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AHLA's Speaking of Health Law
Beyond Paperwork: Practical Insights for Navigating Fair Market Value and Health Care Transactions
How can attorneys better navigate the business realities behind health care transactions, manage compliance pressures, and work with valuation experts in a practical way? Rob Holland, Director, HMS Valuation Partners, speaks with Eric Neff, President, Neff Associates, Ragini Acharya, Partner, Husch Blackwell, and Kyle Faget, Partner, Foley & Lardner, about their “behind the scenes” experiences with fair market value and health care transactions and the tips and strategies they have learned along the way. Sponsored by HMS Valuation Partners.
Watch this episode: https://www.youtube.com/watch?v=_yRcF_Ef1rw
Learn more about HMS Valuation Partners: https://hmsvalue.com/
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SPEAKER_05:Welcome to today's AHLA Speaking of Health Law Podcast. I'm Rob Holland, Director with HMS Valuation Partners, and I'll be your moderator today. Today's episode is titled Beyond the Paperwork: Practical Insights for Navigating Fair Market Value and Healthcare Transactions. We'll be talking about how attorneys can better navigate the business realities behind healthcare transactions, manage compliance pressures, and work with valuation experts in a practical way. We have three fantastic guests with us today, so let's kick things off with introductions. Would each of you share a bit of your background and highlight the areas of health law you work in? Eric, let's begin with you.
SPEAKER_04:Okay. Thanks, Rob. I appreciate it. I uh started practicing in 1992, uh specializing healthcare in 93, uh, starting in private practice and then uh most of my career in-house. Uh I was at uh Penn Medicine in Philadelphia for 18 years or so. That was where I spent most of my time and did most of the sort of larger transactions for the system. Uh, and I've been in private practice now under NEF Health Law for the last four years in Connecticut.
SPEAKER_05:Very good. Thanks, Eric. Let's go to Ragani. Why don't you go next?
SPEAKER_02:Hi, I'm Ragani Acharya. I am a partner at Hush Blackwell in the healthcare regulatory group. I do a lot of healthcare transactions and the associated regulatory work along with those transactions and transactions involving um not just MA, but also strategic partnerships, uh collaborations, affiliations. Um I've been working in this space for 11 years now. Um and yeah, I've been at a firm um in the in the big firm life uh for the last 11 years and um learned a lot of really cool lessons, and I'm excited to share some of those today.
SPEAKER_05:Very good, very good. And finally, last but not least, Kyle, why don't you share a little bit about yourself?
SPEAKER_03:Thank you so much. Hi, Kyle Fajey. Thanks for having me. I'm a partner in the Boston office at Fully and Larner. And I sort of straddle the life science and healthcare world both. So I do quite a bit of um research and development, collaboration, clinical trial, and then commercialization and compliance building and scaling for life science companies. And then I kind of do the same thing on the other side of the house, the provider side of the house, in particular, um helping building and scaling telemedicine companies to into 50 state offerings. So um, you know, friendly PC structure, corporate practice of medicine, all those sort of healthcare specific considerations.
SPEAKER_05:Very good, very good. Well, thank you all for uh being on the show today. And uh let's get started. Let's start with the idea of uh getting your hands dirty or you know, really engaging in the business dynamics behind a deal. Um, Eric, when you think about how attorneys can maybe add value beyond just drafting documents and you know passing them back and forth between the parties, what is what does that look like uh for you and your practice?
