Engagement Letter Language for an Attorney-Run Sale Process

Scope clause: name the phases

The scope section should describe the sale as a sequence of phases and state which the firm is undertaking. A documents-only scope describes outputs. A process scope describes work over time.

Illustrative starting point: "The Firm will assist the Client in preparing for, organizing, and conducting a process to sell the Company, consisting of the following phases: (a) discovery and readiness review, including an intake questionnaire and document request list; (b) preparation of a valuation range for discussion with the Client; (c) preparation of a confidential teaser and a confidential information memorandum, each subject to the Client's review and approval; (d) preparation of a prospective buyer list for the Client's review and approval, and coordination of initial contact with buyers the Client approves; (e) management of confidentiality agreements, data room access, and indications of interest; and (f) negotiation of a letter of intent, exclusivity terms, and definitive transaction documents through closing."

The clause should then list exclusions. Tax advice beyond the firm's practice, accounting and quality of earnings work, wealth planning, and valuation opinions for purposes other than the sale discussion are the common ones. If the firm will coordinate with the client's CPA and financial advisor, the letter can say so without taking on their work.

Decision authority clause: the client decides

This is the provision most standard letters lack, because in a traditional engagement the client's decisions have already been made by the time the attorney arrives. In a process engagement, the client will make dozens of decisions over several months, and the letter should state that each one belongs to the client.

Illustrative starting point: "The Client retains sole authority over all decisions relating to the sale, including whether to proceed with any phase, which prospective buyers may be contacted, what information may be disclosed to any prospective buyer and when, which indications of interest or offers to pursue, and whether to accept any proposed terms. The Firm will prepare materials, organize information, present comparisons, and advise on legal implications. The Firm will not make or communicate any decision on the Client's behalf without the Client's prior approval."

A second sentence on buyer contact is worth adding. Some firms will have the client make every initial contact personally. Others will send the teaser on the client's instruction. The letter should match the firm's actual practice, and the firm should confirm with its own counsel how the federal M&A broker exemption and applicable state rules bear on the practice it chooses. The federal statute includes specific limits, including restrictions on custody of transaction funds or securities, financing, dual representation without disclosure and consent, passive buyers, and binding a party. [1]

Fee clause: hourly, fixed, or phased, and never contingent

The fee provision in a process engagement should be set out by phase or by period and should state plainly that no part of the fee depends on whether a transaction closes or on its price. This is a drafting discipline and a posture question at once. The ABA Model Rule 1.5 provides a general reference point that the scope and basis of the fee should be communicated, preferably in writing, while local rules govern the firm's actual obligations. [2]

Illustrative starting point: "The Firm's fees for this engagement are [hourly at the rates set forth below] [a fixed fee for each phase as set forth below] [a monthly fee for the duration of the engagement]. The Firm's fees are not contingent on the completion of any transaction, on the identity of any buyer, or on the price or other terms of any transaction. The Firm will not receive any fee, commission, or other compensation from any buyer or any third party in connection with this engagement."

If the firm prices by phase, the letter should state the fee for each phase, when it is invoiced, and what happens if the client stops after a phase. If the firm bills hourly, a budget estimate by phase helps the client and gives the associate a planning target. A related article in this series compares the three models in more detail.

Software clause: what the platform does and does not do

The client will interact with the firm through a portal, and the firm will use software to generate materials, build a buyer list, and track the pipeline. The engagement letter should describe this plainly. It reduces surprise, supports the confidentiality discussion, and documents the line between what the software does and what the attorney does.

Illustrative starting point: "The Firm uses a software platform to organize documents, generate draft marketing materials from information the Client provides, identify prospective buyers from a database for the Client's review, and track the status of confidentiality agreements, indications of interest, and letters of intent. The Client will access a document portal maintained under the Firm's name for document requests, uploads, and disclosure approvals. The software prepares, organizes, matches, and tracks. All decisions and all communications with prospective buyers are made by the Client or by the Firm on the Client's instruction. The software provider does not advise the Client, does not contact any buyer, and receives no compensation tied to any transaction."

The clause should also address data handling: that client information is stored in an isolated environment, is not used to train models for other customers, and is subject to the firm's confidentiality obligations. If the firm's platform agreement contains specific representations on these points, the engagement letter can reference them.

Regulatory review clause: a statement, not a conclusion

The engagement letter should not contain a legal conclusion about the firm's regulatory status. It can and should state that the firm has reviewed its position and that the scope and fee structure reflect that review. This signals care to the client without creating a representation the firm would regret.

Illustrative starting point: "The Firm has reviewed with its own counsel the application of federal and state rules governing persons who assist in the sale of privately held businesses, including the federal M&A broker exemption, to the activities and fee structure described in this letter. The scope of services and the fee provisions above reflect that review. The Firm's role is limited to the legal services and process organization described herein, and the Client retains authority over decisions and buyer communications as stated above."

The federal statute is narrower than a general permission to conduct any sale-process activity. It applies to an eligible privately held company and excludes specified conduct, while state rules and other legal requirements remain separate questions. [1] A firm may prefer to leave the exemption unnamed and refer only to applicable rules. That is a drafting choice for the firm and its counsel. What matters is that the review happened and the letter does not overstate it.

Putting the letter to work this week

If your firm has a transaction engagement template, the fastest path is to add these five provisions to it rather than drafting from scratch. A partner can mark up the existing letter in an hour. Then send the draft to the firm's counsel and carrier for review before the first process engagement is signed.

Once the template exists, every new process client gets a letter that describes six phases, assigns decisions to the client, states a non-contingent fee, explains the software, and documents the regulatory review. That letter does more than protect the firm. It tells the client, on day one, that the firm has a method for selling the company and knows where its role begins and ends.

How Acquivo Pro fits

A process engagement letter describes work that Acquivo Pro is built to organize. The platform gives the firm one login for valuations across 21 industry verticals, teaser and CIM generation from the client questionnaire and data room, a prospect list tailored to the client from the platform's buyer database and documented acquisition criteria, and a single pipeline for NDA, IOI, and LOI flow across every client. The client sees a branded portal under the firm's name, and client data is isolated and not used to train models for other customers. Pricing is a flat monthly subscription per seat, with no per-deal fees. To walk through a process on a client you have in mind, request a demo through the Contact page.