Questions and anxieties abound in the business world, as executives wrestle with questions like, “How can I continue to get deals done?” or “How can I reduce my footprint?”

“If anything, this pandemic has indicated if you can control your fixed costs and you have a strong balance sheet, you can weather the storm,” says Chris Farmakis, chairman of Babst Calland.

Most the law firm’s clients who had deals past the letter of intent stage have found ways to close transactions, because deals that made sense before still make strategic and economic sense now.

“Now, the buyers and sellers are very nervous,” he says. “Behind the scenes, our respective clients are probably saying to us about four or five times a day, ‘You’ve got to get this deal closed. We’ve got to get this deal closed.’ But I think the other side of the fence is saying the same thing, too.”

Newer deals, however, have often been pushed back.

“As we move deeper into the summer, I think it will be much clearer whether or not those pushed deals just never come back to life,” Farmakis says.

Farmakis spoke with the Smart Business Dealmakers podcast about what C-suite executives should be thinking about.

Listen to the podcast

What factors have held up those pushed deals?

The mechanics of doing a deal are slightly different. With remote data rooms, you can do most of the paper review. But when you’re talking about getting HR teams together or technical teams together or engineering teams together to proof out technology, a lot of that work still happens in real time together in a physical office. The management presentation meetings among the C-level executives to talk about synergies — those things are all being pushed back.

A lot of the sellers are not desiring to do that remotely because there’s a loss of a connection there, in terms of a buyer and seller, and that’s what you need to make a deal proceed, to have that connection.

But there are other issues that are hitting that are legal related. It’s things that you don’t really think about until you get into it. With the court systems being closed and the recorder of deeds being closed, it’s becoming much more difficult to get — if you have a big real estate deal, for instance — a bunch of title work done for a potential deal. It’s difficult to even be prepared to evaluate those assets in a meaningful way because you can’t even get into the courthouse to do the title search.

And of course, I’m not going to discount the fact that no one really knows. Even though we’re, in the Pittsburgh region, six or seven weeks into this pandemic, I feel like we’re very much in the early stages still in terms of dealmaking. No one really knows what’s going to happen in deep summer, heading into fall, in terms of the economics.

How is the decentralized response to the pandemic creating challenges for dealmakers?

I think physical plant locations and HR issues are two of the key issues that buyers are looking at when they’re thinking about, ‘If I buy these assets, I’m only going to have two plants online for the next nine months, and I’m going to be taking over people on family and medical leave and unemployment, and I don’t know if I have the right skills coming back.’