When to use
Use this during M&A or investment diligence to convert a pile of data-room documents into a structured issues list: what was found, why it matters, how severe it is, and where it lives. It turns raw document review into the risk picture the deal team and counsel act on.
Not for: organizing the review itself (use corpl-tabular-review); building the disclosure/contract schedule (use corpl-material-contract-schedule); rendering the final legal risk opinion — severity flags are triage, and the legal conclusion belongs to counsel. Every extracted issue is a flag for attorney assessment, not a determination.
Method
- Scope the review. Which documents, which diligence categories (corporate, contracts, IP, litigation, employment, tax, regulatory, financial), against what materiality threshold.
- Read for issue types, not just contents: missing consents, change-of-control triggers, undisclosed liabilities, unusual or off-market terms, expired or auto-renewing agreements, encumbrances, litigation, compliance gaps.
- Capture each issue with its source. Document name, section/page, and a one-line description of the fact.
- Assess severity — high / medium / low — based on likelihood and magnitude of impact on the deal. Decision point: any high-severity or deal-jeopardizing finding (material undisclosed liability, missing key consent, regulatory violation) is flagged for immediate counsel review, not batched.
- Note the implication and a proposed action (needs consent, price adjustment, rep/warranty, escrow, walk-away) — framed as options for counsel.
- Cross-reference related issues so the same root problem is not double-counted.
- Route the list to counsel before it informs any negotiating position.
Example
IP diligence, 12 documents, threshold "any exclusive license or IP assignment gap." Issues: (1) HIGH — key patent assigned by a former contractor with no IP-assignment agreement on file (source: employment folder 3.1); implication: ownership defect, propose R&W + escrow. (2) MEDIUM — software license auto-renews with 90-day notice, missed window approaching (source: contracts 5.4). (3) LOW — trademark registration lapsed in one minor jurisdiction. High item escalated same day.
Pitfalls
- Extracting without sources. An issue counsel can't trace to a document is unusable.
- Uniform severity. If everything is "high," nothing is; calibrate to deal impact.
- Stating legal conclusions. "This breaches the license" is counsel's call — record the fact and flag it.
- Batching a deal-killer. High-severity findings escalate immediately, not at the end of the review.
Output format
DILIGENCE ISSUES — <deal> | Scope: <categories> | Threshold: <...>
| # | Issue | Category | Source (doc/§) | Severity | Implication | Proposed action |
High-severity — escalated to counsel:
Related/duplicate issues (grouped):
Coverage: <docs reviewed / total>
For attorney assessment — severity flags are triage, not legal conclusions
Reference
Standard diligence categories: corporate/organizational, material contracts, intellectual property, litigation, employment/benefits, tax, regulatory/compliance, real property, environmental, and financial. Common red flags: missing consents, change-of-control triggers, undisclosed or contingent liabilities, off-market terms, encumbrances, and compliance gaps. Severity is triage for prioritization; the legal risk assessment and its deal consequences are determined by counsel. Feed high-severity items to the deal summary and the schedule workflows.
1---2name: corpl-diligence-issue-extraction3description: Read diligence documents and extract material issues — risks, liabilities, and red flags — into a prioritized, sourced issues list for counsel.4---56## When to use78Use this during M&A or investment diligence to convert a pile of data-room documents into a structured issues list: what was found, why it matters, how severe it is, and where it lives. It turns raw document review into the risk picture the deal team and counsel act on.910**Not for:** organizing the review itself (use corpl-tabular-review); building the disclosure/contract schedule (use corpl-material-contract-schedule); rendering the final legal risk opinion — severity flags are triage, and the legal conclusion belongs to counsel. Every extracted issue is a flag for attorney assessment, not a determination.1112## Method13141. **Scope the review.** Which documents, which diligence categories (corporate, contracts, IP, litigation, employment, tax, regulatory, financial), against what materiality threshold.152. **Read for issue types**, not just contents: missing consents, change-of-control triggers, undisclosed liabilities, unusual or off-market terms, expired or auto-renewing agreements, encumbrances, litigation, compliance gaps.163. **Capture each issue with its source.** Document name, section/page, and a one-line description of the fact.174. **Assess severity** — high / medium / low — based on likelihood and magnitude of impact on the deal. *Decision point:* any high-severity or deal-jeopardizing finding (material undisclosed liability, missing key consent, regulatory violation) is flagged for immediate counsel review, not batched.185. **Note the implication and a proposed action** (needs consent, price adjustment, rep/warranty, escrow, walk-away) — framed as options for counsel.196. **Cross-reference related issues** so the same root problem is not double-counted.207. **Route the list to counsel** before it informs any negotiating position.2122## Example2324IP diligence, 12 documents, threshold "any exclusive license or IP assignment gap." Issues: (1) HIGH — key patent assigned by a former contractor with no IP-assignment agreement on file (source: employment folder 3.1); implication: ownership defect, propose R&W + escrow. (2) MEDIUM — software license auto-renews with 90-day notice, missed window approaching (source: contracts 5.4). (3) LOW — trademark registration lapsed in one minor jurisdiction. High item escalated same day.2526## Pitfalls2728- **Extracting without sources.** An issue counsel can't trace to a document is unusable.29- **Uniform severity.** If everything is "high," nothing is; calibrate to deal impact.30- **Stating legal conclusions.** "This breaches the license" is counsel's call — record the fact and flag it.31- **Batching a deal-killer.** High-severity findings escalate immediately, not at the end of the review.3233## Output format3435```36DILIGENCE ISSUES — <deal> | Scope: <categories> | Threshold: <...>37 | # | Issue | Category | Source (doc/§) | Severity | Implication | Proposed action |38High-severity — escalated to counsel:39Related/duplicate issues (grouped):40Coverage: <docs reviewed / total>41For attorney assessment — severity flags are triage, not legal conclusions42```4344## Reference4546Standard diligence categories: corporate/organizational, material contracts, intellectual property, litigation, employment/benefits, tax, regulatory/compliance, real property, environmental, and financial. Common red flags: missing consents, change-of-control triggers, undisclosed or contingent liabilities, off-market terms, encumbrances, and compliance gaps. Severity is triage for prioritization; the legal risk assessment and its deal consequences are determined by counsel. Feed high-severity items to the deal summary and the schedule workflows.
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