Selling your business can be expensive, ahem, business. So it makes sense to shop around.

There’s a huge array of factors that will affect your legal fees associated with a business sale such as:

• The size of the transaction – how much you’re buying or selling for.
• The amount of due diligence involved – a small business with one or two staff involves less work than a larger or more complex organisation.
• Which party draws up the sales agreement and the complexity of the terms.
• Whether or not a property is involved. There may be a separate solicitor within the firm dealing with leases or land transfers.
• The experience of the solicitor – I’ve got 15+ years of doing this and that experience adds value to the deal
• Regional variations in fees exist – London firms are generally more expensive. My advice on the location of your solicitor is that it is of little significance – I can carry out pretty much all transactions remotely.

The more complex the case becomes, the higher the fee will be.

When you’re comparing solicitors’ quotes, remember that you’re not comparing apples with apples. Price comparison is easy to do with products, but not so with services. You generally get what you pay for in terms of service, so without overpaying, you will presumably want a solicitor who provides excellent service as well as great advice at the right price.

Should you opt for a fixed fee when selling a business?

I’d always recommend you ask a potential law firm to provide you with a fixed fee. Sadly most solicitors still work on hourly rates and will give you an estimate of costs. Often, they’ll give you a low end estimate with a higher end top line, and experience would say that many firms will end up billing at the top end.

A fixed fee should be easy for a firm to provide, if they receive a clear and thorough brief and project specification. They have hopefully done M&A work before!  While some firms may provide a fixed fee, it is usually based on their hourly fee, along with assumptions and agreements about any potential changes to the scope of the work.  I dont work on hourly fees, and so the quote I give is the amount you’ll pay, providing the job stays on scope. It is important to ensure that the firm shows you how it has understood what you need and how it will fulfil that need so that you can identify and correct any misunderstandings early on.

Choosing legal advice that will enable you to lock in a fixed fee gives you certainty and makes it easier to compare other solicitors fees – but remember the same fee doesn’t mean the same service!. With fixed fee billing, the focus is on value rather than billable hours, which aligns your interests as the paying client with that of the the law firm. Solicitors are encouraged to work efficiently to add as much value to your case as they can. In a word, fixed fee pricing encourages problem solving and efficient working.

For every job, I give a bespoke proposal including fixed fees. This way, everyone knows where they stand.

I rarely price match other solicitors – simply because the lower priced ones don’t provide the same level of service (or any!). Having said that, my services will usually be more cost-effective than big commercial firms with fancy coffee machines. That said, if you’ve a quote on a job and want me to see whether I can get close to it, I’d rather try than lose the job. Sometimes it’s possible to reduce the scope and still provide excellent service, in order to match your budget.

Final advice..and a freebie

When selling your business, information is crucial. One of the key steps in the legal process of buying and selling a business is due diligence (DD). In short, due diligence is the process through which the buyer (and their advisors) starts to understand everything about the legal, financial, operational and any other aspects of your business. Your role as seller is to take an active role in helping the buyer, providing documents and clarifying any issues.

To get your business ready for sale, you need to prepare. Get your free due diligence questionnaire here. 

You’re welcome.

Feel free to give me a call on 0116 3667900 and have a chat about your requirements or get in touch this way. I am always happy to help.