This guidance may appear subjective but it is based upon years and years of real-life experience.
My suggestion is to keep the attorneys out of the business sales process until the executable version of the LOI is tendered.
Another way to say it is to put your Intermediary (M&A advisor) in a position to negotiate all of the “deal points” and your attorney in a position to practice law.
Please recall that your M&A advisor is an experienced business sale deal point negotiator and your attorney is an experienced transaction attorney.
They each have their specific areas of expertise and they should not cross over each other.
Furthermore, you never want two people doing the same thing. That sends a very distracting message to the buy side.
Attorneys love to negotiate deal points. Unfortunately, there are two problems with this.
First, it is not their strength and they are not as good at it as they think they are. More importantly, if your attorney is involved with negotiating deal points…who are they negotiating with? The buyer's attorney.
That many times leads to a cat and dog fight where winning the fight becomes the objective instead of what is best for the paying client. This “fight” leads to extended delays and many times a doubling or tripling of legal costs.
It is a continuum that is nearly impossible to get out of once it has been ill-advisedly entered into.
It is much more efficient, timely and cost effective to have your M&A advisor resolve all business deal point matters and have them documented in the draft LOI. Topic 46 will fully address the recommended content of an effective LOI.
The draft LOI should be advanced to the transaction attorney once the deal points are fully defined. The transaction attorney will review all of the legal terms regarding confidentiality, exclusivity, venue etc. to ensure that the terms and conditions are fair and acceptable for the seller.
This review should be procedural and not the least bit controversial.
Advice. If you are going to sign an LOI mean it and have the integrity to honor your own signature. This is not a hunting license. The LOI may be non-binding but it is an ethical commitment that warrants honoring.
If your ethics are so low that you consider an LOI as a holding pattern until a better offer comes along, then don't get a high integrity M&A advisor or high integrity attorney.
Say what you mean and mean what you say!