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Sometimes, especially when working on a commission base, there’s pressure to make sure a transaction goes through. How do you balance this pressure with the necessity to provide advice that is in your client’s best interest?
In my view, the relationship is quite paradoxical as you brought up – advisors should be pushing advice to help the deal close since they are commission driven. However, it would be paramount to provide realistic advice and even cancel a deal if necessary, as if the deal is a successful (with the company’s best interest), this could create even further engagements and commissions
Pressure. Pressure. Pressure.
It certainly is a very crucial element that are rarely factored in, i.e. intangible!
Nevertheless, it may be relevant that in the corporate M&A Process, there is a room fo accommodating the dynamic nature associated with the transaction: enabling continuous engagement with the management, the Seller/Buyer, Board of Directors, or even the Regulatory Body. Sometimes, with the right justifications in place, an extension of the timeline/deadline is being granted!
So, it never harms to ask for an extension, or even entertain such valid request, if done correctly and for the right business needs!
Good luck!That’s a good question, especially since some of the advisors’ contracts contain “Success Fee.”
From Clint preceptive, Client needs to provide a clear scope with clear borders to the advisors. Also, Client has to have his criteria and assumptions to build his own unbiased decision.
From the advisor perspective, the advisor needs to focus on the long-term relationship with the Client and its reputation in the market by providing a balanced view on the DD findings.
The most important priority is to understand the key deliverables. Here I mean that we ‘really’ need to get to the heart of what is absolutely necessary and hone in on what that means. Proceed to plan how you are to spend your time by breaking time down into 30 minute chunks and attaching key deliverables. Ruthlessly prioritise and do what is necessary.
I think that it is an art, not a science. The best tricks and techniques? Depends on your contract and relationship, kind of. I find it helpful to illustrate the “what if”…say your timeline and scope start creeping like crazy. So what? How does that impact the deal? If you can’t articulate it to them simply, your client can’t get on board either. It’s fairly easy to quantify the impact of poor decisions at the cost of speed. Deal flow is rarely achieved through pushing. I think it’s important to identify what information you may be lacking to make faster decisions, then you need to determine which phase of the M&A cycle you may need to STOP/revisit and sharpen the pencil, in order to alleviate risk or sensitivity.
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