Getting the Right Lawyer on Your M&A Team

Getting the Right Lawyer for your M&A Team

                                                            Photo by J.A. Warletta

While business owners typically like to hire lawyers almost as much as they like to get root canals, nothing can make a transaction smoother (or kill a transaction faster) than getting the right (or wrong) lawyer on your transaction team.

There are really two different issues. First, many business owners are reticent to hire a lawyer at all. As a recovering lawyer myself, I get it. Lawyers are expensive and frankly, risk averse. Both of these tend not to sit well with entrepreneurs who are generally risk takers focused on the bottom line. But, buyers will come to a transaction fully armed – you need competent counsel on your side. Whether the buyer is a Private Equity firm or a Strategic Buyer, you’ll quickly realize that they have a team of lawyers expert in every part of the deal, including M&A, tax, HR, and environmental issues. You will need counsel to converse and negotiate with them. It will be costly. But, it will be some of the best money you spend.

The second issue is that to the extent business owners have had counsel in the past, it has often been for general corporate guidance, family law, estate planning, HR, or some other area not related to a transaction. Often, sellers want to use these lawyers on the deal because they’ve been helpful in the past. This is a mistake! These lawyers might have been good in the past, but they probably are not versed in selling companies. It is important to find an expert in the M&A process. You’ll absolutely want someone on your team who regularly handles deals for sellers like you.

Finally, planning your transaction in advance can be crucial to getting the best valuation. Getting your lawyer on the team early (well before you are seeking buyers) and allowing him or her to assist in planning how to handle complex deal issues in advance can be of great help when the crunch time comes later on.

Josh Lawler of Zuber, Lawler & Del Duca recently put together a presentation outlining 12 Questions to Ask When Hiring an M&A Lawyer. It is an excellent resource and can give you some great ideas on how to think through this crucial addition to your team.

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