In Shakespeare’s Henry VI trilogy, Dick the Butcher proclaimed "The first thing we do, let's kill all the lawyers" (depicted above seizing the Clerk of Chatham)...but the professionals at FourBridges disagree with Dick, particularly when it comes to eliminating experienced M&A attorneys (at least the ones who agree with our clients).
Owners/entrepreneurs have more options than ever for exiting or recapitalizing their businesses with Private Equity Groups or corporate development departments of corporate acquirers. Once your experienced investment banker (FourBridges, we hope) has secured a term sheet for your company and it’s time to proceed to closing, the games begin. The lawyers document the agreed-upon business terms to protect the interests of their respective clients. You can be assured that your acquirer/investor will trot a highly skilled position player onto the field, and so should you.
At this point legalese Bingo begins with debate of terms, such as “indemnification”, “baskets”, “reps and warranties”, “escrow”,” to the best of my knowledge”, and on and on. In the same way that you would not want a pediatrician to perform back surgery, you want to have an attorney who is familiar with the sandbox. Now just because the acquirer uses a New York law firm doesn’t mean you have to do the same, but the attorneys working on his behalf will assess the education, experience, and number of “Best Attorney” awards of their newly named adversary.
As much as successful entrepreneurs hate to hear it, there are certain rules that come into play when dealing with the big-money guys. We advocate the use of an experienced attorney who knows his job is to get a deal closed, but on reasonable and market terms. We think you need the hammer who can say to opposing counsel, “Look I just closed a deal with XYZ Private Equity Group; the things you’re asking for are out of market and you know it,”….. in a nice and non-deal-killing way.
You don’t stop using the general practitioner who’s kept you healthy all these years, and you don’t need to jettison the attorney who incorporated your firm and who has been a trusted advisor all these years. Just make sure he has the experience and knowledge of the market to perform a successful operation.
So we don’t agree with Dick the Butcher…at least not on the “all” part.