The Mergers and Acquisitions (M&A) attorney is a very important team member during your transaction. If you have an M&A advisor, then I would say the attorney and the M&A advisor are the most important external team members. You need also a good CPA, but the attorney and the M&A advisor are more involved in the negotiation stage.
Some of the most important questions you need to answer in order to help choose the right attorney for your situation are:
- How’s the relationship between you and the attorney? If you have an M&A advisor be sure to involve them in selecting the right attorney.
- Has your attorney done deals of similar complexity and size? Ask for references and do follow them up.
- Does the law firm also have experienced in-house patent, tax, international law and labour relations professionals? This is important, because when it’s time to draft and review a sale agreement you don’t want to be introducing an additional law firm.
In my experience one additional question is very important: do you trust your attorney’s negotiating skills?
Typically start-ups have only a very small team involved in the negotiations. On the other hand, corporate buyers might assign larger teams to the deal. With more members on the table the buyer can appoint ‘bad guys’ and ‘good guys’ to the negotiating team: the ‘good guys’ explain, in a nice way, the reasons why the ‘bad guys’ cannot approve what you asked for. In this dance between your team and the buyer’s it’s very important that your attorney is able to defend your position in the best possible way across a broad range of topics. Your M&A advisor can be a great help in bringing the discussion to a fair and reasonable level too. Be aware, however, that as most discussions end up as clauses in the contract it’s always the lawyer who helps to nail down the final details.
There is one very important additional element in this dance: if you are not ready to walk away from the negotiations you may end up not signing the best possible deal. I’ll write a separate post about that topic in the future.