October 8, 2012
Great attorneys—attorneys with clients who think they are “great”—have a knack for understanding and emphasizing what’s really important to their clients and pulling the most sensitive and emotional issues out of the mountain of materials that inevitably creep into transactions, litigation or other projects.
One good example is when the attorney is representing a client who has decided to sell his or her business and has agreed to stay on with business after the deal closes. Obviously the attorney needs to understand the entire process of this type of transaction including due diligence, negotiating the letter of intent, drafting or reviewing the sale and acquisition documents, regulatory conditions to closing and tax consequences. All of these activities are part of being a “good” attorney and can generally be developed with experience and close attention to the details of transactions that the attorney participates in as he or she moves forward with the practice of law. However, the trusted business counselor is the attorney who focuses on how life will be for the client after the deal is done and this means carefully negotiating and reviewing post-closing employment agreements, non-competition agreements, earn-out provisions (if a portion of the consideration is to be paid after closing based on the future performance of the business) and the procedures that are to be in place regarding management of the business once the sale is completed.
Many buyers are reluctant to go into too much detail about these documents until the letter of intent has been signed and the letter of intent itself will provide little guidance other than “standard terms” and provisions to be “mutually agreed upon.” The business counselor will aggressively push for all issues regarding “the morning after” to be laid out on the table so that the parties can discuss and hopefully resolve any problems before too much time and expense is wasted on fiddling with documents for a marriage that may not work.