As a lawyer and owner of a law firm for over 20 years, I’ve been practicing for almost 30 years. When we’re starting a transaction, especially for a new client, we’re often asked to estimate our fees for the transaction. A totally reasonable request. But not always easy to predict. Why? Because of so many unknowns. The biggest one is the competence of the lawyer on the other side. And by this, I mean, how well do they know the subject matter? Not all lawyers can efficiently handle a complex merger and acquisition transaction. In fact, most can’t. So, if we’re spending time educating the other side or dealing with the inefficiency of an attorney unfamiliar with this practice area, it necessarily drives costs up.
Often, ethical rules prohibit a lawyer from claiming they’re a “specialist,” because this term can be subjective and misleading. I don’t disagree with that. It’s a reasonable policy. On the other hand, it is without a doubt true that the more experience a lawyer has with a particular subject area, the more likely it’s going to be an efficient and positive experience for the client.
Our firm closes between five and 10 transactions every month, which, given the fact that we’re a relatively small firm, is a testament to the quality of our work and our expertise. My colleague, Robert Gold, is often sought out for representation following a transaction by the party on the opposite side of the transaction. Why? Because it’s obvious when your lawyer knows what they are doing and the other party’s lawyer doesn’t.
As Benjamin Franklin once said, “An investment in knowledge pays the best interest.” This quote underscores the value of investing in experienced and knowledgeable professionals, particularly in the legal field where expertise can make a significant difference in the outcome of a transaction.
What’s the moral of the story? Encourage all parties to a transaction to hire counsel competent to handle the specifics of the transaction. While sometimes this may mean paying a higher hourly rate (it doesn’t always), ultimately the lawyer will spend less time on unimportant matters and more time focused on making sure the deal gets closed on terms negotiated as quickly as possible.
