By: Charlotte Hayes

Buying a business is a crucial and complex decision that an entrepreneur or investor will ever make. The potential for growth, expansion, and opportunity is enticing, but the risks are equally significant. Beneath every transaction lies a maze of contracts, liabilities, negotiations, and regulatory hurdles. While many buyers believe their accountants, brokers, or personal knowledge of the business world is enough, Jeremy Tomes suggests that attorneys play a critical role in business acquisitions.

Tomes believes that securing enforceable legal protections is as crucial as identifying strong financials in private equity and acquisitions. He frequently warns entrepreneurs that financial optimism without legal safeguards is like building a skyscraper on sand. No matter how stable the business looks, if the legal structure is weak, the entire deal can collapse.

The Role of Attorneys in Private Equity

When people think about buying a business, they focus on price and financing. How much will the acquisition cost? What is the down payment? Will an SBA loan or seller financing cover the balance? But Jeremy Tomes argues that while these questions matter, they are secondary to legal clarity. Without precise legal guidance, financing structures may not even matter because the buyer may not fully understand what they are acquiring.

Attorneys often play a pivotal role in structuring deals in private equity transactions. They review every clause, representation, warranty, and covenant. They ensure that the business being sold is exactly what the seller claims it is. They prevent buyers from inheriting hidden obligations and provide remedies in the event of disputes. Tomes emphasizes that while accountants can verify financials, only attorneys may confirm enforceability.

The Purchase Agreement as the Foundation

The centerpiece of every acquisition is the purchase agreement. To the untrained eye, it might look like just another contract. To Jeremy Tomes, it is the backbone of the deal. This document spells out exactly what is being sold, what obligations are included, how risks are allocated, and what happens if things go wrong.

Purchase agreements are dense, often running dozens or even hundreds of pages. Within them lie critical protections:

• Representations and Warranties: The seller’s assurances about the state of the business—financial accuracy, compliance with laws, ownership of assets, and absence of undisclosed liabilities.
• Indemnification Clauses: Agreements about how one party will compensate the other if those representations turn out to be false.
• Covenants: Rules that govern behavior after the sale, such as non-compete agreements to prevent sellers from immediately starting a rival company.
• Conditions to Closing: Requirements that must be met before the transaction is finalized, ensuring that nothing material changes between signing and closing.

Without strong attorney involvement, these sections could potentially be vague or unenforceable. Tomes has encountered situations where buyers faced challenges due to weak agreements. Attorneys may act as a safeguard, making sure every word of the contract is carefully drafted to protect their client.

Beyond the Contract: Due Diligence

Attorneys are equally critical in due diligence. While financial professionals can analyze profitability, attorneys dig into risks that numbers cannot show. Tomes explains that due diligence reveals hidden problems, such as:

• Pending lawsuits or regulatory investigations

• Intellectual property disputes

• Restrictive covenants that limit operations

• Employment law violations

• Unrecorded liens or debts

This process ensures that buyers know what they are walking into. Without it, a seemingly strong business could turn out to be a minefield of liabilities.

The Negotiation Advantage

Business acquisitions are not just paperwork; they are negotiations. Sellers want to maximize their payout and minimize obligations. Buyers want the opposite. Attorneys shape these negotiations by drafting terms, identifying weaknesses, and securing protections. Tomes explains that while brokers and financial advisors can negotiate numbers, only attorneys negotiate enforceability.

For example, a seller may propose a high price but offer limited warranties. An attorney like Tomes can reframe the negotiation, insisting on broader warranties and stronger indemnification to balance the higher valuation. This type of leverage is invisible to those who do not understand contract law but can make the difference between a fair deal and a disaster.

Protecting Buyers from Hidden Risks

One of the common mistakes buyers make is assuming that once they own the business, everything will operate as it did before. Tomes highlights that many contracts have “change of control” provisions, meaning that when ownership changes, vendors or customers can terminate agreements. Without careful legal review, a buyer could acquire a company and find that some of its key contracts are no longer in place after closing

Similarly, employment agreements must be reviewed to ensure key employees stay. Intellectual property must be properly transferred. Licenses must be assignable. Attorneys anticipate these details and prevent gaps that could cripple the business immediately after acquisition.

Balancing Protections for Sellers

Tomes is quick to note that attorneys are not only essential for buyers. Sellers also need strong representation. Without clear release provisions, sellers can remain liable for issues long after the business is sold. Without non-disparagement clauses, they may face reputational risks. And without careful tax structuring, they may lose value unnecessarily. A well-drafted agreement protects both parties and ensures that disputes are minimized.

The Myth of the “Standard Contract”

Many entrepreneurs assume that standard contracts or templates are good enough. Tomes strongly disagrees. In private equity and acquisitions, no two deals are the same. Each company has unique assets, obligations, and risks. Relying on a template ignores those nuances and leaves parties vulnerable. Attorneys customize agreements so that every clause reflects the specific realities of the deal at hand.

Long-Term Implications

Jeremy Tomes emphasizes that the value of attorney involvement extends far beyond closing. Strong contracts provide long-term stability. They define how disputes are resolved, how liabilities are shared, and how future obligations are handled. Without them, even minor disagreements can escalate into costly litigation. Attorneys help ensure that businesses not only transfer ownership but also remain operationally secure for years to come.

Why Attorneys Are Indispensable

In short, attorneys are not an optional expense in acquisitions. They are the central pillar holding the transaction together. They turn financial models into enforceable agreements, identify hidden risks, negotiate favorable terms, and build frameworks for long-term stability. Jeremy Tomes underscores that while anyone can buy a business, only those who prioritize legal strategy can buy one safely.

For entrepreneurs and investors considering acquisitions, the message is clear: do not underestimate the role of attorneys. Accountants can measure profit. Brokers can identify opportunities. But attorneys safeguard value. Without them, even a strong deal can collapse. With them, buyers and sellers alike can move forward with clarity, confidence, and security.

Jeremy Tomes continues to advocate for placing legal strategy at the heart of every acquisition. His work shows that behind every successful deal lies an attorney who ensured that the risks were addressed and the protections were in place.

Learn more about Jeremy Tomes and his expertise in private equity at biglawcapitalist.com.

Disclaimer: The content in this article is provided for general knowledge. It does not constitute legal advice, and readers should seek advice from qualified legal professionals regarding particular cases or situations.