Engaging an adviser, such as a lawyer, accountant, valuer, mergers and acquisitions (M&A) / corporate adviser or business broker can be a daunting process.  In any given field, there are many advisers and service firms in the market, and it can be difficult to know the best way to find and engage the right one for you – what should you look out for?

This blog sets out some tips for engaging an adviser, which are based on our experience in building good long term working relationships with our clients. As a specialist corporate and commercial law firm, we are not just familiar with the engagement process from the adviser’s standpoint.  We have also assisted clients in engaging other advisers.  

Tip 1:  Experience - find an adviser that has experience and specialises in the things you need

Ideally, find an adviser that specialises in the areas that are important to you.

For example, when it comes to lawyers, there are many areas of law and subsets of law (such as corporate and commercial law, property law, employment law, intellectual property law, family law and dispute resolution). A lawyer that specialises in a particular area:

• will be up to date on any changes to the law in that area;
• are more likely to be doing legal work in that area on a daily basis, and will therefore have considerable experience and expertise in handling similar matters; and
• can identify any legal issues quickly and expertly.

Similar considerations apply to other professional advisers, such as accountants.

It may also be helpful if the adviser has experience relevant to your industry and in dealing with businesses of the same or similar size as yours.  That could be of particular importance when, say appointing an M&A adviser to advise you in relation to the sale of your business, or a valuer to value a business.

You should also ensure that the adviser holds all necessary licences and other authorisations to provide the services you need.  While it may be obvious that your lawyer needs to hold an appropriate practising certificate, it may be less known that a corporate advisory firm needs to hold an Australian financial services licence (AFSL) to provide advice and services in connection with a sale or other dealing in shares and other financial products.  A business broker may need to hold an estate agent’s licence issued by the relevant state authority to sell your business.

It is worth doing your research and checking out an adviser’s website and social media to determine the experience and expertise that the adviser has in a particular area.  A recommendation or referral from a colleague, another adviser or trusted contact can also be a useful way of finding an adviser that meets your needs.

Tip 2:  Scope of Work

Following initial discussions and prior to engaging an adviser, ensure that the scope of work for the services you need is clear and you are also clear on any carve-outs, exclusions or assumptions as this will ultimately affect the fees that will be charged. 

For example, if you engage a law firm to prepare a business sale contract for you, is the quote just for the initial draft of the document or does it include further drafts following your comments and questions?  Does the quote include assistance with completion/settlement?  Does the scope of work include assistance with ancillary documents as part of the transaction?

If in doubt, ask the adviser to clarify the scope of work with you.

Tip 3:  Fees

Professionals such as lawyers and accountants typically charge fees on an hourly basis - although some may cap fees or charge fixed fees for particular work. 

Capped or fixed fees for a particular scope of work provide some certainty as to the invoice you expect to receive at the end of the matter.  If an adviser provides a fixed fee, as noted above in Tip 2, ensure that you understand the scope of work for that fixed fee as work outside the agreed scope may be charged at the adviser’s standard hourly rates.

For large matters, it is often a good idea to obtain regular updates on the fees incurred to date so that you can keep track of the work that has been done and the fees incurred.

Some advisers, such as M&A advisers, may charge break fees if the client terminates their engagement before the transaction to which the engagement relates proceeds (or if it does not proceed), or may be entitled to their fee if the transaction subsequently proceeds.  It is important that you understand these fees, and the circumstances in which you could be liable to pay them.

Tip 4:  Obtain multiple quotes

It can be a good idea to obtain multiple quotes for the work required.  However, if you do so, you will need to consider those quotes in detail as it is often not a matter of comparing ‘apples with apples’.  It is important to assess the scope of work, charge-out rates for future work, whether the fees are an estimate or a fixed fee, any assumptions or exclusions, and the relative experience of the respective advisers. 

For some advisers such as lawyers, keep in mind that a cheaper upfront price will not necessarily mean a cheaper price overall, particularly if the initial scope of work is limited, and the matter becomes more protracted.

Also, it is worth asking the adviser to clarify who in their firm will be engaged in your matter and their hourly rates.  To keep fees low, some professional services firms (such as legal and accounting firms) often use junior staff to produce the work, which may not be the same quality as a practitioner with more experience.

Tip 5:  Communication and rapport

With everything else being equal (i.e., experience, scope of work, fees, etc), you should consider whether you have a good rapport with the adviser you are engaging (and whether that adviser is a good communicator, both with advice and returning your calls and queries in a satisfactory and timely fashion).

As a business owner, it is important to surround yourself with first-class experts you can trust - from legal advice to accounting and financial strategy.

Communication, trust and respect are important for building a long term adviser-client relationship, and for ensuring that you are kept up to date as your matter progresses.

Tip 6:  When to appoint an adviser

In some cases, it may be obvious when to engage an adviser.  For instance, you would appoint an M&A adviser or business broker before you offered your business for sale.

However, from experience, when it comes to lawyers, we know many people believe that it will be cheaper if they are engaged at the last minute of a transaction.  Nonetheless, it can often be more efficient, and costs can be saved, if lawyers are involved from the commencement of the matter - they can then be up-to-speed on the entire transaction from the start, and can ensure that a matter is correctly structured (which could save costs in the long run if parts of a transaction need to be unwound due to lack of advice).

About Sierra Legal

Sierra Legal is a boutique corporate and commercial law firm that specialises in assisting their clients with buying and selling businesses, corporate structuring, capital raisings and general corporate/commercial matters.  Sierra Legal has lawyers in Melbourne, Brisbane and the Gold Coast. All of our lawyers are at Director or Special Counsel level with at least 13 years’ experience in medium to large local and international law firms.

How does Sierra Legal charge for work?

We work with our clients to develop fee arrangements that are the most appropriate for each matter.  Our fees are structured in flexible and innovative ways, including fixed or capped fees, blended rates, and, for some transactions, success-based fees. 

Our pricing is transparent, and we always provide our clients with certainty on the legal costs related to their matters.  The vast majority of our work is performed on a fixed or capped fee basis, making it easy for you to budget for legal costs.

For ongoing legal work, clients can also obtain greater price certainty by selecting a Sierra Legal Monthly Plan.  Please see Sierra Monthly Plans.

Other legal specialties and advisers

While Sierra Legal specialises in corporate/commercial legal matters, we have contacts at a number of other firms with expertise in other areas of law, such as property law, dispute resolution and employment law.  We may also be able to put you in contact with other advisers, and assist you in the engagement process (e.g., reviewing their terms of engagement).  We are always happy to have a chat, so please do not hesitate to contact us should you not know the type of lawyer required for a matter, or you need a recommendation for an area of law outside of our specialisation or for another type of adviser.