Negotiation Tip: Choosing the Right Attorney

M&A law is a discipline unto itself. There are firms that dabble, and then there are the experts.

Experts understand the intricate dance between buyer and seller that occurs during the negotiation and beyond. They know which “asks” are straw men, when to fold, and when to dig in their heels and stick to their guns.

Today, most M&A deals are highly structured and complex. All involve some form of guarantee and assumption of liability on the part of the seller. Because many are international, they often involve complex cross-border issues such as differences in government regulation, stock transferability, labor laws and currency control.   

Here at Corum, we have seen first-hand how an inexperienced attorney can kill a deal. You want an expert on your side - and you need to choose carefully. While your company attorney may be a trusted and familiar face, he or she is probably not the right choice. Nothing beats relevant sector experience.

Choosing the right attorney begins with your own preparation. If you follow Corum’s methodology, you will have a good handle on the likely size and nature of your transaction early in the process, which will be helpful in making your final decision.

Here are some of the most important questions you need to answer in order to help you choose the right attorney for your situation:

1.       Does the M&A attorney have a track record of having successfully executed similar deals in your industry, or related ones? Were the deals of similar complexity and size? Ask the attorney to describe the last couple of deals he or she was involved in closing and see if that experience is relevant.

 

2.       What is his or her approach to negotiating risk? What you’re trying to determine is whether the attorney is likely to hone in on the critical and most important terms and conditions (remember, straw men), or is he going to try and nail down every conceivable risk that can be imagined?  Ask the attorney to talk about the tradeoffs between risk and reward that they had to make in their last two or three M&A deals.

 

3.       What is the range of relevant capabilities (and bandwidth) in the firm? For example, does the firm have experienced patent, tax, international law and labor relations professionals in house, so that when it comes time to review the sale agreement you don’t need to introduce a new law firm?

 

4.       How’s the chemistry between you and the attorney?  Selling up or selling out can be a protracted and stressful experience. It’s often a bit of an emotional roller coaster with many ups and downs. Make sure that your attorney is used to that ride – even if you’re not.

 

5.       Don’t be reluctant to ask for references and do follow through.

 

Keep an eye here for more negotiation tips and what traps to avoid during the M&A process.

Posted by , Senior Vice President on 21 October 2016
What's My Company Worth?

 Subscribe

Recent Posts

Archived Posts