Dr McDeal title Getting the best from your advisers

I am about to commence an important deal.Who should I appoint and how should I go about it?

The first adviser you should appoint is the one who will lead the deal on a day-to-day basis. This should be a seasoned negotiator from a corporate finance firm. Even if you have worked with someone suitable in the past, you should always consider a beauty parade. Find two advisers that seem equally capable of undertaking the role. Provide each of them with a briefing on your organisation and the proposed project, and ask them to make a pitch. Quiz your prospective advisers thoroughly on their relevant experience and the role they expect to play.

How should I proceed when I’ve found an adviser I like?

Meet your first choice at least twice before making a decision. Request references and take them up once you have decided to make an appointment. Ask the referee specifically about his experience working with that particular adviser.

You should expect to form a close working relationship with your lead adviser, so the chemistry must be right. Your instincts will guide you in this. Be clear with your adviser about what your objectives are and what factors will affect your judgement. The same applies when assembling the rest of the team. Your lead adviser can suggest names, but the decision is yours.

How can I make sure that I am getting value for money from my advisers?

Start off with written quotes from each of your advisers. Ensure that you understand the assumptions upon which the quotation was made. If you believe that those assumptions are unreasonable or inappropriate, say so.

Is it better to agree a time-based fee or one based on the success of the deal?

It depends on the transaction. If a fee proposal is based on time spent, ask for specific charge-out rates and get regular updates during the course of the transaction on costs to date and anticipated costs to completion. Where contingent, success-based fees are involved, ensure that your interests are aligned with that of your advisers.

When negotiating each individual fee, there is a careful balance to maintain. On the one hand, you want to be sure of paying the market rate. On the other hand, value for money is more than just accepting the lowest price. Certainly you should negotiate hard - this will give you a good insight into their negotiating skills - but remember that quality justifies a premium.

Often, transactions take longer or turn out to be more difficult than expected for reasons beyond your control. Your advisers may expect or ask to be paid more as a result. Do not even entertain such a request from an adviser working on a largely contingent basis. They are used to taking the rough with the smooth.

Things are more complex for time-based advisers. They will not be motivated by the prospect of working at a loss when they are not at fault. As soon as this situation arises, agree a basis for working beyond the original estimate. Better still, try to agree a fee cap at the outset.

I have assembled my team of professional advisers and am about to start the project.What is the best way to manage the team?

The personal commitment of your professional advisers is crucial to a successful outcome. The more frequently and effectively you communicate with them, the more you will get out of them.

At each stage of the project, obtain renewed commitments from your team regarding their personal contribution and timetable. Ensure that they know the consequences of letting you down. Do not store up gripes. As soon as you feel that you are not getting the attention you deserve, let them know.

It may be helpful to arrange with your advisers a regular reporting process, such as a weekly update meeting or a specific time of day when you can be contacted. Stay informed of all aspects of the deal, particularly if the project hits a rough patch. The busier you are, the more important effective communication becomes.

My advisers seem to be lost in the detail and are spending more time chasing their own tails than advising me.

It sounds like your deal leader is not being effective in his or her role. This may be your fault. Their job is to give you information that enables you to make decisions, and for you and them to put those decisions into effect. However, sometimes complex tax or legal issues throw some aspects of a deal into confusion. When this situation arises, effective, immediate communication involving you, the deal leader and the relevant expert is essential. Meet face to face if possible and ensure that you are in a position to make a decision by the end of the meeting. Do not commit to a course of action until you are certain – changing your mind later on will waste your advisers’ time and your own money.

What is the best way to manage the project internally?

Too many cooks can hinder effective communication with your advisers. Wherever possible, have one internal point of contact. You will probably need to involve colleagues, but do so on a selective basis. Where individuals will be materially affected by the outcome, keep them informed as the project develops, but do not allow management by committee. Maintain confidentiality wherever possible and give your advisers consistent instructions.