By Joe Brady
The transaction lawyers play a critical role in the final leg of a M&A process. For the seller, they assist with legal due diligence, review and help negotiate a variety of pivotal closing documents starting with the purchase agreement and disclosure schedules, but also including non-competes, employment agreements, real estate leases, escrow agreement, etc. Founders has seen the good, the bad and the ugly and we can assure you from experience, a good transaction lawyer can help you identify and mitigate legal risk and avoid a lot of frustration in the process, while also raising the probability of you getting your deal across the finish line. Here are six questions to consider when you’re hiring a M&A attorney.
- Do They Specialize in M&A? – Not all lawyers are the same. They often specialize in particular areas of the law. Don’t hire your in-law who took an on-line course on contracts, or your real estate lawyer. You need an expert; hire a transaction lawyer.
- Do They Know Your Industry? – Find someone who works within your industry. Each industry has unique legal considerations and having a working knowledge of these differences is critical in getting the protection you need in a purchase agreement and other deal-related legal agreements. Also, if it is a private equity (sponsor-led) transaction, find someone who focuses on/has experience with these type of deals.
- Do They Have Ample Experience? – Make sure the lawyer has ample experience and is actively doing deals. Each deal has its own set of unique circumstances and challenges. You need an attorney who’s seen a lot of deals to assure you that they (or their team) have practical experience with any problem that may come up. Also, knowing the most recent trends for escrow, caps and baskets, indemnification, etc. is an important part of a deal. If someone is a great deal attorney but has been out of the game for a while, they will be out of touch with “market” terms, reps and warranties.
- Do They Understand Your End Goals? – Deals are very personalized and individual, as are the objectives for each. Make sure that your lawyer knows what to push for and what to be able to give. For some, a non-compete of five years may not be an issue, and others want to minimize any sort of ongoing environmental or litigation exposure as part of the deal. They need to listen to you and demonstrate they know what is most and least important to you.
- Do They Have A Good Reputation? – Don’t just listen to the sales pitch from the lawyer. Ask to speak with references and past clients, and do your own homework. Reputable M&A advisors can also be a good source of information. They see a lot of deals and thus a lot of deal attorneys in action, so they will have more experience and greater perspective on what makes a good M&A lawyer.
- Do They Have A Good Team and Resources? – This is typically not a one-man show. Make sure he/she has a capable and quality team working alongside them. Also, make sure you know who will be doing the majority of the work (at big firms, smaller deals are often farmed out to new associates who are inexperienced).
If you’re considering selling or recapitalizing your business, and need help selecting a M&A lawyer, we’d be happy to help. For questions concerning this matter, contact John Ortstadt at email@example.com.