Killing the Attorneys Can Kill the Deal

By Tom Taulli

One of my students purchased a business last year and the process went smoothly. After growing the business, he decided to make another purchase. Well, things were a little more difficult the second time. The seller was being difficult and the deal was close to falling to pieces. I asked my student whether certain clauses were in the purchase agreement. He said "no". Apparently, he did not use an attorney.

We all know the attorney jokes. And, yes, attorneys can be quite anal and expensive. But, whether the deal is big or small, you need to get the help of an attorney (even if you are an attorney!)

The key is finding one that is qualified for the type of transaction you are contemplating. Here are some tips to make the process easier:

Strategies

Referrals: Ask CPAs and other professionals for referrals (in fact, from time to time, I get such requests; so feel free to shoot me an email). Get at least three names. And interview each.

Experience: What experience does the attorney have with M&A transactions? What types of deals does he or she focus on? What is the price range? You want an attorney who has direct experience on your particular transaction.

Fees: The attorney should provide you with an estimate on the time and fees expected for the transaction. Get this in writing.

Team: Who will handle the case? Is it a team? If so, make sure you can interview all the team players.

Background Check: You can call-up the state bar and do a background check. Avoid those attorneys that have any types of sanctions.

Conclusion

When should you hire an attorney? Before the transaction is begun. The reason is that, if the attorney comes at the later stages, he or she may bring up big issues that can derail the deal. This does not mean the attorney has to spend lots of time early-on; rather, the attorney should be a helpful advisor who helps progress the deal to success.

MergerPlace is pleased to have the esteemed Mr. Tom Taulli as the managing editor of our MergerPlace M & A Advisor™ E-zine.

Tom Taulli is an expert in the M&A process. He is the author of the critically acclaimed The Complete M&A Handbook (Random House) as well as six other books written for publishers such as Bloomberg and McGraw-Hill. Tom also teaches M&A at the USC School of Business.

Tom has been quoted extensively in the press, including the Wall Street Journal, USA Today, Barron's, and The Los Angeles Times, and has provided commentary on CNBC, CNN, and Bloomberg TV, as well as appeared on a variety of top radio stations across the country.

Tom's books are available for purchase in our bookstore.

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