--- title: "What Opposing Counsel's Redlines Tell You" description: "Alex Lubyansky on reading the other side's attorney: which redlines are substance, which are noise, and what a re-raised point really signals." canonical: "https://acquisitionstars.com/perspectives/opposing-counsel-red-flags" author: "Alex Lubyansky" firm: "Acquisition Stars" practice: "M&A and securities law" office: "Novi, Michigan (serves clients nationwide)" contact: "consult@acquisitionstars.com | 248-266-2790" --- # What Opposing Counsel's Redlines Tell You You do not need to be a lawyer to see when a redline has crossed from substance into noise. In my experience, the real test is not how many rounds a document goes through. It is whether there is an actual purpose behind every mark, and whether the points still being fought over are new or are the same points settled two rounds ago. Most people assume that a heavily marked-up document means the deal is in trouble. That is not quite right. A document can come back with substantial changes and still be a healthy sign, because the marks are focused on the parts of the deal that actually carry risk. The problem is not volume. The problem is when the volume has no purpose behind it. I tell clients there is a fast, non-legal scan you can run yourself before your attorney even opens the document. Look at the page. If the entire thing has come back red, that is visible before anyone reads a single comment. It is the same signal as getting a paper back from a teacher with every line marked: either it was a genuinely rough draft, or the person marking it up is not the right match for the assignment. > "When the other side returns a redlined definitive, you don't need to be an attorney to scan the document and see whether it's signal or noise. If the entire document is now red, you can see it visually. The quick scan is whether these are actually important points or whether this is grammatical nitpicking for the sake of grammatical nitpicking. The latter is a pretty big red flag pretty quickly. In a good transaction, the redlining focuses on risk allocation, earnouts, exclusivity. The structural points that matter to the client on either side. That's fair. That's fine." The line I draw for clients is between structure and style. Risk allocation, earnouts, exclusivity, indemnification caps and baskets, working capital mechanics. Those are structural. Fighting over them is normal, sometimes prolonged, and worth the time it takes. Grammatical nitpicking, reformatting, and rewording a clause that already says the same thing is style. Style fights do not protect anyone. They just add rounds. > "There's a very quick scan that needs to happen: are these actually important points, or is this simply a grammatical nitpick for the sake of a grammatical nitpick. If it is, that's a pretty big red flag pretty quickly." ## The re-raised point There is a specific tell I watch for that is separate from redline volume: a point that already seemed settled shows back up two or three rounds later, as if the earlier conversation never happened. When that occurs, there are only two real explanations. Either the attorney on the other side genuinely lost track of what was agreed, or the re-raise is a way to extend the negotiation and keep billing against it. From where I sit, it does not matter much which explanation is true. The practical effect on the client's timeline and patience is the same either way, and it is worth naming out loud rather than absorbing quietly. ## Where this shows up most in practice: working capital The single most common place I see nitpick-versus-substance friction play out is the working capital true-up. A seller agrees to a working capital target early, often in the letter of intent, before fully grasping what the number represents or how it will actually be calculated at closing. A sophisticated buyer, particularly private equity or an institutional acquirer, pushes for a rigorous true-up mechanism. When the real calculation lands, the seller can experience what feels like a sudden reversal of something they thought was already resolved. That moment of confronting the actual number, after having mentally settled on a different one, is where a lot of late-stage redlining tension originates. It is not usually anyone acting in bad faith. It is a gap between an early, loosely understood figure and a precise, contractually enforceable one. > "The longer a deal drags, the worse it gets. Deal fatigue is real. Even when both parties agreed to something early on, if dates slip and deadlines slip, human nature takes over. At some point one side goes back to the internal drawing board and decides they don't want to be part of it anymore. I usually find this to be symptomatic of a poor process on the front end. Not malice. Not negative intent. Not someone running up fees. Just poor alignment, poor qualification, poor structuring at the start of the engagement. Once that's the foundation, every missed date compounds. The fix isn't more negotiation in the middle. The fix is doing better qualification before the deal team is even hired." That is why I do not treat redline friction as an isolated event. It compounds. A nitpick-heavy round adds a week. A re-raised point adds another round. A working capital dispute that surfaces late adds a stalled stretch where nobody wants to move first. None of those individually kills a deal. Stacked together, over a process that started without clear qualification and alignment on the front end, they are exactly the kind of drag that produces deal fatigue and, eventually, a party who quietly decides they no longer want to be part of it. ## If you are the buyer Watch for the visual signal before you read the substance. If your target's counsel returns a document with marks scattered across every page, ask your own attorney to sort structural changes from stylistic ones before you react to the volume. If a point you thought was resolved reappears, do not simply re-argue it. Ask your counsel to note it as a pattern, not an isolated event, so you can see whether it is one stray moment or a sign that the process needs a firmer hand. On working capital specifically, push for a clearly defined true-up mechanism as early as the letter of intent stage, not as an afterthought at the purchase agreement, so the number you agree to early is the number that actually holds at closing. ## If you are the seller Understand what you are actually agreeing to when you accept a working capital target in the letter of intent. A number that sounds reasonable in principle can look very different once a rigorous true-up calculation is applied against it. Ask your counsel to walk through the mechanics before you sign, not after the buyer's accountants have already run the numbers. If you find yourself facing nitpick-heavy redlines from the other side, resist the instinct to match tone for tone. A calm, structural response usually moves the deal forward faster than an equally granular counter-response. ## Where the standard guide differs Our [guide to due diligence mistakes that kill deals](https://acquisitionstars.com/blog/due-diligence-mistakes-that-kill-deals) covers your own diligence process: what to verify, what to review, and where buyers most often fall short before closing. This page is a different diagnostic. It is about reading the signals coming from the other side's counsel during negotiation, after diligence is already underway, so you can tell the difference between a legitimate fight and friction that serves no one. ## Frequently Asked Questions ### How can I tell if opposing counsel's redlines are legitimate or just running up fees? Look at what the marks are actually protecting. Risk allocation, earnouts, exclusivity, and indemnification are legitimate fights and worth the time they take. Grammatical nitpicking, formatting changes, and stylistic preferences dressed up as legal issues are not. You do not need a law degree to tell the difference. If the entire returned document is marked red, that alone is a signal worth noticing before you read a single comment. ### What does it mean when opposing counsel re-raises a point that seemed settled? It usually means one of two things: the other attorney lost track of what was already agreed, or the re-raise is a way to keep the negotiation going and keep the clock running. In my experience, either explanation is worth flagging to your own counsel, because the practical effect on your timeline is the same either way. ### Why do working capital disputes so often turn into fights over redlines? A working capital target gets agreed to early, often in the letter of intent, before either side has fully worked through what the number actually means. When a sophisticated buyer later pushes a rigorous true-up calculation, the seller can face what feels like a sudden reversal on something they thought was settled. That gap between the early number and the real calculation is where a lot of late-stage redlining friction comes from. ### Does a difficult opposing counsel mean the deal is more likely to fall apart? Not by itself, but it raises the stakes on process. Friction that traces back to a genuine point of risk allocation is normal and survivable. Friction that traces back to poor qualification or poor alignment at the front end compounds over time and adds to deal fatigue. The earlier your own counsel can tell you which kind you are dealing with, the better positioned you are to respond. ### Negotiating Against Counsel That Won't Move? Alex Lubyansky leads every engagement, reviews every document, and leads negotiation and closing, with an associate supporting the work. Tell us where your deal stands. ### Request Engagement Assessment Tell us about your deal. We review every submission and respond within one business day. --- Source: https://acquisitionstars.com/perspectives/opposing-counsel-red-flags Markdown version generated for machine readers. Canonical HTML at the source URL.