legal memo that presents facts as a story, determines the issues that arise from those facts, and assesses the strength of pursuing or defending the case.