Why a Good Deal Feels Like a Bad One

T‌his Article feature Nella Bloom, M&A Laywer A good deal is one that everyone equally hates. When people think about buying or selling a company, they tend to think the goal is to make everyone happy. But it never works that way. The buyer wishes they’d paid less. The seller wishes they’d gotten more. So if either side is thrilled, then someone probably got stiffed. This is something Nella Bloom knows well. For the past 11 years, she’s been in the middle of M&A transactions. She started as a bankruptcy lawyer, which means she’s used to situations where everyone knows the outcome will be painful. In bankruptcy, a lawyer’s job is to figure out how to share that pain. M&A isn’t so different. Today, Nella works with small businesses, helping them buy and sell assets, and also does general counsel work, drafting contracts like MSAs to solve the messy legal problems that owners don’t think about until they have to. Thanks for reading QOE Prep! Subscribe for free to receive new posts and support my work. What Lawyers Actually Do in M&A Deals As an M&A lawyer, Nella focuses on what’s hidden in the fine print, like indemnification clauses. On the surface, an indemnification clause seems simple: if something goes wrong on my watch, I pay; if it happens on yours, you pay. But Nella has seen plenty of contracts that quietly flip that. Most clients don’t notice, because the clause is buried in the parts that are boring and hard to read. Without an eye for these details, you can suddenly find yourself holding the bag for someone else’s mistakes. Or take defects that weren’t accounted for. Imagine buying an essential service business like a construction office. A year later, mold starts growing behind a wall they built. Who pays? Without the proper planning, it might be you. That’s why Nella often pushes for tail insurance, so that any problems discovered later are covered by the seller’s policy. It’s not glamorous work, but it’s the kind of thing that prevents a seemingly good deal from turning into a nightmare. Signs of a Successful Deal If you want to know whether an M&A deal is going to work, you can’t just look at the spreadsheets. You have to look at the people that built the business. Nella says the best predictor is whether the client is willing to listen. Clients who listen, ask questions, and are open to examining their own motives are much more likely to reach a successful outcome. When someone gets stuck on a number (“I just want X dollars” or “I need the buyer to keep all my employees”), they can derail their own chances of closing. According to Nella, asking why is the most important tool in any profession. Why do you want that price? Why do you insist on that condition? Sometimes what clients think they want isn’t what they actually care about. A willingness to probe those assumptions often separates a smooth deal from a painful one. Having this attitude brings you one step closer to reaching a fair deal. You have to remain open to the frustrations you’ll encounter during an M&A deal. How to Handle Uncertainty Every M&A transaction is riddled with uncertainty. Some you can control, most you can’t. Nella takes a three-part approach. Deal with the controllable: tighten up indemnification, add tail insurance, draft contingencies. Gain information: look at existing contracts and search for possible liabilities. Prepare the client for what can’t be controlled. Within the first two calls, Nella tells clients to expect a moment (usually just before closing) when it feels like everything is about to fall apart. Maybe the landlord won’t approve the lease transfer, or there’s an unexpected bank lien, or the seller suddenly gets cold feet. Almost every deal hits a wall in the two weeks before closing. And 95% of the time, those deals still close. The obstacle turns out to be a boulder in the road, not a brick wall. Even if you can’t smash through it, you can usually go around it. The trick is telling clients in advance that the boulder is coming. That way, when the obstacle does come around, they don’t panic. I’m Not Happy, Bob. Not. Happy. A lawyer’s job in M&A isn’t to make clients happy. It’s to keep them safe. That means spotting the things no one else is thinking about, keeping expectations realistic, and reminding everyone what a fair deal actually looks like.