How to Choose an M&A Lawyer Who Won't Kill Your Deal

When acquiring businesses, if you want to alienate the seller, triple the legal fees with unnecessary complications, and get scared out of buying good companies, hire the wrong lawyer.

Eric Hsu joined us at the Business Acquisition Summit to show us how to avoid exactly that. Eric's an exclusively buy-side M&A attorney who's closed dozens of deals worth $60M+ in total revenue. His opening line caught our attention immediately:

"Lawyers are like dogs."

The full story:

Why Most Lawyers Are Deal Killers

Eric didn't mince words. According to him - and he's been practicing law for 25 years - most lawyers are either Dobermans or Chihuahuas.

Doberman lawyers aggressively guard your interests but drive away even friendly parties through fear and intimidation. They see every clause as a battle to be won, every negotiation point as a hill to die on.

Chihuahua lawyers are equally aggressive but accomplish the same deal-killing result through sheer annoyance. They nitpick every comma, create problems where none exist, and exhaust everyone involved in the process.

The lawyers you actually want? They're like standard Poodles - strong, loyal, protective, but they know how to get along with people.

The problem starts with who becomes a lawyer. As Eric pointed out, people often say things like "I want to go to law school because I love to argue" or "My parents say I have a strong personality and would make a great lawyer."

Do you really want someone who loves to argue handling your business acquisition?

Then consider how lawyers are rewarded throughout their careers - for being aggressive, for fighting, for winning at all costs. It's no wonder they become the number one risk to your acquisition deals.

The 6 Non-Negotiable Traits of Deal-Closing Lawyers

Here's what Eric says you should look for instead:

1. Niche Expertise

You wouldn't want a general practitioner performing heart surgery. Don't hire a generalist lawyer for your acquisition. You need someone who specializes specifically in buy-side M&A work - not someone who "dabbles" in business transactions between divorce cases and speeding tickets.

2. Deep Experience

Look for lawyers who've closed at least 20-30 similar deals. If you're considering someone newer, make sure they're supervised by an experienced practitioner. Your acquisition isn't the place for someone to learn on the job.

3. Clear Communication

Your lawyer should explain complex concepts in language you understand without making you feel stupid for asking questions. If you're Googling legal terms after every conversation or turning to ChatGPT to decode their emails, you've got the wrong lawyer.

4. People Skills

In SMB acquisitions, relationships drive deals. Your lawyer needs to understand that this isn't a hostile corporate takeover - it's often a deeply personal transition for a founder who's selling their life's work. One lawyer with poor people skills can destroy months of relationship building in a single phone call.

5. Problem-Solving Mindset

Law school teaches lawyers to identify risks and problems. It doesn't teach them to solve those problems creatively. You need someone whose default mode is "How can we make this work?" not "Here are 47 reasons why this is risky."

6. Deal Focus

Most lawyers are trained to eliminate risk at all costs. But here's the truth: the only way to eliminate all risk in an acquisition is to not buy the business. You need a lawyer whose primary focus is closing the deal with calculated risk management - not killing it to protect you from every conceivable problem.

Where to Find These Unicorn Lawyers

Forget asking family and friends for referrals. As Eric explained, that's like asking your neighbor if they know a good left ventricle bypass specialist. Instead, look in these places (in order of priority):

1. Other M&A Professionals: Ask CPAs who specialize in acquisitions, SBA loan brokers, and business brokers who they've seen do excellent work.

2. Other Acquisition Entrepreneurs: Join communities like Searchfunder.com, SMB Twitter, or Search Fund Coalition. Ask who they've used successfully.

3. Virtual Communities: Look for lawyers who actively share content and demonstrate their expertise online. If they're creating valuable content about acquisition topics, they probably know their stuff.

4. Targeted Online Search: If you must use Google, search specifically for "buy-side M&A lawyer" or "small business acquisition attorney" - not just "business lawyer."

Your Due Diligence Checklist

Once you've identified candidates, Eric recommends this evaluation process:

• Check their online presence: Red flag if they don't have a LinkedIn profile or website in 2024

• Verify their specialization: Does their website match what they claim? Or do they also advertise divorce law and traffic tickets?

• Interview them thoroughly: Ask about their deal experience, communication style, and billing practices

• Request references: Talk to other acquisition entrepreneurs who've used them

• Test their approach: Present a hypothetical problem and see if they're a problem-solver or problem-creator

The Bottom Line

You have 100% control over who you pick as your buy-side lawyer. Eric even suggests you have about 70% influence over who the seller chooses (through recommendations and relationship building).

Don't let the wrong lawyer kill your deal. Take the time to find your "standard poodle" - the lawyer who combines expertise with people skills, protection with problem-solving.

Because at the end of the day, the best acquisition in the world isn't worth anything if your lawyer chases it off.

Action Step: Before your next acquisition, interview at least three M&A lawyers using Eric's framework. Ask each one: "Tell me about a deal that almost died and how you saved it." Their answer will tell you everything you need to know.

Thanks for reading Acquiring & Exiting.

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