Lawyer and Accountant Fee Structures

August 02, 2017

by a searcher from Arizona State University in 7373 E Doubletree Ranch Rd #200, Scottsdale, AZ 85258, USA

Does anyone know what it should cost to have a lawyer review the PPM and create a Purchase Contract/LOI? How about the cost of having an accountant review the financials (official or unofficial audit)?

Additionally, what are some ideal fee structures that could be set up with the lawyers/accountants? I'm a self funded searcher and want to minimize costs as much as reasonably possible. I've heard that guys will defer their legal fees until###-###-#### days post acquisition and the cost usually ends up around $10k if you do much of the work yourself.

I'm curious to know what payment/fee structures each of you have chosen or plan to choose with your lawyers and accountants.

I greatly appreciate any insight you'd be able to provide.

-Gus Gabel

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Reply by an investor
from Loyola University of Chicago in Chicago, IL, USA

The answer to all of your questions is.... it depends. If you want to get a good quality of earnings report from a decent accounting firm, figure it's $25,000 (roughly). If you want to get a good law firm with experience in M/A that can boiler plate and review your LOI/PPM, figure it's something around $500 per hour for the lead lawyer and $300ish for the staff (roughly). Figure all in, about 20 hours in a mid range firm and around $7,000ish on the legal side. Now, that's going to be a pretty competent team, which will probably save you a ton of problems later. For your first deal figure that you can pad that lawyer bill some more because you may have the tendency to "over communicate" with the legal team. The last building I purchased I went to a local real estate lawyer that boiler plated everything and negotiated the contract, all for well under $10,000. This was a two man shop with a legal assistant. Competent, quick, responsive and good. So, on the first go around, I'd recommend shopping to a bunch of different sized firms in the accounting and legal side, you are going to get a huge range. Some way more, some less. Always ask for a few references and if they won't provide them, run.

Reply by a searcher
from Harvard University in Los Angeles, CA, USA

I think you should be able to craft an LOI template yourself. If you have a searcher who has done this and can share with you their Template, it would be best. Same goes for purchase agreement. I think if you can take a stab at filling these out, you would only need a lawyer to take a look at your document, if at all, which would cut down on the amount you need to pay them. Start developing a searcher network if you haven't already.

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