Leave 'Going it Alone' for Euchre and Call Your Lawyer Already

First off, for those of you who are not from the midwest, Euchre is a card game.  And contrary to the views of my (NJ-born) wife, it is a great card game.  It is played with four people on two teams.  You work with a partner to choose trump over your opponents and hope that you pick up the two bowers (okay, I can see why my wife was confused).  One of the riskiest moves in the game is to 'go alone' by having your partner drop his cards and you take on the other pair by yourself.  If you are successful, you pick up four points (trust me, that is good).  But if you are not, then you give up points to your opponents. It works the same way with businesses.  Companies who chose to go alone without counsel are taking an even bigger risk.  I recently worked on three different deals, each of which came to me after the terms had been decided and reduced to a term sheet.  In each case, the deal as envisioned by the parties did not hold up.  In one, the tax issue created was a deal killer and the entire structure had to be renegotiated.  In another, the parties were very excited to jump into a deal together, but after asking a few questions, they had to rethink their prior agreement.  The third went forward despite the risks.

The point of this is that it doesn't have to be this way.  While your company may be experiencing a financing, an acquisition, or some other transaction for the first time, lawyers, accountants, and other professionals have been there many times before and can give you the benefit of that experience.

"But we just couldn't afford to bring in a lawyer early on.  Plus, we were just negotiating the business deal."

I certainly understand the concern.  Lawyers are just speed bumps on the way to completing deals.  That is why when I went skydiving for the first time, I decided to skip the guide and the training (just an extra expense).  I grabbed a pilot and a bed sheet and jumped.  (OK, in full disclosure, I have never been skydiving.  But would definitely seek expert advice before doing so because it would just be crazy not too.)

So don't be crazy.  In each of those deals, the parties ended up spending far more money and emotional capital trying to fix their original mistakes than they would have setting up the deal properly from the start.  Don't go alone.  Use your partner.