How to contact an M&A law firm: what to have ready for the first call with a lawyer

Contacting an M&A law firm can feel daunting if you have never bought a business before. You may not know where to start or what the lawyer needs from you. The short answer is that the first conversation goes much better if you turn up with a handful of facts about the deal ready to hand. This guide covers what to prepare for that first call, what not to say, and how to approach the question of fees.

What to prepare before calling an M&A lawyer

Most M&A lawyers will not quote from a two-line email, and the reason is not awkwardness. The fee depends on the shape of the deal, and the shape of the deal is made up of the details below. The first thing you will usually do with an M&A lawyer, once you have made contact, is have a call to discuss your potential deal. If you want to maximise your chances of coming away with a quote for their services, have the following information with you.

M&A lawyer checklist: target, structure, price

• The name of the target company. The lawyer needs this to run conflict checks, to make sure they are not already acting for someone on the other side and can indeed act for you. Nothing else happens until that is cleared, so have the exact registered name rather than a trading name if you can.
• Share purchase or asset purchase. Whether you are buying the company itself or just certain assets from it. If you are not sure yet, say so, but it changes the shape of the work, the documents that need drafting and the due diligence that needs doing, so the lawyer cannot quote properly without knowing. My guide to share purchase vs asset purchase explains the difference.
• Whether the target is part of a group. Is the target a subsidiary, or a holding company that owns other subsidiaries? Group structures add work, because there may be more than one company to investigate and more than one set of records to review.
• The estimated target completion date, if you have set one with the seller.
• The turnover of the target business and how many employees it has. These give the lawyer a sense of the size and complexity of the deal. A business with two employees and one with two hundred are very different pieces of work, even if the price is similar.
• Whether the target is regulated by any regulatory body. Regulatory approval can affect both the timetable and the work involved.
• Whether you have other professional advisers on your team, for example accountants who will help with the financial due diligence.
• The estimated purchase price and how it is to be calculated. For example, is it a locked box, meaning you know exactly what you are going to pay, or is it going to be based on completion accounts? I explain both in locked box vs completion accounts.
• How you are funding the purchase price. And if that is by borrowing, whether you have secured that funding already. A lender will have its own requirements and its own lawyers, and that affects the timetable.
• Any other details about the structure of the deal. For example, whether there is an element of deferred consideration or an earn-out. These need drafting carefully and are often where the negotiation happens.
• How many sellers there are, and whether they are going to remain in the business after completion or exit on the day.
• As a bonus, whether you would like to change the company's articles of association, its accounting reference date or its directors on completion. These are typical post-completion changes and it helps the lawyer to know about them up front, because they can be dealt with in the same set of completion documents.

Having this information does two things for you. First, it gives the lawyer a good impression of how serious you and your potential deal are. Second, it gives them enough to actually quote for their services, rather than coming back with a list of questions. In my experience, a buyer who can answer most of these on the first call gets a clearer quote and a faster start.

What not to say to your M&A lawyer

What should you avoid saying on that first call? In my experience it is a particular combination of things. You might not want to tell the lawyer, all at once, that you are price sensitive, that you want to negotiate their fees heavily, and that you only want to pay if the acquisition is successful, while also mentioning that you have never bought a business before.

The reason is simple. Put together, those statements give the lawyer the impression that they are being asked to take on a high level of risk, because they only get paid if a deal goes through and the person driving it has not done this before, in exchange for a low level of reward, because you want their fees kept down. That is not an attractive proposition for any adviser, and it tends to colour how the conversation goes from there. None of the individual points is unreasonable. It is saying all of them together, before the lawyer knows anything else about you, that creates the problem.

How to negotiate lower M&A legal fees

None of this means you have to accept whatever fee is put in front of you. If you are worried about legal fees, and in particular about paying for work on a deal that then does not complete, raise it in a way that shares the risk rather than shifting it entirely onto the lawyer.

The option I would suggest discussing is a lower base fee for their services, combined with a success fee that becomes payable if the deal goes through. The lawyer is paid something for the work regardless, you pay less if the deal collapses, and both sides have an interest in getting to completion. That is a far easier conversation than asking for the fees to be cut and made conditional at the same time.

Next steps

Before you pick up the phone, write down the answers to the checklist above, even where the answer is "not decided yet". Then contact an M&A lawyer and ask for an initial call to discuss the deal and get a quote. If you want to understand the whole process you are about to go through first, read how M&A deals work and how to buy a business in the UK.