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Faites Attention: Famous Last Words

When you hear these phrases, think twice before committing yourself in a proposed business deal:

“You don’t need your own lawyer for this, it’ll just complicate things … we have to get this signed right now…”

“This is a friendly deal, getting a lawyer will kill the deal.”

“I’ll sell you my shares” or “I’ll do this or that…but I can’t/won’t put it in writing, we can just agree to do it.”

“We don’t have time to send this to the lawyers; we can clean it up afterwards.”

“We want to keep this deal simple.”

“But he/she said it was OK if the contract said that; they promised…”

“I know you advised me not to do that, but I thought it would be alright because…”

“We can’t put this in writing … don’t you trust me?”

“I thought his lawyer was acting for me too…”

Some Things Successful Deal Makers Do

As my bio on this website indicates, I was trained at an excellent mega-firm on how to do mega-deals, and I constantly try to adapt those principles to small business deals where feasible. Here are some of the principles that sophisticated large deal-makers follow with their solicitors as a matter of course:

1.      Hire your own lawyer: Only your own qualified lawyer can and will protect your interests.

2.      Get your lawyer involved early: Consult with your counsel before the deal is negotiated to flush out crucial issues and answers, before mistakes are engraved in stone.

3.      Trust your lawyer fully: Fully inform your lawyer at the outset to ensure they get the big picture and the details early. Provide documents, facts, documents and contact info ASAP, so he can hit the ground running for you. Admit problems and mistakes to avoid ambushes.

4.      Let your lawyer do the talking: Once the parties have their lawyers involved, channel all communications thru your lawyer, except where expressly agreed otherwise. This protects your deal strategy and prevents missteps.

5.      Details matter: The devil is in the details, always. Pay attention to factual and legal details. Make notes in a chronological diary to ensure follow-up. Use checklists and diarize deadlines. Read every document, word for word, at least once, and then review all later changes to drafts.

6.      Make timely decisions: When you have the background info and advice on a question, make the decision and stick with it unless material facts change.

7.      Follow advice given: Follow the legal, tax and accounting advice that is provided to you by your team of advisers, or fire the adviser if you don’t have confidence in them anymore.

8.      Understand the bottom line: Before negotiations start, determine your bottom line: min or max price, key terms, timing, key employees, etc., so negotiations and your positions will stay on track. Ad hoc-ery is risky business.

9.       When you have leverage, use it: Consider what you want from the other side in negotiations, and use your leverage to get it at an appropriate time.

10.    Know when to fold’em: Some deals just shouldn’t be done, at any price. Know a deal-killer when you see it: some things can be fixed or explained, some cannot. Integrity is an example – if you do a deal with the devil, you’re goin’ to get burned.


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