"What do you do if things are just not going well during the contract stages? You think the deal that you have been working on for weeks or even months has been going smoothly and you have even started fantasizing about how life feels after settlement, be it taking some time off from business or growing your new business as the new CEO/Director."
Yet out of nowhere the deal starts to feel a little shaky, and before you know it, there are multiple unresolved issues with the contract, lawyers 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 would say take a deep breath and relax, though what you really need is a simple effective solution.
The first thing to try to recognise (objectively) is how you got to this point. The process and flow of communication, contract terms, and context is always the culprit. Lawyers have a tendency to leave out a lot of contexts when negotiating on behalf of their clients.
When you find your deal is on eggshells, it is because there is a critical breakdown here.
Also, when the lawyers negotiate, the majority of their communication is written via email because they prefer that everything has an electronic record. By nature, an enormous amount of context is missed in emails.
So, what do you do? Honestly, it is so simple and almost embarrassing to write about as a blog post because it reads as being the most obvious course of action. However, you would be surprised that most sellers and buyers will not make it this far, and their deal will fall over. Admittedly, these steps may feel uncomfortable, though we PROMISE you, it will get your deal back on track faster than you can say “congratulations”!
Step 1
Arrange a meeting with both parties AND their lawyers present. Your lawyer may resist, and it might feel like you are pulling teeth to get them to agree to attend. Don’t worry, they will. You are their client, and they will do it if you instruct them.
Step 2
Prepare the agenda and any unresolved issues that need to be addressed.
Step 3
Don’t let anyone leave the room until all issues are resolved.
Sounds simple? It really is. We have revived so many deals that have been on the rocks for weeks and they are back on track in just a matter of hours.
There is a funny saying amongst Business Brokers:
“A lawyer doesn’t like to meet with the other lawyer because they are afraid they will solve the problem!”
That being said, you do need a kick-ass opening phrase to start the meeting off and make sure the scene is set positively. We like to use the following script:
“We are here to get this deal back on track and thank you for everyone’s commitment to making that happen today. Let’s remember that everyone is working towards the same objective which is a successful transaction on fair and balanced terms. Fair and balanced terms mean that some compromise is going to have to take place on both of our sides, in a fair and balanced manner. We are not going to get everything we want, and either is the other person – we are simply here because we would rather compromise on some issues than lose the entire deal.”
By the way, the longest we have been in the room is just 4 hours.
Good luck!
Daniel Kogan
(m) 0401 620 918
(t) (02) 8923 2632
Dan Levitus
(m) 0450 326 146
(t) (02) 8923 2632