SPEAKER_04:Yeah, so I I would say uh in my experience, a lot of particularly younger lawyers um have a misconception about transactional lawyering that I've often referred to as Ivory Tower lawyering, which by which I mean uh I will sit here in my ivory tower, and when you have an issue, you come to me, I'll sort of pronounce judgment on it, you take it back to your business, and that's how we'll interact. And um I I actually so I think that level of passivity might work in some context, maybe in litigation, where you know, it's sort of a pleadings type practice. In transactional lawyering, it's it's really just bad lawyering. And if you think about it, the the main reason is I I think you know, transaction, one of the great things about transactional lawyering is you're um you're you're always working on something that's positive for your client. Not always, but you know, you're you're you're you're working on a growth part of the business. Maybe it's an acquisition, maybe you're you're just you know doing a new telecommunications contract and it's about cost savings, but it's usually an opportunity for the client. And their primary uh their their primary thing that they want to accomplish is to get it done. Um they want to not get in trouble too. So I'm I'm not sort of minimizing fraud abuse and other regulatory issues, but they want to get the deal done. And and that's really, I think, you know, lawyers need to take that on as their role. Uh when when I was a young lawyer, my first in-house position, I had um the president of the division that I worked for at Novacare uh in King of Project, Pennsylvania, took me down to his office. He was really struggling with me. And he said to me, uh, Eric, I don't need a lawyer. I need a business partner with legal skills. And that was really one of the great aha moments in my career. I I had not understood that before that moment. And it really has changed my whole approach. And I I've sort of bandied about this, you know, this metaphor of the tennis player lawyer who hits the ball over the net and then waits for the other side to hit it back, and the hunter lawyer who uh chases it down until it's dead. Uh and uh what I would say is you want to cultivate a reputation for being a hunter because clients who see that will seek you out. And clients that see that you're passive about doing transactional work and you're just sort of pushing documents, they'll see that too. And that will reflect on the success of your practice.
SPEAKER_05:Very good, very good. Uh Ragani, from your perspective, you're often in the middle of these negotiations, structuring the governance and working on the joint ventures. How do you balance legal precision with helping the clients uh move the deals forward efficiently?
SPEAKER_02:I think that's a that's a really good question. And I kind of want to echo a lot of what Eric said. Um, audience can't see this, but I'm wearing my tennis racket necklace, actually. And hope nobody will judge me for it as a tennis player. But I think he may it makes a lot of sense to say that yeah, you don't want to just be in a situation where you're volleying drops back and forth. Um, and a in a way to make sure that that doesn't happen in my experience is to I kind of set a few roles. One is um be effective and efficient about communications. And so what that means is know who has what roles and who's supposed to be communicating about what when it comes to a transaction. Um, make sure those channels are clear. Um, you're not asking questions about, you know, decision making that somebody is not in the role to be answering questions about that. Um the lawyers can kind of help facilitate those conversations and figuring out who should be um answering questions. And I think it's really important for the lawyers to make sure that the business teams know who those people are. And in that same vein, it's really important also to understand who the stakeholders are. Um and, you know, it's not just always going to be the folks in the C-suite that have an interest in making sure a transaction goes through and what um what the result is at the end of the day. You know, there's employees, there are um clinical staff, you know, the the list can really go on. Um, so it's not just your your owners or your C-suite folks. Um and so in understanding who the stakeholders are, that can help you understand where flexibility can be built. And if there's flexibility, that can also create efficiencies. Um my third role is to set timelines and milestones. Um, you know, you know you have to um accomplish certain things in in in the process of a transaction, you know, certain documentation, certain filings, and knowing those up front is really important so that you don't lag behind in making certain decisions while other things are kind of sitting out there. So um kind of keeping these three things in mind, I think those have always been helpful in helping to create those types of efficiencies. And, you know, while we're always really concerned about making sure every I is dotted and T is crossed, um, knowing what's important and where to focus your energy, um, keeping these kind of rules in mind will help move that along.
SPEAKER_05:Very good, very good. And Kyle, from your experience under a corporate integrity agreement, you've seen how maybe being too reactive can create risk. How do you stay proactive in your approach to compliance and deal making?
