The Economics of an Attorney-Run Sale for the Client and the Firm

What the client pays under the traditional model

Consider an illustrative client with $4 million of EBITDA whose business might sell for $28 million. Under one traditional model, the owner engages an intermediary on a success fee, sometimes with a retainer credited against it, and separately engages the attorney for the purchase agreement, disclosure schedules, and closing. The intermediary's fee is calculated as a percentage of the transaction value and is paid at closing. The attorney's fee is hourly or fixed and is paid as incurred. Fee terms vary by engagement, so the comparison should use the actual proposed engagement letters rather than an assumed market rate.

The owner experiences this as two costs. The first is large, visible at closing, and tied to the price. The second is smaller, spread over the final months, and tied to the documents. Owners may not compare the two because they arrive at different times and look like different kinds of expense. A partner can put both on the same schedule: estimated transaction value, intermediary fee formula, attorney scope, expected timing, and the amount the owner would retain under each illustrative case.

For clients below the size or complexity at which a full-service banker is a fit, the traditional model may still leave a gap between the process the owner wants and the resources the engagement provides. That is a question of scope and staffing, not a universal result. The attorney should identify what the intermediary would actually deliver, who would contact buyers, and which work remains with counsel before comparing economics.

What the client pays under the attorney-run model

Under the attorney-run model, the same firm takes responsibility for the agreed process. The fee is hourly, fixed, or phased, and it is set against the work: discovery and readiness, valuation, marketing materials, buyer matching and outreach, offers, and negotiation through close. There is no separate intermediary in the model described here, and the firm's compensation is not contingent on whether the business sells. The client is buying defined judgment and effort, not a share of the outcome.

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. Federal law defines an M&A broker exemption for specified transactions involving eligible privately held companies and sets conditions that include financial thresholds and other requirements. [1] The SEC's earlier no-action letter described a fact-specific relief framework and expressly cautioned that different facts and circumstances could produce a different conclusion. That letter was withdrawn in 2023, so it should not be treated as current legal advice. [2] Within whatever counsel concludes, a phased fixed-fee structure can be clear for the client. An illustrative structure might be a fixed fee for preparation and marketing, a second fixed fee for the offer phase through LOI, and hourly or fixed billing for diligence and closing as the firm would charge on any transaction. The client sees three numbers, knows what each buys, and can stop after any phase.

The arithmetic for the client is a comparison, not a promise of savings. On a $28 million illustrative sale, calculate the proposed intermediary fee using the actual percentage and compare it with the firm's proposed fees for the same scope. The result may be a smaller total, a larger total, or a different distribution of cost over time. The client's CPA will want the assumptions and the treatment of expenses stated plainly.

What the firm earns, and when

The firm's economics change in timing and in scope. In the traditional model, the firm may bill for negotiation of the LOI, diligence, and closing. Those are substantial fees, but they arrive late and depend on a process the firm did not control. If the intermediary's process stalls or the buyer walks, the firm's engagement may stall with it.

In the attorney-run model, the firm bills from the first conversation if those services are within the engagement. The preparation phase, which includes the questionnaire, the readiness review, the valuation discussion, and the CIM edit, is billable work that previously went to someone else. The marketing and offer phases are also billable work if the client has engaged the firm for them. The closing phase is familiar, and the firm can plan it with the documents and data-room structure it has already reviewed.

Partner time is the constraint. A firm should expect partner involvement to be heaviest in the valuation conversation, the buyer list review, the IOI comparison, and the LOI negotiation. The rest can be assigned among associates and paralegals according to competence, supervision requirements, and the engagement letter. A quantified staffing plan is illustrative, not a measured Acquivo result. The partner should price review time, escalation time, and client meetings instead of assuming that software removes professional work.

The cost of production, and what software can change

Sale-process production has several labor-intensive components: building a valuation, writing a CIM, assembling a buyer list, and tracking NDAs and IOIs across that list. A small firm may not have a dedicated transaction team for every client. The practical question is whether repeatable preparation and tracking work can be organized without reducing attorney review to a formality.

Software can reduce manual production work by generating a teaser and CIM from a questionnaire and data room, building a prospect list using client information and documented buyer criteria, and tracking NDA, IOI, and LOI flow in one pipeline. The attorney and client still review the source information, decide what to disclose, select contacts, and make every buyer contact. The firm's cost becomes a combination of subscription overhead, review time, supervision, and the work that remains outside the platform.

That distinction matters for pricing. A partner can model a monthly seat cost, expected review hours, associate and paralegal time, and the number of concurrent client processes the team can supervise. The model is a capacity estimate for the firm's own management committee. It is not a promise that every engagement will cover the software cost or produce a particular margin.

Explaining the model to the client

The owner will ask why the firm's fee is not tied to the price, since that is what an intermediary may offer. The answer should be specific to the engagement: the firm is charging for defined work and judgment, and its compensation does not change with the sale price or whether the transaction closes. That structure lets the client evaluate advice to sell, pause, or wait without treating the firm's fee as an automatic percentage of the outcome.

The owner may also ask whether the firm will work as hard without a success fee. The partner should answer with the engagement scope, staffing plan, reporting cadence, and deliverables. A fee structure is not a substitute for a competitive process, careful buyer qualification, or sound negotiation. The client should know who prepares the teaser and CIM, who reviews the buyer list, who sends or approves outreach, who compares IOIs, and who negotiates the LOI.

A partner can put this in a one-page fee memo: the three phases, the fee for each, what the client receives at the end of each, which expenses are separate, and the statement that no part of the firm's compensation depends on whether or at what price the business sells. The memo should also identify the decisions reserved to the client and any regulatory questions sent to the firm's counsel.

What to do this week

Take one current client who has mentioned a sale and build the illustrative comparison. Estimate a price range, compute what a proposed percentage success fee would cost at the midpoint, and lay out a phased fixed-fee proposal from the firm. Put the two side by side with assumptions and deliverables. Then ask the partner, associate, and paralegal who would own each task from readiness through closing. The resulting memo gives the client a concrete basis for deciding whether the attorney-run model fits.

How Acquivo Pro fits

Acquivo Pro is the firm edition of Acquivo for M&A attorneys and boutique investment banks. It is priced per seat on a flat monthly subscription with no per-deal fees, and one seat can run multiple concurrent client processes. On one login, the firm runs valuations across 21 industry verticals, generates teasers and CIMs from the client questionnaire and data room, builds a prospect list tailored to the client from the data room, website, and questionnaire, and manages NDA, IOI, and LOI flow in a single pipeline. The client sees a branded document portal under the firm's name. 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.