In Buying or Selling a Business, Have Your Lawyers Protect Without Doing Harm

As far as grammar goes, “lawyer” is just a noun. In practice, though, the word comes with heavy baggage and associations that go way back in time, as seen in this quote in Voyager, by Diane Gabaldon.

“Has he come armed, then?” she asked anxiously. “Has he brought a pistol or a sword?”

Ian shook his head, his dark hair lifting wildly in the wind. “Oh, no, Mam!” he said. “It’s worse. He’s brought a lawyer!”

Kidding aside, not all lawyers are adversarial. When it comes to successfully buying or selling a business, that’s the last thing you want your advisers to be.

In selling or buying a business, it’s important your lawyers protect without doing harm.

It may happen that your lawyer, attempting to ensure you understand every risk and downfall that may happen, recommends unreasonable actions to minimize what they see as risk. Many sellers and or purchasers have been scared out of a transaction that would have been good for them. Remember: your lawyer is not the buyer or the seller of the business. You are. You are making the decisions and there is no transaction that is risk free.

The decisions related to risk often have available solutions that bring risk into tolerable levels for both parties. These won’t be part of the equation if the lawyers see each other as adversaries and potential synergies will be missed.

Imagine a teeter-totter with the buyer’s lawyer at one end and the seller’s lawyer at the other. Each side is pushing hard at the same time, trying to get risk down to ground. If both sides press hard enough, the teeter-tooter will break.

The adversarial system does not result in win-win solutions

Your broker can help to find a balance that keeps the risk to an acceptable level for both sides. You must tell your lawyer on what terms you are prepared to do the deal. Don’t let them do you a disservice by “pressing down” and scaring you. They believe it to be their job to make you aware of all these risks. However in my experience, they are often prepared to kill deals over risks that are likely never to occur and often provide business advice that they are not qualified to give.

Fortunately, many lawyers are prepared to work with brokers to find solutions that create synergy, achieving the goals for both buyer and seller.

In the end you’re the judge, you make the decision, you control your destiny. And if you operate on the principle of truth, you are far more likely to achieve your goals in an honourable way.

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Gregory Kells
Articles: 89