SPEAKER_03:Yes, that's a good question. I mean, and I think this is what makes, of course, healthcare transactions a bit different than other types of transactions. You're in such a heavily regulated space. And often in diligence, you end up uncovering issues, like say you're looking to acquire and you're doing diligence on a target. And you really have to understand what's your what's your client's risk tolerance. And similarly, when you're advising a client that maybe preparing to be acquired or to acquire, um, I think it's really understanding the risk. Like there's, you know, don't let good be the enemy of perfect kind of thing that uh, you know, you can you can really get caught up in the weeds and try to have everything be absolutely perfect, but in the process of doing that, you're gonna grind a business to a complete and utter halt. So kind of understanding where there is some gray and being able to communicate that effectively with clients and help them understand, okay, if this, if this decision um doesn't pan out or goes south, like what are the consequences? And though it could be legal consequences and there could be business consequences, sometimes both. And being able to parse those out for clients, I think is really important.
SPEAKER_05:Very good. And I'll just open this up for for any of you guys. Where do you see attorneys adding the most value when you take on a more hands-on role? Where do you or maybe even where do you see maybe missed opportunities when counsel remains too distant, you know, from the business discussion?
SPEAKER_02:I think there's a lot of um value to be given um in using prior experiences. Um I think that sometimes, I think to Eric's point, a lot of maybe younger attorneys um view a lot of things in a silo. And it's helpful to to maybe think about, you know, anecdotal evidence of where things have gone right, where things have gone wrong in past um past transactions or collaborations and um kind of be able to use that experience on a going forward basis.
SPEAKER_04:Yeah, I'll I'll I'll just underscore one thing Rogani just said. It's you know, when you think about building experience, it's not something you do overnight. And I I have this mental image of how the internet grew, you know, from the from the 90s till till now with little tendrils going out and creating connections. And I think that's a good model for what you need to do, just over time um create a fund of knowledge for yourself and build a web of knowledge so that when issues come up in transactions, you have something to draw from that's relevant. And it's amazing how, you know, in a few years and after doing a a number of deals, you'll start to make connections between this deal and the deal you did three years ago. And and it's very helpful, not only for you in terms of efficiency, but for your client and occasionally just having a you know, aha, oh wow, we could maybe that's a good idea.
SPEAKER_05:Very good. And and kind of follow up on that point, a lot of these transactions and everything, it's very complex and there's a lot of high stakes involved in these types of decisions. I imagine oftentimes clients get they hesitate or they get stuck in analysis paralysis type uh mindsets. How do you help guide them towards clarity and taking confident action while staying, you know, firmly within your role as legal counsel?
SPEAKER_03:A lot of times it's helping assess risk, right? Like I think that if you overanalyze, you'll there's risk everywhere, right? Then understanding what what is risk that can be minimized, what is risk that you may have to just uncomfortably move forward with if you want a deal to move forward. Um, and helping be a thought partner in that exercise, I think, is really important.
SPEAKER_04:I I think you'll often be called upon as a thought leader in a lot of transactions. Uh, you know, and for a lot of clients, especially smaller and mid-sized clients, they're not doing this kind of stuff every day if it's an acquisition or uh even a lot of contracts. And so they don't necessarily know what all the steps in the process. And so being a leader without being pushy, but being a leader, maybe a little pushy, um, and you know, saying this is what we need to do to get from point A to point B can be enormously helpful in getting them through that paralysis that they might feel from just not having done it before.
SPEAKER_05:Very good. Okay, very good. Uh, let's let's turn to another uh important skill. Uh that is understanding the client's business. I mean, in healthcare, legal decisions often depend you know heavily on operational or financial and uh regulatory context involved with the transaction. So, Eric, how do you approach maybe learning the operational financial details behind your client's organization?
