How to handle attorney relationships during negotiations

searcher profile

July 30, 2025

by a searcher from University of Southern California in Alexandria, VA, USA

My team has been negotiating a deal with two owners of a very profitable and well-run hair salon in the DC area. We have been under exclusive LOI for about 45 days and are in final negotiations on a purchase agreement. During due diligence, sellers and broker were extremely collaborative and responsive, sharing files, logins, etc. Financials were spot on and all parties seemed eager to work together. However, everything changed when the attorneys got involved. Once a draft of purchase agreement reached the seller attorney, all communication seemingly stalled completely. There was one particular clause their attorney took issue with--an indemnification escrow of 10% of the purchase price--and he refused to review the rest of the document until we removed it entirely (we don't want to remove it until we have full comments and can agree on the rest of the terms). Even the sellers' broker admits it was very standard contract, but the seller attorney has taken over all communication. The seller attorney is not a deal lawyer, but rather a litigator and family friend to the sellers and he has been incredibly combative, unresponsive and taken the negotiation personal. Unfortunately, he seems to have the ear of the sellers, as my communication has been cut-off with them. Both of our attorneys have advised us (buyers and sellers) to not communicate directly with one another and rather let the lawyers handle the back and forth, but ever since they "took over" the tone of negotiation has turned negative and has slowed to a standstill. Does anyone have any experience with deals that fell through due to attorneys who could not come to an understanding even when the buyers and sellers seemed willing to make it work? What is in my power to do to restore trust between all parties? Thanks for sharing your stories and experience!
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Reply by an investor
from Virginia Polytechnic Institute and State University (Virginia Tech) in Ashburn, VA, USA
This is one of the risks I always convey to Buyers when they ask about fee estimates. When the Seller is underrepresented (like here, by an attorney who doesn't do M&A), it will increase costs (at best) negotiating nonsense that would never have to be negotiated between two experienced M&A attorneys or, sadly, result in a dead deal. The only real solutions to this situation is to either (a) get the broker involved (but if they were good they would have already would have handled this) or (b) go straight to the Seller. The idea that communication between Buyer and Seller is to stop once the PA is shared is nonsense, especially if there's an inexperienced attorney involved. You may be able to salvage this deal and get it across the finish line, but unless you get the Seller's attention and get them on board with the fact that your 10% escrow is standard fare (assuming no seller note and###-###-#### month escrow), you're going to spin your wheels trying to educate an ego that doesn't want to look dumb. Sadly, this happens all the time. I'm currently dealing with a Seller's counsel whose firm bios have no mention of M&A. They're all real estate and title attorneys and completely clueless as to what is "market". Sellers, please don't ever hire your friend or cousin who is a title attorney, family law or estate planning attorney to sell your biz. It's not going to save you money. It's going to chase away good buyers.
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Reply by a searcher
from Indiana University South Bend in Granger, IN, USA
Time for an "all hands call". You talk through the issues with the seller and have the attorneys listen so they know exactly what the intent is. Then they go and paper it up. They are 'over lawyering' for whatever reason. All hands calls will shine light on who is being difficult and then it needs to be confronted. You probably need to privately jump down your lawyers throat a bit and get them to toughen up big time.
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