Podcast Summary: Acquiring Minds

Episode: How to Hire an Attorney for Your Acquisition

Host: Will Smith

Guest: “SMB Acquisition Attorney” (Anonymous)

Date: November 23, 2021

Overview

In this episode, host Will Smith sits down with the anonymous “SMB Acquisition Attorney,” a high-profile M&A lawyer known for his insights on SMB Twitter. The goal: demystifying the legal components for first-time small business buyers, including why and how to hire the right attorney, how to think about legal fees, the importance of commercial judgment as well as legal expertise, and what protections an attorney provides in the deal process.

Key Discussion Points & Insights

1. Guest Introduction & Context

• Guest's background: Top-tier law firm attorney, regularly works on $100M+ deals, active on Twitter sharing M&A advice for small business buyers. Due to ethical considerations, he remains anonymous.
• Why he’s relevant: Despite his big-deal background, he’s taken an active interest in the small business acquisitions (“SMB”) world, helping buyers navigate legal pitfalls and making lawyer referrals.

- Quote [02:40]

“Because of that, my current billable rate really isn’t helpful in the SMB space. I’m north of 1,000 bucks an hour. ...So I’ve been...making a lot of referrals to other great lawyers in my network.” — SMB Attorney

2. Typical Legal Pain Points for SMB Buyers

• Many buyers (even those with business backgrounds) lack practical M&A experience.
• Common scenario: Someone signs an NDA or LOI and becomes anxious about next steps, legal representation, and what to look for.

- Quote [04:24]

“A lot of the conversations...go...‘I just signed an NDA or I just signed an LOI and I really don’t know what to do.’ These are really sophisticated folks oftentimes too...but if you don’t do M&A...you wouldn’t necessarily know what to do.” — SMB Attorney

3. Why It’s Essential to Invest in Quality Legal Counsel

• Buying a business is often the largest financial transaction of one’s life—larger, riskier, and more complex than buying a house.
• Legal expertise saves you from critical and sometimes catastrophic mistakes.
• The “bad cop” benefit: lawyers can “run interference,” delivering tough terms or news.
• Equally important—interpersonal skills: Your lawyer represents you politically as well as legally.

- Quotes

• On unbiased advice [06:15]:

  “There is a desire, and for good reason ... to save cost. But...this is going to be your largest financial transaction of your life...making sure you get this right for your family is critical.”

• Emotional detachment [08:10]:

  “You need a seasoned, experienced set of eyes...that’s unemotional...give you that sober counsel you need.”

• Human side of law [09:22]:

  “You want to look for somebody who’s very commercial...who’ve been entrepreneurs...not being an a-hole...is really critical because they’re your representative.”

• Lawyer’s role isn’t just ‘bad cop’ [10:59]:

  “There’s going to be times...you need your lawyer to run interference...but ultimately they should be as much of an enjoyable person to work with as anybody else, in my opinion.”

4. Your Attorney is the Only True Advocate

• Buyers, brokers, and sellers are all incentivized to get a deal done—even when they shouldn’t.
• Your lawyer is (or should be) your only true, fiduciary advocate.

- Quote [11:39]:

“Your attorney is the only true advocate in the deal...A lawyer can be helpful in being unemotional about the deal because you as the buyer are going to have some emotions...”

5. Legal Fee Structures & How to Think About Cost

• Typical hourly rate for SMB transactions: $300–$500/hour.
• Expect 20–30 hours = ~$6,000–$10,000 for a $1–4M deal—a small percentage of deal size.
• Alternative fee arrangements: flat fee, success fee, or (rarely) equity.
• It’s normal to discuss fee structures—don’t be shy about negotiating.

- Quote [13:25]:

“Most lawyers are going to charge you between three to $500 an hour for a transaction...But when you weigh that against buying a million dollar business...it actually isn’t that much money.”

• On alternative fees [14:55]:

  “There’s nothing that’s stopping you from having a conversation...a flat fee...or a success fee...or in some limited instances, equity...You should be asking...”

