Your M&A Lawyer: Why You Need One, What They Do
If you’re planning to sell a business in 2022, you probably already know that you need the right team in your corner. A DIY approach to M&A is a recipe for absolute disaster, and one of the very best things you can do to ensure the success of a sale is to begin assembling your team now. The right business broker forms the cornerstone of your team, but your support doesn’t begin and end there. You also need a knowledgeable M&A lawyer. In most cases, that person is not going to be your in-house general counsel or contract review attorney. Instead, the process demands a specialist who knows the ropes of buying and selling. Here’s what you need to know.
What Does an M&A Lawyer Do?
M&A lawyers are specialists who support the sale, ensure it’s compliant with all relevant regulations, and advise you about how various deal terms might affect your profit from the sale. They also draw on their practical experience to help you make predictions for the future. For example, your M&A attorney can tell you if the earnout clause in your sale agreement is realistic, or if it is likely to give rise to a major dispute down the road.
Your M&A attorney must be prepared to look at your company with a critical eye, and let you know when you’re doing something that may undermine the sale. This can be difficult for an in-house attorney, who may be too heavily identified with your business and insufficiently experienced with the M&A process.
Why You Need an M&A Lawyer
Your M&A attorney wears many hats, and fills several critical roles. Those include:
- Advising you about compliance issues, especially in heavily regulated industries.
- Reviewing the contract for hidden material terms that could affect the ultimate value of the sale.
- Advising about how deal structure can impact the money you leave the deal with.
- Identifying inconsistencies in the buyer’s promises, or issues with the sales contract.
- Supporting the due diligence process to ensure oyu meet all of your legal obligations.
- Addressing issues of indemnification, such that you are not liable for what happens to the business after it sells.
- Protecting your personal assets such that they do not become wrapped up in the sale, especially if it goes south.
How an M&A Lawyer Can Increase Sale Value
Every player on your team has the potential to lend value to the deal. Your M&A attorney is no exception. They can generate additional value by helping you determine how deal structure may affect the money with which you walk away. This is especially important if the buyer doesn’t want to go higher on the asking price, or if they seek an earnout to minimize upfront payments. The right lawyer can also ensure your deal is legally compliant, preventing potentially catastrophic regulatory and legal issues down the road. And because they ensure you’re on the right legasl track from the beginning, they can also play an important role in preventing the deal from falling apart at the last minute.