SPEAKER_04:Yeah, I uh and also not just the organization, but just how the healthcare system works in general. I I I think you know, I would sort of sum it up in two words. It's really about intellectual curiosity. Um, you know, making, you know, taking the time to ask your client questions about how something in the practice works, taking the time to Google something you don't understand in a document or in a regulation, sort of some, you know, something that you read in a Medicare rule that you didn't quite get. Um it's so important. And and one piece of advice I would give that has served me very, very well, but maybe difficult for some people. I'd be interested actually to hear what Rodney has to say about this is uh um because I I work in in the environment I work on, it's in it's relatively easy to say to a client, by the way, I'm not gonna charge you for the next you know five or 10 minutes, okay? But I want to know facts about your business. And I've never had a client that I can think of be sort of irritated by that. They're always delighted that you want to learn. But, you know, I think you need to sort of be explicit that they're not, you're you're off the clock for a little while. Now, I think that might be a bit of a challenge sometimes if you're in a firm and there might be, you know, there's pressures to bill a certain number of hours, and maybe you work for a partner is not, you know, is open to that. But I I have found that some of the best conversations I've ever had and the best learning I've ever had is chatting with a CEO for you know 10 minutes about some aspect of their business. And again, it's incremental. Over time, um, you really build up a big fund of knowledge. But if you don't, if you're not the kind of person that has that type of person, uh that that type of curiosity, um, it's gonna be more of a struggle, I think.
SPEAKER_02:I I have to agree with that, Eric. Um, and I think that's a really good point. But, you know, your comment about, you know, I'm not gonna charge you for the next five, 10 minutes, think of it as I think it's really important to think of that time. You're investing in your own career by asking those questions and gaining that knowledge. So that's something an attorney can really, you know, yeah, you're not charging a client, but you're you're adding value to your own um, to your own knowledge base and and to your own career down the line. So it's really worth it to understand those questions.
SPEAKER_03:I totally agree with that. I think that it makes a ton of sense. And um, you have to invest in your client, you have to be interested in your client, or they'll move on to another council that is, in fact, interested in what it is that they're doing.
SPEAKER_05:Excellent. Excellent. Uh, I'd like to just take uh a second to real quickly touch on uh the growing presence of artificial intelligence type tools that we have. How do you see technology supporting transactional practice and and where might it where might it fall short compared to say, you know, the human judgment that's informed by what you've been talking about, the real business understandings? Would anyone like to share maybe your thoughts on what role AI can or maybe should play?
SPEAKER_03:I mean, I can see AI being able to undertake diligence in some ways and be able to at least flag uh important documents in a much more efficient manner than human beings can do going through the traditional document review, data room, uh deep dive. But how to make sense of what the documents mean, that I think is a human exercise as opposed to an AI exercise.
SPEAKER_02:Yeah, absolutely. I I completely agree with you, Kyle. And I don't know who said this. So um I apologize for not being able to give credit for the to this quote, but somebody um has said that lawyers aren't going to be replaced by AI, but AI is going to, oh sorry, now I'm gonna blank on the exact phrase. But it's basically like lawyers who know how to use AI are gonna replace those that don't know how. I I um didn't articulate that as beautifully as I intended, but I think the idea is there is that it's a tool to be used. And I definitely see it continuing to play a role in transactions going forward. I think to Kyle's point in the diligence process, being more efficient about basically condensing and and summarizing all the information that you need to digest in order to conduct the transaction itself.
SPEAKER_04:I tend to be a little bit more skeptical about how long it's gonna take before large language models are gonna overtake lawyers in certain areas. But I I think it in terms of you know drafting, because I think a lot of us in the transactional world worry about the production of documents. Um, I, you know, I think it's gonna be longer than a lot of people think, but I think it's gonna be a heck of a lot longer for things that require reasoning. And and so, you know, if you want to differentiate yourself, you you've got to start, you've got to move past document production and sort of thinking as the deal, as the negotiation of the documents, and start thinking of the deal as a cog in your in your client's business that the documents are supporting. And I I don't see um I you know I don't see large large language models overtaking lawyers in that type of reasoning, uh, probably within the career span of anybody who's graduating from law school soon.
SPEAKER_05:All right, very good, very good. Um, so let's uh shift gears just a little bit and uh we can we can talk a little about um regulatory complexities and and valuation um and where those kind of intersect. Um I'll start with um Kyle. So why do like um healthcare provider consulting arrangements, why do those attract so much scrutiny from regulators, just kind of as a jumping off point?
