Do I need a lawyer to draft my LOI for a very small deal?

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July 24, 2024

by a searcher from Georgia State University in Los Angeles, CA, USA

Do I need a lawyer to draft my LOI for a very small deal?

I am preparing to acquire a very small company (50K - 70K range) and would like to know if I should hire a lawyer to draft the LOI now, or wait until I am ready to draft the Asset Purchase Agreement. I would appreciate any feedback.

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Reply by a professional
from Lancaster University in London, UK
Thanks for the tag ^redacted‌. I would say generally not but (typical lawyer answer), it depends. Most LOIs I see are largely non-binding other than perhaps confidentiality and they don't go into much detail on deal terms (headline price and structure). If that's the case then, no, you don't need a lawyer to review it. If you are trying to achieve something more akin to a heads of terms then I would suggest you take advice.
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Reply by a searcher
from Northwestern University in Chicago, IL, USA
As others have said, no you don't NEED a lawyer to draft your LOI. However, if you WANT a lawyer to draft your LOI there is nothing wrong with that. I had a template I planned on using, but when my actual deal came there were some terms and aspects that were perhaps a little atypical. I decided to pay $500 to have a lawyer write my LOI and I am really happy with that decision. It gave me peace of mind and sped things up because I didn't have second guess all the edits I was making. And it made it easier to move into the Purchase Agreement for me. So a lawyer is not necessary for the LOI, but it may be worth it for some people/situations.
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