Your Question I am often asked if the buyer and seller (particularly in management buyouts where they may have known each other for many years) can use the same legal adviser.
Answer Whilst there is nothing to stop the buyer and seller having the same legal adviser, you are unlikely to get a solicitor to act on behalf of both. Due to the adversarial legal system in England and Wales, the Solicitors Regulations preclude them from doing so as they see it as a conflict of interest.
However… Unlike solicitors (I am a law graduate and a Chartered Governance Professional), we are not restricted from acting for both and are able to provide such support. In the 12 years we have been in business, we have acted for both the buyers and sellers in numerous transactions.
The process When asked to undertake such a role, we will draft a balanced Share Purchase Agreement and then have an open meeting with the buyer and seller. We go through the Agreement in detail explaining the implications to both parties. In particular, we go through the warranties with the seller and take notes in order to prepare the Disclosure Letter. The buyer is present whilst the seller is disclosing matters against the warranties so everything is out in the open.
Advantages
This approach has many advantages, the following being a few:
1. There is only one legal fee split between the buyer and the seller; 2. There are no lawyers trying to score points over the other. This protracts the process (often delaying completion) and, again, can increase legal fees; 3. Everything is out in the open from the beginning of the process and, in our experience, clients prefer this.
Precedent As indicated above, I have acted in this capacity on numerous occasions. Furthermore, it is not without precedence. When purchasing a residential property in Austria, for example, the buyer and seller have the same lawyer and they all meet at the same time to go through the sales documents.
Contact Richard Jenkins on 024 7698 0613 or Richard@clariclegal.co.uk for further advice or assistance if you are considering buying or selling a company.
NB. This should not be relied upon for legal advice.