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Choosing the Right Lawyer to Help Sell Your Business

This article was contributed by Saktish Pillai, Legal Counsel at Volaris Group.

Once you’ve decided to sell your business, one of the areas you’ll require support with is the legal side of the M&A process. Though you may already employ a business lawyer, you’ll likely want to consider enlisting the services of counsel that has more experience in M&A. The right legal advisor will help ensure that you understand the process, advise you on risks, advocate on your behalf, and ultimately, close the deal.

Below are some points you will want to think about when choosing a legal advisor:

1. When to involve counsel.

Many sellers choose to involve legal counsel after having signed a non-binding Letter of Intent (LOI) that outlines the major deal points; while some wish to involve counsel in negotiating the LOI itself. This decision should be based on personal comfort and familiarity with looking at legal-type documents.

2. Do they have M&A experience?

You will want to look at their experience completing acquisitions, as well as the depth of their experience in the specific industry that your business serves. It is also important that your advisor has knowledge about the nuances of your specific market, so that they can identify the deal risks. Mitigating risk is an especially great concern if your business operates in a regulated or complex industry, such as financial services. Before hiring legal counsel, it would be useful to ask for references to help gauge the number and type of transactions the advisor has closed.

3. Trusted advisor status.

You need to feel comfortable sharing information with your counsel and feel comfortable with how they are representing you. This will include alignment on negotiating style, availability, responsiveness, and personal compatibility. Good legal counsel should act as strategic advisor, providing practical advice to get the deal done in keeping with your objectives.

4. Cost.

There will always be some balancing required in choosing a lawyer or firm. To get the best value, you want to ensure that they have the resources to close your deal, without spending too much relative to the transaction size. Choosing a larger firm will ensure that specialists in the industry or legal area will be available as necessary (e.g. property lawyers, intellectual property); but you may wish to avoid those costs and engage specialists separately if needed. Experienced M&A lawyers will be able to give you an estimate of costs up-front, or even give you a cap on what total costs will be.

In conclusion

Spending the time and effort to select the right lawyer is important to reduce risk and ensure a smooth sales process. Larger and more experienced firms may charge more for their services, however depending on your circumstances it may be worth the cost. Alternately, you may find that a smaller or more niche consultancy will be able to serve your needs, particularly if you already have strong business advisory connections.

What’s next?

Lawyers are one of several types of business advisors that you’ll want to engage with during the pre-LOI or LOI stages of your selling process. Additional advisors you may want to contact include M&A advisories, business brokers, and accountants specializing in M&A.