SPEAKER_03:Sure. Well, I mean your garden variety consulting agreement um can be used as a mechanism to um incentivize prescribing. And so that implicates the anti-kickback statute. So it's actually really important that consulting agreements are undertaken for a legitimate bona fide business need, and that the payment that occurs occurs as a result of actual work performed, and that it's in line with fair market values, so that it is not the case that um industry is lining the pockets of clinicians to ultimately prescribe their drug or utilize their medical device or app or whatever else um you know might be on the table for use. That that's really the biggest piece. So then understanding what it is that is fair market value for work undertaken is really important. And lawyers don't determine what is fair market value. We just let our clients know that you need to figure it out and that's what you should pay. And that's where valuation firms are critical.
SPEAKER_05:How about also maybe within the uh clinical trial related compensation arrangements? Same thing. Is that another area where you find kind of the the fair market value being a challenge challenge?
SPEAKER_03:It is, um, because you have to figure out like what are the what's the actual procedure cost? Um and so if you're an industry sponsor paying um or underwriting a clinical trial, you need to figure out like even something as simple as, okay, are you paying like per procedure, per visit, per total patient? Uh because when a regulator comes in and looks, there's like a whole bunch of different ways you can slice the pie to ensure that any given payment um is actually fair market value. So, yes, absolutely clinical trials are like you know, a huge budget that can be analyzed from fair market value perspective upside down and backwards, to be honest.
SPEAKER_05:For Eric or Ragani, do you see similar challenges in your practice for different kinds of transactions?
SPEAKER_04:I mean, I I see that um uh I think there are certain kind I think there are certain situations where valuations are critical and certain situations where valuations um can sort of uh take a little bit more of an informal route. And I there's so many variables in that. But um, you know, uh a transaction where there's an acquisition of a practice uh and you need a practice valuation, and the two parties are are uh referral sources to one another is kind of a no-brainer. I I guess I would say in in response to that, that one thing I would make I would people should be um uh sensitive to the fact that when you're recommending a valuation to a client, um your recommendation comes with a cost. Uh, they're gonna have to pay for that valuation. And you need to be sensitive to that, and you need to um you need to uh educate yourself in such a way that you can justify your position on that. And if you think about it within larger companies in particular, um uh, you know, there's a budget process, and the person you're speaking to on the phone is responsible for getting this transaction done within a certain budget. And it's you know, it's tough sometimes for them to accept the fact that, God, I got to spend you know$14,000,$16,000 on a valuation. And suddenly you become the enemy in that situation. The lawyer's making me do this, right? And you you've got to be sensitive to that. I'm not saying don't recommend valuations when they're appropriate. I'm saying be aware that it's not done in a vacuum and um and make sure that you can articulate why it's necessary and um and why it's gonna help them down the line.
SPEAKER_02:I I think to jump off of that too, I think it's important to consider and articulate to um the clients and providers what what the points of negotiation would be when it comes to obtaining a valuation, right? Like you, it's not just go get a valuation. It's okay, well, are both the parties or all of the parties going to obtain a valuation or just one of them, who's paying for it? Um, what are the parameters and assumptions that are going to be associated with that valuation? Um, what information from that valuation is gonna be shared amongst the parties? Um, you know, you may have to do a common interest agreement. Um, so those are all things to consider about, you know, when a client's trying to decide whether or not to even obtain a valuation, you know, it's not just do you get it yes or no? It's what does it mean when you actually do get it? Um, who's paying for it and and what's the scope?
SPEAKER_05:Very good. And and Kyle, having a practice under the constraints of a corporate integrity agreement, what was that experience like? And what lessons can attorneys uh draw from that level of external oversight?
