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I am Dr. Randi Ross, CEO of Premier Practice Consultants, and today I wanna talk to you about something that’s a lot question I get all the time. Everyone has different opinions on it. I obviously have my own that I’m gonna share with you hopefully you’ll have a takeaway from this.

That helps you sometime in the future. So one of the questions that we often get, and we’re gonna break this down from sellers and buyers, is, do I really need an attorney? I find that a very interesting question. I understand that sometimes people are looking to, minimize their costs and expenses that go along with an acquisition, but at the end of the day, this is probably one of the most.

Important business transactions of many of your lives. So you can’t really put, a minimal cost to that, even if you’re not really at a high price sale point. It’s so important. We’ll talk about it first from the seller’s perspective, and guess what? You can listen to me here today for a few minutes.

You might totally disagree with me. You might be one of those people that goes online and downloads a contract and thinks that is appropriate and that’s totally fine. I will tell you that all of our clients, it is recommended very strongly that they engage an attorney. So from a seller’s perspective, it’s really important to make sure a few things are in place.

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A lot of a contract Yes. Will be what we often refer to as legalese. It’s a lot of kind of, legal jargon. That meets the criteria of what’s required for this type of transaction. Most of us probably wouldn’t understand a lot of the finer points if we do read through it, but there are certain things that you, that I feel are important for you to understand that should be in there, and there’s different elements depending upon what your transaction is. So one of the first things is what we refer to as indemnification. So what, in real simple terms, what indemnification means from the time someone else purchases your business. You are not legally responsible for anything that person does.

Okay. And that’s really important. And actually it works both ways. They’re not responsible for anything that you did prior to them becoming the owner of the business. So that’s a really important point. And if you don’t know that. You can actually get yourself into a little bit of trouble. The other thing that’s really important is transfer of conservatorship of files.

So every state has little different laws, so your state might be a little different than the example that I’m gonna give, but most states require you to hold on to files data. I know everything’s in a cloud today, but I’ll just use the word files for. For argument sake for seven years. If you’re selling your practice and you’re retiring and you’re relocating and you don’t wanna be really tied to this business any longer, this is something else that’s really important to make sure that person now is responsible for what we refer to as conservatorship of those files.

Very important point to understand. The other element that can be important, and this is not in every deal. Is if you happen to be owner financing, and then it is critical that you have not just an attorney, but a good attorney that’s gonna make sure that you are protected and they’re gonna make sure that schedule of payments is executed properly within the legal document, contract, purchase agreement, stock transfer, whatever word you wanna use that it’s executed properly in there so that you are protected.

So that you’re going to be paid, that’s not something that you want to do on a handshake. Okay? As far as buyers, it’s really important for some of the similar reasons. For many of you, this will be one of the most important and maybe even the largest. That you will have. So guess what? You have to figure in what I refer to as the cost of doing business.

So the cost of this transaction is you need an attorney to represent you. Every deal is different as to the cost. It depends if it’s strictly the practice. There’s also real estate involved, and then it becomes almost a secondary contract. So there are a lot of different elements that really play into, what this will cost and how much kind of legal influence there has to be, depending upon the very specific deal.

The other thing that I will strongly caution you on is that to choose an attorney wisely. And what I mean by that is really interview an attorney. Make sure that they have a history of executing these kinds of documents. And hey, guess what? Any attorney that went to law school, I’m sure can do this.

And it depends upon the complexities of your particular deal. Some are very straightforward, some are very complex. So you know, there’s some variables there. But really interview them, make sure they’re available for you. Are they going on a jury trial, for the next eight weeks that’s not gonna help you get your deal done.

They’re not gonna be available. And that’s gonna be very frustrating to both parties and the other party’s attorney. So those are the kinds of questions you want to ask. Is, are the, have they done these types of acquisitions in the past? What is the cost? Some people will give you a flat rate.

Some people, it’s based on, their hourly. What you choose ultimately is your decision, but their availability and their accessibility is a really important question. You wanna know that. How long is it gonna take them to draft a purchase agreement for you to send to the other attorney?

Or if the other attorney is drafting, once they receive it, how long will it be before they review it? Schedule a meeting with you to go over it because there are some attorneys that I will tell you that can be deal killers. One of the attorneys that we work with kind of has a little bit of a joke.

There’s two kinds of attorneys in the world. There’s ones that get deals done and there’s ones that kill deals and they can, they can be very not attentive. The needs of the deal and the party on the other side might get deal fatigue, so you might actually lose an opportunity simply because you didn’t choose the right attorney.

So you know that this is just a few things to be aware of, but I really want to hammer home the point, get an attorney if it costs you, $5,000, $10,000. Listen, we’ve had some deals that are so complex that our clients have spent $40,000 on an attorney. I’ll tell you, that’s very rare.

Okay, but you have to figure it in as the cost of doing business, things will be done more efficiently. Banks also like if there’s an attorney involved because they know that their needs will also be met, so don’t penny pinch on what might be. One of the most important deals of your life, the important purchases, or on the other side, one of the most important sales that you have.

It’s the cost of doing business. And I will tell you, we do a lot of sales every year. And if someone doesn’t have an attorney or if someone chooses an attorney poorly, it really can mess with the process. And like I just said a few minutes ago, it could even kill the deal. So do the right thing. Make this part of your process, please.

I instill this in you. It’s really important for everyone to get what they need from this process. I’m Dr. Randi Ross, CEO of Premier Practice Consultants. I’d like to thank you for spending a few minutes with me today. I hope this information was helpful. You can feel free to reach out for me at any time.

You can find me online, on Facebook, on actually every social media platform, and I’m always happy to have a conversation and help you any way I can.