Why don’t you do fixed fee for a sale of business?
Many would-be business purchasers try to limit their transaction costs by asking that solicitors cap their costs. Here’s why we don’t agree to act for a fixed fee in sales of business transactions (this applies equally to purchases as well as to sales):
Every sale of business is different.
Even similar businesses (restaurants, hair dressing salons, gyms) have different ways of operating. Some sell gift vouchers, others do not. Some have loyalty programs others don’t. Some have staff with long service leave, others do not. These all affect the Contract and the work that has to be done during the sale.
There is no standard contract of sale.
Contrary to popular belief there is no standard contract for sale of business. There is a popular version that a lot of people use and this looks familiar at first glance. No one uses this Contract without amending it with Special Conditions. And the Special Conditions make up at least 50% of the terms in the Contract. And everyone uses their own Special Conditions. And everyone amends their own Special Conditions to suit the business being sold. There is no standard contract, even though contracts may look similar (until you start reading them).
There are unexpected twists and turns in every sale of business.
What begins as a straightforward transaction quickly becomes complex as a result of something that the purchaser asks for, something that the vendor does, or something that happens (such as staff leaving or the premises flooding or the website being hacked). These things are impossible to forecast and affect the amount of work involved.
No one likes getting ripped off.
Just as an experienced solicitor will not allow their client to be ripped off, they will not allow their own firm to be ripped off on costs. One way to avoid doing that is not to be locked in on costs when the ins and outs of the transactions are unknown (and cannot be known).
Does this mean that costs could amount to anything and I have no control?
Of course not. We give you an estimate of costs that fall into a range. If in the unlikely event we look like we are going to go outside that range we will let you know beforehand. An advantage of doing things this way is knowing that if your transaction becomes unexpectedly complex, your solicitor will be there to help you handle it. A less experienced practitioner who has agreed to a fixed fee may be tempted to provide less service, convince you to abandon your rights or simply refuse special requests. That’s no good for anyone.