SPEAKER_03:Yeah, I mean, what's difficult is that your whole program is going to be audited on an annual basis by an independent review organization. And so you're really living under a microscope. Um, so you don't have as much latitude to um assume risk where you otherwise might, because again, you're operating under a microscope. So it can be very taxing, it's very expensive. Um, you don't sort of think risk-benefit analysis if you uh undertake a risk on the one hand and maybe don't get that valuation, and then find yourself on the wrong end of an accusation of kickback, for example. Um, I promise you're gonna end up paying a whole lot more than you ever were going to for the valuation in the first instance.
SPEAKER_05:Very good. Um, would anyone else want to share some similar type experience where having been more proactive, or had you been more proactive, it might have helped the client avoid getting into that type of situation in the first place?
SPEAKER_02:Where do where do I begin? I mean, um obviously my experience is gonna be different than Kyle's working on um, you know, uh clinical trial agreements and um mine are mostly in the context of of transactions, you know, where um a formal valuation wasn't obtained um at the front end when it probably should have been or when one was obtained, but it wasn't done under the right parameters. Um so I mean it's it's helpful to work with I think your attorney and like explain the processes that you've that the client is going through and and the decisions and the um the factors informing those decisions. So um again, I'm gonna harp on communication channels um to make sure that you know the less things that can go awry do. Eric, I don't know if you've had any experience with that.
SPEAKER_04:I have. Um I I would say that uh I'm trying to think of situation. I I don't re I can't recall a situation where we went back and said, gee, I wish we had uh you know gotten a more formal valuation and we didn't, or we did something sort of more seat of our pants. Um uh I can't think of a situation like that. I can think of situations where the quality of the valuation was not strong, uh, and that questions came up in in an investigation where um there were some uncomfortable questions that the valuation person that we had hired was not really very effective in answering them, and they weren't really in the report. And that created uh ultimately the the outcome was okay, but it just created consternation with the the regulators in this sort of general sense that we had not done things as uh as as uh completely as we could have.
SPEAKER_05:Very good. So um Eric, then what what makes uh what makes a valuation firm what makes them good to work with? Like what do you as attorneys uh what do you need from them to feel confident the valuation will hold up?
SPEAKER_04:Yeah, I I so uh I I would say that um uh probably the thing I value most, you know, uh first of all, I would say that you need to be involved, if you can be, in vetting a valuation firm. In some cases, it's you know somebody who's well established and it's not an issue. But I I I've I've had a number of people who are CPAs, don't have a lot of valuation experience, it may not be properly credentialed, but say they can value a practice, and really don't understand the healthcare industry well enough to do that. I mean, reimbursed the revenue end of uh valuation in this industry is about as complex as it gaps. It's not like valuing an inventory in a shop or something like that. Um and um so being involved in that vetting process, I think is really important because you're gonna be looking for things that the client might not be looking at. Um, I would I would say the thing I value most probably is integrity. Um, and uh what I mean by that is I've I've had a couple of occasions over my career where the the the person on the other end of the phone, sort of wanting to get the business, said something along the lines of, I'll make the numbers say what you want them to say. And um I I the rest of the conversation to me is wah wah wah wah and that immediately disqualifies them um as far as I'm concerned. I'm I mean, I understand there's some flexibility and some range, but that's just that's off the table as far as I'm concerned. So that that's that's I think part of it. The other thing I would say is you've you've got to, this goes back to what we were talking about before. Got to educate yourself about the fundamentals of the valuation process as a lawyer to understand how to make a recommendation and whether to make a recommendation. So, you know, how does a how does a discounted cash flow analysis work? Um, what is EVITA? What is an appropriate multiple of EVITA in a case like this? Is you know, can you just do a a cost, uh uh an approximate cost and then divide it by the number of hours? How do real estate valuations work? Uh is common space part of it? Is is uh uh dead space part of the um uh part of uh how the calculation works. Um and uh I guess uh in in in concert with that, I would say um develop a relationship with an experienced valuation person and use that person or or work with that person as an ally, right? Because um if you need to convince a reluctant client about an expensive valuation, having somebody that you know next to you saying, yeah, I agree, and this is why, but with the financial end of the experience is critical. And also having somebody to uh, you know, as a founding board. I mean, I've I've developed a lot of rules of thumb over the years uh, you know, to sort of approximate do we need evaluation in this case? You know, uh are there um are there stark issues where uh you know intent is is uh not not uh relevant, or is this in you know in a situation where we've got two referral sources? But I've kind of developed some rules of thumb, but I I generally call somebody and say, here, this is the way I'm thinking about it. What do you think? And if you have somebody that you can call uh and and develop that kind of an alliance with, I mean, and somebody who's willing to sort of play that role and and uh uh it's just I mean, it's indispensable uh as far as I'm concerned.
