M&A Monday: How to Take Full Advantage of Your M&A Lawyer
Your M&A Lawyer will be the most important aspect of your transaction
As a buyer or seller, there is no decision that will impact your transaction as much as your M&A lawyer. Your lawyer can either make you hundreds of thousands of dollars or lose you that amount. Your lawyer will spot risks or miss them, and will get your deal closed or drag it out until it dies.
Your M&A lawyer is the most consequential decision of your deal.
This post is not about how an M&A lawyer helps structure and negotiate your deal, but all the other ways an M&A lawyer can support a buyer or seller throughout their deal.
An M&A lawyer should and can be much more than someone who drafts and negotiates legal documents.
While some sponsors may have closed a handful of acquisitions, an M&A lawyer (should) have done hundreds.
In addition to a sophisticated knowledge of M&A law and the market terms, a client can rely on his or her lawyer for the following:
1. Reputational Benefits. I often join calls with the seller’s broker, investors, or debt sources. A lawyer who can present as reasonable, experienced, and sophisticated image will engender trust and a positive impression. The lawyer's presence is especially important for a less experienced sponsor. I have found that when I am invited to pre-LOI introduction calls, we are much more likely to win the deal and get it under LOI.
2. Network. Lawyers have great networks they are happy to share with clients. I regularly make introductions to debt, limited partner equity sources (ping me if you want me to add you to my LP/debt sources list), source potential operators, or on more rare occassions find buyers or sellers.
3. Referrals. Lawyers have a network of vetted referral partners created over years of deals. Lawyers will be able to refer you to other good lawyers, but also accountants, and diligence providers.
4. Deal Psychologist. I started out majoring in psychology. When I switched to business management, then law, I never thought I would psychologically counsel clients, but that is the job of an M&A lawyer. My clients go through an emotional rollercoaster during a deal and it is my job to help them through it.
Sometimes they need to be told they have what it takes. Sometimes, I help them put the challenge in perspective, and sometimes I just empathize. I encourage calculated sponsors to take risks and risk-takers to be more calculated. Sometimes we discuss the challenge of entrepreneurship on the family and sometimes I have a call with the client and their husband/wife to set them at ease.
Each Monday I post one lesson buyers or sellers of a business should know. I learned these tips representing top private equity groups and working with some of the best M&A lawyers in the world. These are tips that can and should be applied to independent sponsors and searchers. DM me if there is a topic you want me to cover or if you have any questions.
