Do I need to run each LOI through a lawyer?

June 26, 2025

by a searcher from University of California, Berkeley - Haas School of Business in Oakland, CA, USA

Hi Everyone. Question for more experienced people in the space. what stage in your search process would you suggest finalizing your deal team? Specifically, if LOIs are non-binding anyway, do I need to run each one through a lawyer?

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Reply by a searcher
from New York University in New York, NY, USA

Yes. Full stop. Especially if you're new at this. I thought i could DIY it and I absolutely paid the price. That small investment upfront could save your deal, your money and ultimately set you up for success. It's not a cost, it's an investment. If you want to save money, skip business school.

Reply by a professional
in Richland, WA, USA

Hey Tianie. While you're right that most of the deal terms in an LOI are non-binding, they do usually end up being used as the "blueprint" by everyone later (ie lawyers and other advisors) for putting together agreements. Furthermore, there ARE certain portions that you DO want to ensure are binding, most notably the exclusivity period to protect you from the deal getting shopped to another buyer while you're spending (wasting) money on diligence, and a provision that both buyer and seller are responsible for their own expenses (so that neither side tries to sue for expenses if the deal breaks down). For those and other reasons, for a deal you're serious about, or to just get a review of the general template that you will be fine-tuning for deals as you go, a lawyer review is not a bad idea.

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