Whose Attorney Should Draft Documents, the Buyer’s or Seller’s?
Here's a story with a moral for anyone who plans or decides to buy a business, and it's all about going with the conventional approach.
You know us--at Calkins Law Firm we're ready and willing to break with convention when it's in the best interest of our clients. But sometimes the strength in having contrary opinions comes, not from outright rebellion, but from strategic decision-making. We aren't about turning left just because others go right. Instead, we take a long-range view when evaluating the best course of action.
For instance, in the mergers and acquisitions business it is customary (read: conventional) for the buyer's attorney to draft the letter of intent and the purchase agreement. But this convention isn't a mandate.
Some buyers may look at the situation and feel that the less work their counsel has to do, the less their eventual legal bill will be. For this and other reasons, they may agree if the seller prefers to have their counsel draft the documents. But we can attest to the fact that this reasoning is faulty, and things rarely work out that way.
Instead, the buyer's counsel will likely have to spend every bit as much time involved in getting documents drafted accurately by the seller or their counsel. They'll need to make sure that the agreement reflects the transaction as agreed to and that it provides relevant protections for their client.
All that said, and after all that time spent, it's probably unlikely that the buyer's counsel will be able to get the seller to make all of the desired revisions to their draft documents. In the end, what could have been an opportunity for a substantial advantage to the buyer could actually overlook key protections. And here's the worst part: the buyer's counsel will likely spend the same time or more than if they had drafted the documents themselves.
What's the moral of this story? Where legal convention gives you, the buyer, the opportunity to have your counsel draft the letter of intent, purchase agreement, or other relevant documents, by all means honor that convention. On its face the situation could look like it might cost you more in legal fees. But in reality, not only is it more likely that you'll actually pay less, but at the end of the day you'll get more protection by honoring a convention that's naturally in your favor.
Yes, it does take the buyer's counsel some time to draft a letter of intent, and even more time to draft a purchase agreement, but that buyer then gets a substantial leg up in the deal. Any subsequent negotiations for revisions fall entirely on the seller, and the buyer's interests remain protected.
At Calkins Law Firm we're carefully conventional and intentionally radical. When clients are set to benefit from following the established way of doing business, then we're the first to fall in line. But when typical practices threaten fairness, efficiency, access or basic decency, you can count us out. We are dedicated to seeing our clients' cases through, but we won't put anyone through the ringer to get them there. If you're looking to work with an honest and reliable legal team that's results-driven and ready to put in the work, reach out to us. We're ready to serve.