Is Your Firm Ready to Run a Sale Process? A Self-Assessment for M&A Attorneys

Area one: do you have the clients?

The first question is whether the firm already represents owners who will sell in the next three years. The answer may be yes, and the exercise is to name them.

Go through the firm's business clients and sort them by three signals. Owners over 58 with no family successor. Companies that have received an unsolicited letter from a buyer in the past year, which the attorney often knows about because the owner forwarded it. Companies with a shareholder dispute, a partner retirement, or a recent estate planning engagement that raised the question of what the business is worth.

A firm with twenty owner clients might find four to six in these categories. Treat that as an internal planning hypothesis, not a benchmark. Those are the pipeline. The firm does not need new clients for this exercise. It needs to reach these clients before a banker or a buyer does.

Three questions to answer in writing: Which five clients are most likely to sell within three years? Which of them has already received a buyer's letter? Which of them has the firm spoken to about a sale in the past twelve months?

Area two: do you have the team?

An attorney-run sale process needs three roles, and in a small firm they map to three people.

The partner owns the client relationship and every decision conversation: the valuation review, the buyer list approval, the IOI comparison, the LOI negotiation. The partner also edits the CIM for emphasis and disclosure. This is perhaps 50 to 70 hours across a full process, concentrated in the valuation, offers, and negotiation phases. Treat the hours as an illustrative staffing scenario that the firm should test against its own matters.

The associate manages the data room, reviews NDA markups, handles buyer questions during the offer phase, edits the CIM for accuracy, and drafts the purchase agreement. This is the largest block of hours and the role that benefits most from a process being organized in one place rather than across an inbox.

The paralegal sends the questionnaire and document request, tracks uploads, maintains the pipeline and staged data room access, and prepares the weekly status report. This role is the difference between a process that runs on schedule and one that drifts.

Three questions: Does the firm have one partner who will commit to running the first process end to end? Does that partner have an associate who can carry the data room and buyer communications for twelve weeks? Is there a paralegal who can own the pipeline?

Area three: can you scope and price it?

The engagement letter for an attorney-run sale covers six phases, not one, and the firm needs a letter it is comfortable sending.

The letter should describe each phase, what the firm does in it, what the client decides at the end of it, and how it is billed. Hourly billing works for the readiness and negotiation phases, where hours vary with the state of the company and the buyer's counsel. Fixed fees work well for the valuation and marketing materials phases, where the work is bounded and the client values predictability. A phased structure lets the client stop after the valuation if the range does not solve the client's problem, which is a feature the client may appreciate.

The letter should state that the firm's fees are not contingent on a transaction closing and do not vary with the price. It should also state that the client makes every decision about which buyers are contacted and which offers are pursued.

Three questions: Has the firm drafted a six-phase engagement letter? Has the firm decided which phases are hourly and which are fixed? Can the firm give a prospective client an estimated total cost for the full process, by phase, before the client commits?

Area four: have you confirmed your regulatory posture?

This area is the one where the firm must do its own work and must not rely on a vendor, an article, or a peer's practice.

The firm should confirm its own position with its own counsel on how the federal M&A broker exemption and state rules apply to the activities it takes on and the fees it charges. The federal statute defines a broker generally as a person engaged in effecting securities transactions for the account of others, and it sets conditions for the M&A broker exemption. [1] The activities that matter include whether the firm contacts buyers directly, whether it negotiates on the client's behalf before an LOI, whether it ever handles funds, and how it describes its services to clients and the public. The fees that matter include whether any part of the firm's compensation depends on whether a transaction closes or on its size. State rules and the facts of the engagement can change the analysis.

The posture some firms adopt is that the attorney advises, the client decides and acts, every buyer contact is one the client authorized, fees are hourly or fixed, and software prepares, organizes, matches, and tracks without intermediating. Whether that posture is sufficient for the firm's specific plans under the rules that apply to it is the question the firm's own counsel answers in writing.

Three questions: Has the firm obtained written advice from its own counsel on the activities and fees it intends to take on? Does the engagement letter reflect that advice? Does every attorney and staff member who will work on a process understand what the firm does and does not do?

Area five: can you produce the artifacts?

Production is the area where many firms have historically stopped, and the area where software may change the operating model.

A sale process requires a valuation the client can review and the attorney can defend, a blind teaser, a CIM, a buyer list of qualified acquirers with recent activity in the vertical, and a pipeline that tracks every NDA, IOI, and LOI. These artifacts appear in real transaction work. FTC merger-filing instructions, for example, identify confidential information memoranda and transaction agreements such as letters of intent and purchase and sale agreements, while a filed letter of intent shows how diligence and definitive documents can remain conditions to closing. [2] Without an analyst pool, a firm could not produce these at a cost a client would pay. With software that generates each artifact from the client's questionnaire and data room, the firm's job is to review, edit, and approve rather than to build.

Three questions: Can the firm produce a valuation range for a client within two weeks of receiving financials? Can it produce a CIM draft for the attorney to edit without an associate spending three weeks writing one? Can it build a buyer list that reaches private equity platforms and strategic acquirers the client has never heard of? If the answer to all three is no, the firm has a production gap and should address it before signing the first engagement.

Scoring and the first engagement

Count the areas where the firm answered yes to all three questions. Four or five means the firm can take the first engagement now. Three means the firm should close the gaps, usually the engagement letter and the regulatory confirmation, before proceeding, and both can be done in a month if the firm assigns owners and a deadline. Two or fewer means the firm should start with the pipeline exercise in area one, because the clients are the reason to do the rest.

The first engagement should be a client the firm knows well, with clean financials and an owner who trusts the partner, not the client with a buyer's letter and a two-week deadline. The one thing a firm can do this week, regardless of score, is the pipeline exercise: list the five clients most likely to sell, and schedule a conversation with one of them.

How Acquivo Pro fits

Acquivo Pro addresses area five directly. On one login the firm runs valuations across 21 industry verticals from a deterministic engine whose figures trace to their source, generates teasers and CIMs from the client questionnaire and data room, builds a prospect list tailored to each client using buyer criteria, and manages NDA, IOI, and LOI flow for every client in a single pipeline. The client sees a branded document portal under the firm's name, and one seat on a flat monthly subscription runs multiple concurrent processes with no per-deal fees. Software prepares, organizes, matches, and tracks; the attorney and the client decide and act. To walk through a process on a client you have in mind, request a demo through the Contact page.