Closing the M&A Governance Gaps That Can Undermine Deals

Even in the best of circumstances, mergers and acquisitions (M&A) are time-consuming and stressful for in-house counsel. Meanwhile, security or compliance missteps increase risk exposure and add the threat of financial or reputational repercussions. 

When regulators scrutinize a transaction, whether through formal information requests, document demands, or investigative proceedings, the quality of a deal team’s document governance shifts from a secondary consideration to the main priority. By focusing on a few key areas, in-house teams can avoid some of the most common pitfalls and close the M&A governance gaps that drive unnecessary risk.

Challenge 1: Making sure cross-border deals don’t run afoul of GDPR

For many cross-border deals, the rigid requirements of the European Union’s General Data Protection Regulation (GDPR) hold sway. This means that in-house counsel must know where their data physically sits. If deal documents are scattered across personal email accounts, US-based shared drives, and external collaboration platforms, a deal team cannot even answer the threshold question of whether a GDPR transfer restriction is engaged, let alone what mechanism applies.

Practically speaking, counsel don’t just need a platform for their due diligence materials that offers document and email management capabilities. They require a platform that supports region-specific data residency requirements. The goal is to ensure EU deal documents are hosted within the European Economic Area (EEA).

This data residency capability matters enormously during a regulatory review because personal data contained in documents held within the EEA may be subject to GDPR transfer restrictions before being exported to a US regulator. The deal team has a clear, auditable record of where data sits, making the transfer impact assessment required under GDPR readily achievable.

Additionally, when a second request arrives, counsel can identify which documents are held in EU-hosted environments and which transfer mechanism applies to each production, rather than scrambling to figure out the particulars under the pressure of a ticking clock. Without this kind of governed document environment, the data residency question is simply unanswerable, and regulators on both sides of the Atlantic will definitely ask it.

All of this underscores a broader point: even well-intentioned teams struggle without systems that make compliance practical at scale. The iManage Knowledge Work Benchmark Report 2026, which surveyed knowledge workers in 26 countries (including those in corporate legal departments), found that 65% of all respondents use a system to manage the document lifecycle. This suggests a widespread need for better tools to help these professionals close governance gaps and meet compliance goals.

Challenge 2: Privilege protection in a multi-channel world

Prominent law firms have noted how candid internal communications have become a significant regulatory liability in M&A reviews. A striking example of this is the United Kingdom’s Competition and Markets Authority’s (CMA) investigation into Meta’s acquisition of Giphy, which illustrates how thoroughly regulators will interrogate a deal team’s own documents.

The CMA reviewed the parties’ internal strategy papers, board materials, and executive communications, revealing strategic intent that Meta had publicly downplayed. The CMA ultimately ordered Meta to divest Giphy entirely. It was one of the most high-profile instances of a global regulator forcing a Big Tech company to unwind a completed acquisition.

The practical lesson for in-house counsel? Every email written by a deal team member that discusses competitive positioning, market share, or deal rationale is a potential regulatory exhibit. Treat internal communications as if they will be read by a regulator—because increasingly, they will be.

Privilege waiver risk in due diligence is heavily dependent on access: who can see a document or memo, when they can see it, and under what controls. Making sure the team has established a privilege protocol right at the outset, supported by a platform with need-to-know access controls and information barriers at the document level, is essential.

In practical M&A terms, this means legal advice documents should be restricted to named counsel and clearly labeled as privileged within the system, preventing inadvertent disclosure in a data room.

Information barriers should be enforced between deal teams on conflicting transactions. Additionally, access logs within the system managing the deal documents should create an auditable record of who viewed a document and when, which is exactly what regulators and courts look at when assessing whether privilege was waived.

DLO Enterprises, Inc. v. Innovative Chemical Products Group in Delaware highlights a critical but often overlooked risk: even where privilege is legally retained by the seller, mishandling transferred email systems can create real exposure. By considering whether privilege was waived when buyer-controlled accounts contained seller-counsel communications, the court underscored how governance gaps can put otherwise clear legal protections at risk without strong document controls and properly configured access.

Stronger governance = safer M&A

None of this requires reinventing how deals get done. It just requires focusing on document governance as a deal discipline rather than an administrative task. The most effective deal teams are the ones who treat data residency, privilege, and governance as top priorities rather than afterthoughts. With the right controls in place, in-house counsel can turn what used to be regulatory landmines into predictable, defensible workflows that keep transactions moving forward.