Things I need to know about a lawyer before partnering with them on the buy side

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by a searcher from The University of Michigan - Stephen M. Ross School of Business
in Ann Arbor, MI, USA

10mos ago

Things I need to know about a lawyer before partnering with them on the buy side

Hi searchers! I would greatly appreciate some suggestions on how you decided to work with your legal partner during your acquisition process, specifically regarding the LOI, non-compete, and closing documents, among others. I am a self-funded searcher, and I am very mindful of my expenses, as you would expect. Price/quality of service value is top of mind; therefore, any advice in this area is welcome. Cheers

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reply by an investor 10mos ago
from McGill University in San Diego, CA, USA

A lot of good answers thus far! I just finished reading Joel Ankney's fantastic book: Here's the Deal: Everything You Wish a Lawyer Would Tell You About Buying a Small Business. The book goes through everything a lawyer will do for their client to close a deal. I highly recommend it Here's a good quote from the book: "you should make sure you hire a business lawyer, not a trial lawyer—there is a difference. Trial lawyers are good for lawsuits, but their adversarial approach to resolving disputes usually harms a business deal. In addition, their lack of regular experiences with negotiating and closing business deals usually means they are not good at spotting risks and issues involved in deals. They won’t be able to filter or prioritize issues because they don’t understand what is customary and reasonable. If I learn that a trial attorney is involved in a deal, red flags go up, and I anticipate a difficult negotiation, poorly drafted documents that will require lots of re-drafting, and unproductive gamesmanship". to that last point, you not only need to find a lawyer that knows the ins and outs of an M&A transaction in the LMM, but one that has experience dealing with difficult people (and can still close deals), inexperienced lawyers (and can still close deals), volatile sellers (and can still close deals), etc. Best of luck!

reply by a searcher 10mos ago
from University of Missouri in Kansas City, MO, USA

Just a thought related to communications. I think it is important that you use an experienced transaction attorney and share with them your objectives in the transaction. If you want to have an adversarial stance and negotiate hard on price (and you're willing to walk away)...let them know. If you want the deal to go through but you have a couple of deal breakers...let them know. If you are willing to accept certain risks...let them know. In the absence of good communication, the default position an attorney will take is to mitigate all risks in a deal.