SPEAKER_05:Very good. Uh Ragney, you want to share any um insights you have on how to work with or or choose a good valuation partner?
SPEAKER_02:Um I think I have to echo everything Eric just said. Um, I don't think um I could say it any better than that. But the one thing I would add is, you know, be be aware um there are a lot of valuation consultants out there, obviously. And everybody I think has their um has like their area of expertise. And so it's important when you're picking, you know, a valuation consultant or as an attorney, you you know, you're helping your client vet valuation consultants, you understand what their areas of expertise could be and how they can help, you know, identify value drivers and um things that somebody else might overlook. So that would be the only thing I would add to that.
SPEAKER_05:Very good. And Kyle, would you like to add anything on on that?
SPEAKER_03:I mean, I just want to echo what Eric said about disqualifying any anybody that says we'll make the numbers work for you, because that's gonna end up being indefensible. And so you just, you know, it's you might as well light money on fire.
SPEAKER_04:By the way, I'll I'll I'll add to that a little bit too. And I I uh pal, feel free to call me on this because you have more experience with this than I do. But when you're vetting someone, think of them as, you know, you're sitting at a table with a regulator explaining what the theory of this deal was, and who do you want sitting next to you? You you want somebody who's articulate, knowledgeable, and comfortable in a high stress situation where it matters what they say, and they're not bumbling around to looking at numbers and and and all that kind of stuff. So part of the vetting process is how is this person going to play at the table with a regulator if if we ever have the misfortune of getting to that point?
SPEAKER_05:Very good. Very good. Well, y'all have shared some excellent insights into you know the challenges, complexities of FMV and compliance. Uh for our final uh segment, I'd like to turn to maybe more the practical side. Let's talk a little about the skills and maybe habits that can make attorneys uh better advisors in these types of transactions. So uh let's start with Ragani. Uh for a uh for attorneys working on their maybe their first governance project or joint venture, what practical advice uh would you offer maybe particularly around setting expectations or like you mentioned before, managing different stakeholder interests?
SPEAKER_02:Yeah.
SPEAKER_05:Just to avoid those, you know, those pitfalls.
SPEAKER_02:Yeah, absolutely. I mean, I'm just gonna reiterate it again. I think knowing who the stakeholders are, you know, you have owners and you have your C-suite, but knowing who is really making the enterprise work and who's making the venture work, and it's not obviously just that group of people, it's also your employees, your clinical staff. Um, so I think it's really important to consider all of those stakeholders' interests and you know where where those interests may fall in the drafting of agreements and and structuring of um structuring of governance. So um, you know, by way of example, if you think about an ASC, right, you don't just have your board of managers, you also have your medical director, your administrator, your medical executive committee. And so um, and knowing that as you're drafting all the documents, that kind of those foundational documents that address, you know, the responsibilities and roles that everybody's playing, you need to know, you know, who's playing those roles. So really think about it from a big picture perspective. I don't um, you know, we get we get taught a lot of, you know, A, B, and C in law school, like that, you know, you have a purchase agreement or you have an operating agreement, but there's a lot more to it than that. And I think sometimes some of that, those ancillary documents and and thinking about these additional folks um kind of falls by the wayside and it it shouldn't, it really shouldn't. Um, I mean, I think uh a couple other things I would mention, we've which we've kind of talked about already today, but um, you know, managing buyer, buyer seller, you know, the your clients' expectations when it comes to um timing and um what it's gonna take to complete um a project, you know, from a regulatory perspective, you know, if you're doing a transaction and it's gonna require some sort of um state agency transaction approval, um, you know, setting those expectations from the start, you know, it could set you out five, six, you know, 10 months a year, and you know, making sure that the parties are aware of what that means operationally. Um and then finally, this is my personal one. It's it's knowing which hills to die on and um when it's when it's not necessary to be a jerk. Um, I think I I think Eric would agree with me on that, but you know, knowing exactly um when it's worth fighting over a small point or or you know, language in a form. Um sometimes we kind of want to, you know, stick our feet in and dig our heels in and say that, oh, it's my way, my draft is the best draft, my my articulation of this is better than yours. And really at the end of the day, your goal is to get your clients to a place of agreement and get your clients to an end goal, you know, this partnership, this collaboration, and um, being a jerk isn't gonna get you there. So that's my that's my last tidbit.
