In every M&A transaction, the buyer and seller have different interests, different risk profiles, and different legal priorities. The attorney representing each side focuses on fundamentally different objectives. Understanding what your attorney should be fighting for, and what the other side's attorney is optimizing, gives you a clearer picture of the negotiation dynamics.
M&A counsel representing the buyer's interests in the acquisition. The buyer's attorney focuses on risk identification, liability protection, price justification, and structuring the transaction to protect the buyer's investment.
Any buyer in an M&A transaction. Buyer representation is not optional. The buyer takes on risk by acquiring a business, and the purchase agreement is the primary mechanism for allocating and managing that risk. The quality and experience of buyer's counsel directly affects the buyer's exposure.
M&A counsel representing the seller's interests in the transaction. The seller's attorney focuses on maximizing value, minimizing post-closing obligations, protecting against buyer's claims, and ensuring the seller achieves a clean exit.
Any seller in an M&A transaction. Seller representation protects the seller's proceeds, limits post-closing liability, ensures proper tax treatment, and manages the disclosure process. Without experienced seller's counsel, sellers routinely leave money on the table or expose themselves to unnecessary post-closing claims.
| Factor | Buyer Representation | Seller Representation |
|---|---|---|
| Primary Objective | Protect the buyer's investment and limit risk | Maximize the seller's proceeds and limit post-closing exposure |
| Due Diligence Role | Drives due diligence to identify all risks | Manages disclosure process and data room |
| Reps & Warranties | Seeks broad, detailed representations with long survival | Seeks narrow representations with short survival periods |
| Indemnification | Wants high caps, low baskets, long survival | Wants low caps, high baskets, short survival |
| Purchase Price | Seeks justification for lower price or holdbacks | Seeks highest price with minimal contingencies |
| Deal Structure | Prefers asset purchase (liability protection, tax step-up) | Prefers stock sale (clean exit, capital gains treatment) |
| Closing Conditions | Wants flexibility to walk away if issues found | Wants certainty of close with minimal conditions |
| Post-Closing | Wants strong remedies if problems emerge | Wants minimal ongoing obligations |
Protect the buyer's investment and limit risk
Maximize the seller's proceeds and limit post-closing exposure
Drives due diligence to identify all risks
Manages disclosure process and data room
Seeks broad, detailed representations with long survival
Seeks narrow representations with short survival periods
Wants high caps, low baskets, long survival
Wants low caps, high baskets, short survival
Seeks justification for lower price or holdbacks
Seeks highest price with minimal contingencies
Prefers asset purchase (liability protection, tax step-up)
Prefers stock sale (clean exit, capital gains treatment)
Wants flexibility to walk away if issues found
Wants certainty of close with minimal conditions
Wants strong remedies if problems emerge
Wants minimal ongoing obligations
Buyer's counsel works with the buyer's tax advisor to structure the deal for optimal tax treatment: asset vs. stock purchase election, purchase price allocation, IRC Section 338(h)(10) election analysis, and state/local tax planning.
Seller's counsel works with the seller's tax advisor to optimize after-tax proceeds: stock vs. asset sale preference, purchase price allocation negotiations (opposite of buyer's preferences), installment sale treatment for deferred payments, and state/local tax planning.
The buyer's attorney's primary objective is limiting the buyer's exposure. This includes: narrowing assumed liabilities in asset purchases, negotiating broad representations and warranties, establishing meaningful indemnification provisions, and identifying risks during due diligence that affect pricing or structure.
The seller's attorney aims to minimize the seller's post-closing exposure through: narrow representations and warranties with shorter survival periods, low indemnification caps and high baskets, comprehensive disclosure schedules, and limiting the seller's post-closing obligations.
Every M&A transaction requires representation on both sides. A single attorney cannot represent both buyer and seller (conflict of interest). If you are buying a business, retain experienced buyer-side M&A counsel. If you are selling, retain experienced seller-side counsel. Some firms represent both buyers and sellers (in different transactions), which gives them perspective on both sides of the negotiation. This can be an advantage.
Critical legal issues to evaluate when deciding between buyer representation and seller representation:
One attorney cannot represent both buyer and seller in the same transaction. This is a fundamental ethical rule. If a broker, intermediary, or counterparty suggests using a single attorney, decline. Your interests are not aligned.
Not all M&A attorneys are equally experienced on both sides. Some specialize in buyer representation; others focus on sell-side. Ask about the attorney's recent transaction experience on your side of the deal.
M&A legal fees can be hourly, flat-fee, or capped. Buyer-side work often costs more due to due diligence scope. Seller-side fees may be lower but can escalate in complex transactions. Understand the fee structure before engagement.
Sellers have a duty to disclose material facts. Buyer's counsel probes for adequate disclosure. Seller's counsel manages the disclosure process to be truthful and complete while not volunteering unnecessary information that could reduce the purchase price.
Understanding the other side's attorney's priorities helps you anticipate their positions. Buyer's counsel will push for broader protections; seller's counsel will push for a clean exit. The purchase agreement is the document where these competing interests are resolved.
Common questions about buyer representation vs seller representation
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