By now your terms sheet has been finalised between you and the buyer, and you are ready for the contracts to be drawn up. When it comes to choosing a solicitor, we have 2 simple rules to follow.
1. Can they get the work done at the specified time?
There is a saying in our profession “time is the killer of all deals”.
The contract stages should take between 4-6 weeks, and the people who are going to affect this time frame for better or worse are the solicitors.
Your Solicitor should be able to provide a draft contract to the purchaser within 1-2 weeks maximum, from the time they have received the term sheet. We know a lot of solicitors that can have a basic contract within 48 hours.
Before you engage your solicitor it’s a good practice to ask for their confirmation that they are satisfied with the time frame and that there is nothing that would prevent them from meeting the time frame specified.
We have seen a lot of business sales drag on and delayed by solicitors because they simply have too much on their plate.
2. Have they counseled a similar transaction?
Experience goes a long way when it comes to completing a successful deal. It’s important to choose a solicitor that will have the experience and track record in completing similar deals. They will be able to see where to press and where to compromise, whilst balancing the interests of the deal with reasonable contractual obligations.
If the transaction is simple, there is not much value in using a solicitor versed in corporate and high-value transactions.
Equally, if the transaction is high value perhaps a standard Law Society template sale of a business contract will not be appropriate.
Before you engage your solicitor formally, take 5 minutes to vet them and make sure they are suitable in context with the nature of your transaction.
There is another saying in our industry “don’t let lawyers get in the way of a good deal”.
Just like any professional service – some are terrible, and some are utterly brilliant, so don’t be afraid to choose carefully.
Next week
So what do you do if you things just are not going well with contracts and you reach a point in the contract stages where solicitors are not making progress, arguments seem to be going sideways or backward, and all of a sudden it feels like the deal is on eggshells?
We’ve got some great tips and are experts at getting the deal back on track!
As always if you need assistance with your transaction, send us an email:
Daniel Kogan
(m) 0401 620 918
(t) (02) 8923 2632
Dan Levitus
(m) 0450 326 146
(t) (02) 8923 2632