SPEAKER_05:Very good. And and Kyle, for uh when when attorneys are uh working with uh compliance teams or valuation experts, what practices or approaches uh do you follow that might lead to smoother, you know, more effective relationships and and and what missteps you know should they avoid?
SPEAKER_03:Yeah, I mean, I think taking time to listen to all the various viewpoints and consider them before figuring out and deciding what hill you're gonna die on. I think that's a really important exercise.
SPEAKER_05:Very good. And Eric, from your perspective, like what did what is it what does it look like for an attorney to uh evolve into that uh trusted advisor role rather than just someone who is more reactive to issues? And what practical steps you know might help attorneys uh make that transition?
SPEAKER_04:I was thinking about this earlier before we got on this podcast, and uh uh there's a story I like to tell about uh Richard Feynman, who was a physicist who won the Nobel uh prize for physics years ago. And uh he talks in some papers about his relationship with his father when he was a child. His father was not a scientist, but they used to look at ants and insects together. And and Feynman said, you know, the the the best gift that you can uh instill in your children is uh the gift of intellectual curiosity. And I think that's good at career advice also, because um asking questions and not being afraid of ignorance, of your own ignorance is is such a great way to advance uh your knowledge and your career. Rogney made made reference to this earlier, um that you know uh uh that uh sort of early in your career, uh you might you you might be um you might be inclined to sort of there just think gonna be things you don't know. And and um yeah, saying I I don't know what that is, uh, and taking the risk of sort of looking ignorant about something is a great, a great way to learn. And the more pieces you put into the puzzle, the better you'll get at it, and the more valuable you will be to clients, and the more calls you'll get, to be frank.
SPEAKER_05:Very good. Well said. Well said. Um, so I guess one if there's one final uh piece of advice and anyone would like to share one final thought that uh maybe we touched on briefly, you want to expound upon. Now's your chance. Uh, we can uh try to share with our uh the audience today um just something to help like looking ahead and going forward. What's one last piece of advice you might offer? Uh Kyle, how about you go first?
SPEAKER_03:Ask questions. I think that was really great. Just you know what Eric said. I parrot that 100%. Ask questions. It's okay if you don't know something, it's actually not okay to pretend that you do when you don't.
SPEAKER_04:I would say doing doing deals is fun. It's one of the most fun parts about being a lawyer. I've been other stuff that's not quite as fun. Um have fun. Do it. If you have fun, you'll get good at it. Promise. Very good.
SPEAKER_02:Um, I will echo that and say, you know, again, um don't don't get stuck on trying to always be like be the winner. Um, you know, always remember that what the end goal is and that, you know, being a nice person will sometimes get you further towards that goal than than just sticking your heels in the sand about stuff.
SPEAKER_05:Very good. Uh well, thank you all for this thoughtful and um and really practical conversation. Uh, your insights into deal dynamics and fair market value challenges and just general business-minded lawyering are incredibly valuable. And to our AHLA listeners, thanks for being with us. We hope you found this discussion uh relevant and useful and take care, everybody.
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