Legal leaders whose companies grow through acquisitions are likely to have an advantage over their counterparts at the negotiating table: experience that comes from closing many deals. But leveraging that experience to get everything your company wants won’t help if it leaves a bad taste in the other side’s mouth.
“You can’t burn bridges,” Matt Pinkham, chief legal officer at Specialty Program Group, said in a podcast hosted by legal tech company LinkSquares. “When we close this deal, the selling shareholders and their staff are going to become our colleagues immediately, and we can’t have them feeling defeated. We actually need them to perform and be happy to be here.”
Pinkham has been working on M&A for more than a dozen years, first as outside counsel and then as in-house counsel for one of the companies he represented, Hub International, the big insurance brokerage. When Hub launched SPG in 2022 to acquire more brokerages, Pinkham became one of the new company’s chief deal negotiators as its CLO.
“We talk about this internally,” Pinkham told podcast host Tim Parilla, LinkSquare’s CLO. “Let’s remember we do this all the time. The seller may do it once in their entire life, and maybe it’s a business they started or their parents started, so all these things we think are routine or simple they don’t necessarily see it that way.”
It’s not unusual for Pinkham and his team, when he was at Hub and today at SPG, to close as many as 10 deals per month. At that pace it can start to feel routine and that’s a mindset he coaches his team to avoid because on the other side, the deals are life-changing events.
“As a strategic buyer you almost forget,” he said. “Boom, boom, boom – down the assembly line. For you it’s just part of the job, but for these sellers, it’s like a lifetime goal, a transformational moment.”
It’s helped that he’s been on the sell side a few times. That’s provided a window into what his counterparts experience.
“As a seller, you’re responding to the buyer’s requests,” he said. “You’re reviewing the buyer’s documents for the first time. There is a little bit of discomfort, because you’re going along with the buyer’s process. That definitely makes you appreciate being on the buy side, to be honest. It makes you a better buy-side strategic attorney.”
Big target companies will tend to be well represented by outside counsel but for small companies, their outside counsel might have as little experience at the negotiating table as their clients.
“You have to change your style,” Pinkham said.
If the target company is relying on an attorney with little M&A experience, he said, you want to take the extra time to answer their questions and explain why you’re taking the positions you are, while for large companies with experienced representation, you have to bring your sharpest self to the table.
“The few screaming matches over the phone I’ve had have been with those Big Law attorneys,” he said. “You just have to put your shell on and not let it affect you.”
The tone he sets at the negotiating table carries through to post-closing integration, he said. For that reason he tries to bring a positive attitude, because the executives and staff that are coming in will need to accept changes as their company is integrated into the bigger one.
“We’re 29-30 [companies] that are all coming together,” he said. “You can’t run in 30 different directions…. You can’t have 30 different styles of employment agreements or 30 types of template agreements.”
