Looking for new Attorney (Exit Planning Advisory Team Partner)

The Role of the Attorney

“I’d like to leave/sell my business.  Can you help me?”  How you answer this question determines whether you will represent your client and his or her company in the future.

No matter your profession, you have three primary responsibilities when working with your business owner clients:

  • To inform and to educate the owner about the Exit Planning process
  • To facilitate the Exit Planning process by coordinating your activities with those of the owner and his/her other advisors.
  • To provide services necessary to ensure the owner’s successful transition from the business.

As an attorney, you offer counsel and insight into the business owner’s overall Exit Plan.  You prepare the documents necessary to effect:

  • a transfer of ownership among family members;
  • a merger or acquisition
  • a transfer to an insider
  • estate planning
  • various stock plans
  • key employee benefit planning
  • deferred compensation for the owner
  • buy/sell and stay bonus planning

In addition, the attorney can create the original planning letter outlining and providing analysis of various tools that are used to attain the objectives stated in an owner’s Exit Plan.

Step One:  Setting Exit Objectives

  1. Meet with owner regarding Exit Planning objectives.
  2. Counsel owner regarding various Exit Planning techniques.
  3. Review existing legal documents related to ownership.
  4. Help to form the Advisory Team.


  1. Generate hourly revenue for meeting time, usually two to five hours.
  2. Uncover legal needs otherwise neglected or unknown to be addressed during Exit Planning representation.
  3. Refer owner/client to Advisory Team members.

Step Two: Determining Value / Price

  1. Explain appropriate type of valuation.
  2. Help select valuation advisor depending on owner’s objective (sale to third party or transfer to insider)
  3. Discuss methods of reducing business value (eg. Unfunded Non-qualified Deferred Compensation Plan).


Create Exit Planning Memorandum based on first two Steps (for a fee of $3,000 to $10,000).

Step Three: Preserving, Protecting and Promoting Value

  • 1. Preserve value

  • Conduct Fiscal Year End Planning meeting with all Advisory Team members present.
  • Review Entity status (C vs. S)
  • Determine applicability of Charitable Remainder Trust
  • Determine applicability of ESOP
  • Discuss use of lowest defensible value for ownership transfers to insiders
  • 2. Protect value

  • Conduct fiscal year end legal audit
  • Discuss entity protection, review existing entity
  • Discuss and create as necessary off-shore trusts
  • Review casualty and liability insurance coverage
  • Discuss and review removal of personal guarantees (and of Personal Assets as collateral for business debt)
  • Discuss and use lowest defensible value in all Business Planning instruments
  • Discuss and create multiple entities
  • 3.Promote Value–Implement Value Drivers.

  • Create incentive-based plan to motivate and keep key employees
  • Create Non-Qualified Deferred Compensation Plan
  • Create Equity Based Plan
  • Create Stock Purchase Plan
  • Stock Bonus Plan
  • Stock Option Plan (ISO and non-qualified)
  • Buy Back Agreements


  1. Meeting time with client, typically 3 – 15 hours.
  2. Create Exhibit to Planning Letter detailing specific proposal regarding key employee incentive planning and other protection/preservation tools such as:
  3. ESOPs
  4. CRTs
  5. Multiple entities

 Fees generally between $1500 and $5000.

 Review or prepare documents including those related to:

  1. entity status
  2. fiscal year end audit
  3. casualty and liability coverage, and
  4. personal guarantees.

  Fees generally not less than $5000 and as great as $50,000.

Step Four: Converting Business Value to Cash – Sale to Outside Third Party

 Tax analysis necessary for owner’s sale of company

  1. Due diligence required for owner’s sale of company
  2. Negotiation of sale of business
  3. Preparation and review of all transaction documents

Opportunity:  Representation of Owner/business in sale.  Fees between $30,000 and $150,000.

Step Five: Transferring the Business for a Promissory Note

  1. Create a written plan to transfer company to insiders.
  2. Draft documents effecting transfer (notes, security instruments, employment and buy back agreements).
  3. Draft documents providing incentives to key employees not receiving ownership.

Opportunity:  Create documents that implement Exit Plan. Generally, fees not less than $5000 up to $25,000.

Step Six: Contingency Planning for the Business

  1. Prepare buy/sell agreement.
  2. Prepare stay bonus agreement.

Opportunity: Prepare business continuity documents.  Fees generally between $1500 and $4000.

Step Seven: Wealth Preservation Planning

  1. Perform overall estate planning.
  2. Focus on design if child(ren) to receive business
  3. Consider use of GRATs, IDITS, FLPs, LLCs, CRUTs.
  4. Transfer business interests to children prior to sale.
  5. Create related entities to be partly owned by children
  6. Perform charitable income/estate tax planning.

Opportunity: Successful Exit Planning requires sophisticated Estate Planning services: lifetime gifting, GRATs, family limited partnerships, etc.  Fees generally between $3000 and $25,000.


Life Insurance

No Financial Plan Is Complete Without Risk Management.  Do You Have Questions About Your Life Insurance Needs? Call my office at 215-886-2122, We Can Help You With Answers.

Disability Risk Fact Sheet

  • One-third of all people between the ages of 30 and 64 will become disabled  sometime in their lives. (Source: Health Insurance Association of America)
  • At age 32, the chance of being disabled for 90 days is 6.5 times greater than the  chance of death. (Source: National Association of Insurance Commissioners)
  • Each year, one person in eight will suffer disability.  (Source: National Association of Insurance Commissioners)
  • Seventeen percent of American families (one in six) have at least one adult who is  disabled from employment. (Source: 2000 U.S. Census)
  • The likelihood of being disabled for more than three months is greater than dying in  any given year. (Source: Society of Actuaries)
  • Seventy-five percent of disabilities are caused by an illness rather than an accident.  (Source: Commissioner’s Disability Table)
  • In the first year following a paraplegia, living expenses average $259,531 per person.  (Source: National SCI Statistical Center, 2005)
  • Only 17 percent of small businesses offer disability coverage.  (Source: Life Insurance Market Research Association)
  • Forty-eight percent of VA mortgage foreclosures are attributed to disability.  (Source: FHA, Disability Income Concepts, 1998)
  • Eighty-two percent of American workers have inadequate or no disability protection.  (Source: Consumer Federation of America and American Council of Life Insurers, 2003)
  • Social Security Disability Insurance  (SSDI) is available if you have worked 10 years before becoming disabled; after five months of disability; if the expected duration of disability is more than one year. It pays an average of $894.10 per month. (Annual Report on the Social Security of DI Program, 2004)
  • Seventeen percent of American families (one in six) have at least one adult who is disabled from employment. (Source: 2000 U.S. Census)