One of the big differences between the fixed fee M&A services and traditional services is the role and participation of the client in the transaction. While the deal process necessarily involves factors that we can’t completely control, the Stock Legal Fixed Fee M&A program is designed to keep the business owner involved, informed, engaged, and instrumental as a part of the deal team.
In the traditional approach to M&A work, the deal team, usually headed by a lawyer, coordinates, and oversee the entire transaction, negotiation, diligence, contract reviews, and financial reviews. While the client is consulted, they are often not deeply involved in the day-to-day deal work. These things take a lot of time and attention and required deep knowledge of all aspects of a business’ structure, ownership, operations, and history. This model works well and is even necessary for large transactions. In businesses that are valued over $25M, there is typically no one person with expertise in all aspects of the business’s life and the knowledge of where how to find, access, and tell the story of the business in a way required in the transaction process.
This is often not the case with small to mid-market transactions. Small and mediums sized business owners tend to have a much smaller circle of key personnel – and are almost always informed and knowledgeable on all aspects of their businesses. They have access to everything and are usually at most one phone call removed from access to any information needed to move the transaction forward.
There is a lot that goes into a business sale and many roles to play in getting the transaction planned and executed correctly. Not all of it needs to be directly handled by the legal team. By way of example, gathering and assembling disclosure documents required in multiples stages of the transaction, can be an extremely time consuming, and at a lawyers hourly rate, extremely expensive. Owners who want to be involved in the deal team can move the needle on efficiency and cost savings significantly.
So what’s the role of the client in the transaction? Our Fixed Fee M&A program allows the business owner to continue in the role they are most comfortable in — coordinating and integrating the activities of their team. During the transaction, that role will expand to include actions like, retrieving and assembling disclosure information, reviewing updating customer and vendor lists.
In taking on these responsibilities, the client becomes an active participant of the deal team, bringing knowledge and experience into the development of the transaction rather than just being consulted on deal points.
In our experience, this is where the client in small to middle market M&A transactions stands to gain enormous value. By participating more fully in a transaction and by allowing the deal team to leverage the owners experience in all aspects of planning, the owner gets a faster, more efficient transaction that more accurately reflects the desire of the owner, than would be possible in a transaction carried out entirely by outside lawyers. To learn more about our Fixed Fee program and to find out whether it’s right for your business contact Stock Legal today.