March 28, 2019 WelchGroup

From Lawyer to Advisor

After three years practicing as a transactional lawyer at a large international law firm I decided to make a career change. In January 2019 I joined the mergers and acquisition team of WelchGroup Consulting. In essence, I moved up the deal chain.

As a lawyer, I had lots of experience working with business advisors but did not understand the value that they bring to clients. To me, the broker was just making a couple of phone calls to find a buyer and then stepping aside. My perception could not have been further from what WelchGroup does for its clients.

This perception was due to the fact that lawyers are often brought into the transaction once a letter of intent has been signed or is at least nearly settled. They don’t necessarily appreciate the work that has been performed to get to that point of a deal. To get to this point the broker has worked closely with the client to understand the business that is being sold, the selling shareholder’s priorities, finding a pool of buyers that will ensure the seller’s priorities are met, and running a competitive bid process to find the best Buyer.

As many people who have been involved in the sale of a business can attest, there is often a sense of tension between the various professional service providers involved as everyone tries to demonstrate the value they provide. Having now worked as both counsel and an advisor I can say with confidence that both provide immense value to their clients and undoubtedly, this value is increased exponentially when counsel and advisors work collaboratively for their client.

So, how can advisors and lawyers work together more efficiently?

I think the most important thing is for both parties to respect the role that the other plays and the value they bring to their mutual clients. This can be achieved through an openness to learn and the preparation of learning resources that can be shared with one another. This will help the parties understand the role that each plays in ensure their client’s objectives are met.
In addition, the lines of communication should be open between the parties. Here at WelchGroup we believe our clients are best served by us acting as the project manager. That means we need to be aware of what is happening at all stages of the deal (to the extent it isn’t solicitor-client privileged information). This will ensure that no party is blind-sided at an inopportune moment.

Having worked as a lawyer, I also feel like the deal will run more efficiently if the lawyer is involved earlier in the transaction. They are often given an LOI and expected to draft a purchase agreement in a very short period of time. The challenge is that the LOI doesn’t give them a context of the negotiation or a fulsome understanding of the business that is being bought or sold. As a result, the purchase agreement cannot be sufficiently tailored to the deal. This results in unnecessarily negotiating representations, warranties, and other provisions that are not relevant.

Finally, roles should be defined early in the process. There are certain functions that can be better fulfilled by the advisor or the lawyer. It is important that the two don’t just assume the other will complete certain tasks. These assumptions result in items not being attended to in a timely matter and can result in added stress in an already high stress transaction or even deal delay. An example of this is the preparation of disclosure schedules. There are certain schedules that should be prepared by the lawyer while the lawyer will not necessarily have the information to prepare other schedules. For this reason, the lawyers, advisors, and client should set aside time to identify who will be preparing what schedule, when those schedules need to be completed by and who will be compiling the various schedules.

Always remember that you have the same client and it is your client’s interest that you are both serving. The lawyer and advisor are on the same team and a good team can provide immense value for their client.

Connor McGarry
Associate, Mergers & Acquisitions

Ottawa: 613.236.9191  |  Toronto: 647.288.9200
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