Which state should I hire legal help?

February 14, 2024

by a searcher from The University of Texas at Austin - Red McCombs School of Business in Houston, TX, USA

I live in State A and will form my entity in State A, acquisition target (entity and some light assets) is in State B. Seller lives in State C.
Should I hire a transaction lawyer in state A or B? Which state's law should govern contract in this case?
It's a small deal with simple structure, I need the lawyer to draft the APA.

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Reply by a professional
from American University in Irvine, CA, USA

Luke: Thanks for the tag! I would use an attorney in State A who has experience with multi-jurisdictional M&A transactions. If he knows the subject matter, he'll be able to protect your interests in your state. This is especially true if you can negotiate your state's law as the Governing Law of the contract (always a good idea, if you can do it), or if your Target requires a legal opinion from your attorney on organization or enforceability matters in your state. Sometimes, there are due diligence or contractual issues which require the expertise of the Target's state, and in that case, your local attorney can always obtain an opinion or assistance from an attorney licensed in the Target's state. But, that is not always required. Feel free to contact me at redacted if you have any other questions that I can help with.

Reply by a professional
from Harvard University in Lynbrook, NY 11563, USA

Unless there's some local complexity involved (e.g., due to real estate or it being a regulated business), I would hire a good lawyer rather than based on where the lawyer is located.

Which law you choose is a question for that lawyer (and will depend on which states are reasonably connected to the contract and have the most developed law/reliable court system). Often you go for your own state if you can (much easier for you and harder for seller), but because of the biz location, the two of you might agree to do State B. Would leave this to lawyer (and honestly probably not something that is a red flag if you're seriously worrying about at this stage).

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