6. What Experience Should Buyers Look For?

• Seek transactional, M&A experience—not just any lawyer.
• Industry knowledge is a plus (especially with regulated businesses).
• Ask for a deal sheet and references; look for someone who is responsive and commercially savvy.

- Quote [17:11]:

“You want to make sure that they have true transactional experience, that they’ve done deals...if you hire just anybody...they’re probably going to be terrible because...these things move very, very quickly.”

• Size relevance [19:32]:

  “There aren’t a lot of great lawyers that really want to work in the SMB space... if you can find someone who’s done $50M deals who’ll do your $1.5M deal, great, but will they be available when you need them?”

7. How to Find and Vet an Attorney

• Referrals and word of mouth beat online review sites (e.g., Avvo, “Top 40 Under 40” lists, etc.).
• Attorney–client privilege makes offering direct client references tricky, but deal sheets can provide context.
• SMB Twitter and peer buyers are invaluable for reviews and referrals.

- Quotes

• [23:10]:

  “There are a number of things like Avvo...but the legal industry is really interesting...there are so many [awards] that almost anybody who has some experience is going to be able to say, ‘Hey, look I am 40 under 40...'”

• [25:18]:

  “Talking to other folks who have done deals is super helpful to you.”

8. Does the Attorney Need to Be Local?

• For transactional work, locality generally doesn’t matter; find the best person, regardless of geography.
• Exceptions: certain litigation or jurisdiction-specific issues.

- Quote [27:08]:

“The short answer is not really [for locality]...Everything’s done electronically now...You find the best person to do the job...Notwithstanding geography.”

9. Protecting Yourself Post-Closing: Lawsuits and Indemnification

• Lawsuits post-closing are rare and costly—often impractical for smaller deals.
• The real protection is up-front: robust representations, warranties, and indemnification provisions in your purchase agreement.
• Creditworthiness of the seller is also a risk—consider escrows or holdbacks to enforce indemnities.

- Quotes

• [30:33]:

  “Suing the seller on the back end is very challenging for a breach of contract...not a great way to start off...operating a business.”

• [31:10]:

  “Private M&A deals should have what’s called an indemnification provision...to protect yourself...if any of those statements [reps/warranties] are not true.”

• [33:13]:

  “That indemnity will protect you...but even great indemnity doesn’t help if the seller’s not able or not willing to pay. That’s where you use escrows or holdbacks.”

Memorable & Actionable Advice

• “An attorney who represents himself has a fool for a client.”—SMB Attorney [06:51]
• “You will pay for legal counsel at some point in the deal cycle, whether you pay for it upfront...or you pay for it later because things were missed.” — SMB Attorney [13:46]
• “Word of mouth is going to be your best bet here, rather than ... a review site or, you know, your local magazine's top 40 under 40 sort of ranking.” — Will Smith [26:09]

Timestamps for Key Segments

• 00:10–02:34: Guest Introduction & Overview
• 04:07–05:27: Common Points of Confusion for Buyers
• 06:15–11:39: Why Good Legal Counsel is Essential
• 13:14–16:49: Legal Fee Structures and Cost Considerations
• 17:11–19:32: What Experience to Look for in an Attorney
• 21:25–26:48: Referrals, Reviews, and Vetting Attorneys
• 27:08–29:08: Geographic Location of Attorney: Does It Matter?
• 29:08–35:10: Legal Protections: Lawsuits, Indemnity, and Protecting Your Deal

Conclusion

Hiring the right attorney isn’t just about legal know-how; it’s about finding someone commercial, pragmatic, and experienced in business transactions who is available, communicative, and advocates solely for you. Legal fees are real but a relatively small price for the security in what is likely the most significant financial decision of your life. Use word-of-mouth referrals, look for true transaction experience, and make sure all your legal protections are in place before you close.

For more, follow SMB Acquisition Attorney on Twitter (@mbattorney) and connect with the SMB Twitter community.