Generic LOI template vs. Attorney-prepared LOI

June 28, 2023

by a searcher from University of Maryland at College Park in New York, NY, USA

Do most buyers use a generic LOI template to save costs, or is it prudent to hire an attorney to draft something?

For the former, does anyone have a fairly standard LOI that I can use to fill in the blanks regarding purchase price, deal structure, etc.?

Also, is it customary for the due diligence period to start the day the LOI is executed or once all of the due diligence items have been delivered to the buyer?

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Reply by a searcher
from Instituto Tecnológico y de Estudios Superiores de Monterrey (ITESM) in Brownsville, TX, USA

Apart from cost, I there's probably not much benefit in using a generic LOI, the best is to sit down a couple of times with an attorney that can draft up and review a good LOI for you, best to have it tailored to your specific needs!

Reply by a searcher
from Babson College in Clinton, CT, USA

I asked myself this very question and figured since I'd need an attorney anyway at some point, I might as well find one sooner than later. Most M&A attorneys I've spoken with either said, "come back when you have a deal," or "fill out our template then setup time to review." I didn't like either approach frankly. LOI's seem too important to give it the old college try. My ideal scenario is I find an attorney I like and sign some sort of engagement agreement. They'd provide their LOI template, which I'd expect to be able to fill in about 80-90% of. Then when a specific deal comes up where I want to submit an LOI, I can hop on with them to nail down the rest (billed hourly.) Since the engagement was already setup, I'd expect this to move quickly. I'd then expect as time goes on and more LOI's are submitted, I'd need less attorney time for LOIs. Anyone else doing anything like this....at least to start?

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