In the media and everyday conversation, Mergers and Acquisitions Law (call it “M&A” for style points) often gets lumped in with concepts like hedge funds and investment banking -- something strictly in the domain of Fortune 500 companies and Manhattan billionaires.
Despite the reputation, mergers and acquisitions is simply a segment of the law focused on protecting the interests of those involved in buying or selling a business. Quality mergers and acquisitions services add value to the purchase or sale of any business in a number of ways, but first and foremost is in bringing experience to the table, but in terms of deal experience AND what is market and customary for different types of deals.
Small and medium sized businesses make up the vast majority of businesses in the US, so most M&A work is with that segment of the market. Stock Legal is on a mission to make these services more approachable and accessible to businesses of all sizes. To assist you in this journey, we’re going to run through some of the growing list of questions we often get from new clients looking to buy/sell businesses.
Q: I don’t have a big business, why do I need a Mergers and Acquisitions lawyer?
A: Everyone buying or selling a business can benefit from good legal counsel. Many of us are small business owners ourselves. Business transactions can be complex, with lots of potential risks, liabilities and expenses hiding in the details. We bring value by ensuring that you end up with the transaction you are expecting, and counsel you through how to protect against those risks, liabilities and expenses. Our goal is that you go into the transaction with a clear view of what you are signing up for.
For business owners, your business will typically represent the sum of years or decades of hard work and sacrifice. Selling the value you’ve generated over those years calls for expert advice to ensure that you receive the full liquidity benefit of the business you’ve built.
For buyers of businesses, a wrong turn in purchasing a business can leave you holding the bag for a host of problems and liabilities that you didn’t create, or without the crown jewel assets you thought you were purchasing. Quality legal counsel is certainly warranted to ensure you’re getting what you expected with no unpleasant surprises.
Q: Can my family lawyer or CPA handle this?
A: No. Your family lawyer and CPA can be a great help, but you wouldn’t hire a dentist to do a knee surgery. For the same reason you need to use the right tools and professionals for the best outcomes. We’re happy to work with your existing professional service providers as we plan, negotiate and draft for your deal, but the transaction documents themselves benefit from a specialist touch . . . And that's what we’re here for.
Q: Can we make this a really simple deal?
A: We have no interest in making a deal more complex than it needs to be. Businesses are complex though - and the point of documenting your transaction is to accomplish the deal you want to accomplish, while allocating the risk and expense in the manner the parties expect. Often what appears to be additional complexity is simply risk management or precise language designed to avoid ambiguity and confusion. Please hear us say – ambiguity and confusion is what leads to litigation (expensive, time and energy consuming, and often unnecessary if the deal was done right in the first place).
If you want to see a genuinely complex deal, you should watch when we work to correct the consequences of poor transaction planning and risk management done by another professional. With our fixed fee M&A program, we explain exactly why we’re doing what we’re doing and make sure that you are comfortable with the level of complexity of the deal.
Q: I don’t want to scare the other party off. How do we avoid that?
A: We’re not that scary, and it’s important to us to treat everyone with respect, whether the other party is working with a big law firm or no lawyer at all. We also engage relationally with the primary goal of getting your deal done in the right way. On the other hand, If the other party is not willing to participate in a properly documented transaction, that is a huge red flag, and should cause you to consider if this is the right deal for you.
Q: Won’t it cost more than it’s worth?
A: That’s the beauty of the fixed fee program. We set your costs up front so you can make that decision and plan accordingly.
Please feel free to let us know if you have questions of your own about M&A services. If you're in the process of buying or selling a business, or have plan to head down that path, please don't hesitate to contact us to discuss our fixed fee and standard M&A services. The earlier in the process you bring on quality counsel the better — and we’re happy to talk to you to start planning this before you even have a buyer or seller lined up. We hope to hear from you soon.