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Hiring a Lawyer to Sell Your Business

For the past few decades, most of my business law practice has focused on the purchase or sale of businesses, aka M&A. Assets and shares. Big and small. Please let me share some of my thoughts on this area for the consideration of business owners.

Selling your business is a tough, emotionally draining process. You’re proud of what you have built over many years; it’s your baby, but all grown up now. In your heart, you actually don’t want to sell, but perhaps you must sell for one or more reasons: your health, spouse’s health, age, weariness, new competitive pressures, bank “demarketing” your loan, and so on.

Most owners are not serial entrepreneurs, and selling is a last resort. You’ve grown the firm from the ground up, learning all the skills and doing all of the tasks needed to survive and thrive. Very often, owners don’t have a close working relationship with a lawyer or law firm, either because they’ve not had much need for legal advice or maybe because they’ve bounced from lawyer to lawyer for each legal matter or deal. Now, they realize they need a lawyer, and a damn good one, to get the deal done and protect their interests.

Purchasers and their legal counsel are more and more aggressive, and due diligence has become increasingly intrusive and microscopic – many because there is so much fraud going on in M&A transactions. And, the stakes are very high for the selling owner; the stakes couldn’t be higher. A mishandled deal can create significant ongoing financial or legal risks, or the deal may even fail to close at all.

So, how does an owner go about hiring their lawyer for this once in a lifetime deal? Here’s some ideas for owners about to hire a lawyer to sell their business:

First and very much foremost, hire someone who knows what the hell they are doing, ie, a specialist in M&A/business law, not a G.P. or dabbler in commercial transactions. Would you go to a handyman to install a new bathroom? A GP to carry out heart surgery? The day has long passed when lawyers can be generalists, things are just too complex and quickly changing. And, never hire a litigator to do a deal: they love to argue and polarize issues endlessly, or at least until you say “uncle” to the fees and delays.

Next, do some first-hand research: talk to a few lawyers after reading their website. Many will be happy to discuss their approach for an hour or more without charge.

Ask for referrals – from your CPA, your financial advisor, or other owners who have recently sold their businesses.

Understand that you will get what you pay for. If you hire a counsel with the lowest hourly rate, you will inevitably get lower expertise and maybe efficiency. If you hunt for the lowest fixed fee quote, good luck. When your discount lawyer hits the quoted amount, they will likely stop answering your calls or emails, devote their time to paying files or delegate your deal to an inexperienced junior lawyer or student. Law is a business.

Hire someone that you respect and trust, someone that you can get along with during rough times that will arise in a sale of a business that goes on for several months.

Hire someone who will not be a cheerleader or order taker, someone that will give you independent, practical, creative advice even if it’s not what you want to hear all the time. You have one chance at getting this right.

I prefer to do M&A work because it’s really interesting, every deal is different, and I am called upon to offer creative, practical solutions to thorny issues that arise – and something always does. It’s problem solving with a happy result – closing – after a few or several months of challenging questions and pressures. Hopefully, this article will assist you to engage an M&A counsel that will serve you well as a selling business owner.  Your comments are always welcome.


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