Issue link: http://read.uberflip.com/i/2923
ILTA White Paper Practice Management 16 W ith the wide range of communication methods available and the increasing need to transact global business in real time, it is not surprising that virtual data rooms (VDR) are becoming increasingly popular in corporate transactions. These online rooms began their lives as online portals or secure online folders created to replace a physical data room for corporate due diligence. Today, some law firms have their own custom-built offerings, and there are many Web-based products specifically written to conduct the due diligence process for mergers or acquisitions, raising capital, trade sales or IPOs. This technology is being used more and more to facilitate strategic partnerships, joint ventures, financial restructuring, postmerger integration, private equity raising and licensing extensions. Fast Internet access combined with advances in Web technologies has cultivated a viable platform for "electronic deal rooms" and "electronic data rooms." A deal room is a secure online site where documents can be drafted and posted for the deal participants to access, review and post newly marked-up versions. A data room is used traditionally to support the due diligence process. Historically, hard-copy due diligence document reviews took place in small, dimly lit rooms, usually with no windows and with limited ventilation. The room generally contained a number of hastily erected metal shelving units filled with folders containing the vendor's business records and associated materials for disclosure. Often the room had no telephone nor tea or coffee-making conveniences. Typically, physical (or hard copy) data rooms were open for inspection between 9:00 a.m. to 5:00 p.m., Monday through Friday, with some rooms allowing extended access with prior notice. With the application of technology, a hard copy data room can be transformed into an electronic data room. An electronic data room is a secure website where the documents are stored in folders. Documents are stored in electronic format on a central server accessed via the Internet. A site index is used to order the documents into folders which are then accessed by the bid team or invited participants. One notable difference between a physical data room and an electronic data room is that the virtual room allows you to work from anywhere at any time. hoW eLeCTronIC dATA rooMS WorK To access a room, you typically need the following: • An Internet connection • An Internet browser • Adobe Acrobat Reader • Additional software to view documents posted in native formats (for example, Excel spreadsheets and CAD files) micheLLe mahoney maLLeSonS Stephen JaqueS The Growing Popularity of Virtual Data Rooms