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Preparing for exit: The lawyers' view

'Tales from the non-exec’ harnesses the insights and lessons gained from the board rooms of marketing agencies around the UK and abroad from one of the most experienced non-exec directors in the sector, Miles Welch, the founder of Milestone Advisory and former CEO of Digitas and COO of Harvest Digital. Issues such as business strategy, exit planning, growth pains, expansion, culture, leadership, process and people will be covered in the form of tips, tools and advice. Powered by The Drum Network, ‘Tales From the non-exec’ is an essential read for any agency leader looking to grow a better business.

I recently met with some of the UK’s leading law firms to discuss the areas that they saw as important before and during a sale process. The focus here was to run a smooth process, maintain the business value from being chipped away by the buyer during due diligence and maximising the attractiveness to a potential suitor. Remembering that lawyers tend to get engaged later in the sale process it’s really valuable to listen to their insights and act on them early to avoid some common mistakes.

Here are the lawyers’ top 5 areas to focus on and get right:

1. Are the senior management team incentivised and have they bought into the benefits of the deal? A good understanding of what the deal means for them and a clear matching of expectations with reality is important. They often see situations where what’s on paper is actually different to what they thought they were getting. Paperwork can be pushed through and it’s unclear or never done and senior management can become disgruntled which can derail a process or cause jitters with the buyer.

2. Good use of a data room. This is an secure, usually online facility where the vendor places sensitive sales material for potential buyers to access. Be careful not to put too much commercially sensitive information in the data room in the early stages as competitors may be involved, save this for later stages once you’ve ascertained who’s really interested and who’s fishing. Monitoring the access is also important as you can measure commitment from different parties during the process, this is not definitive as some parties may be less sophisticated and don’t understand your market but if may give you some indicators.

3. Trying to explain the business and its potential is a must for a seller to gain maximum interest. Once in dialogue with a potential buyer you should tailor what's relevant for them e.g. commercial synergies. Understanding the drivers of the buyer (buyer knowledge) when engaging in a dialogue is essential.

4. Have a good Finance Director in place. As well as giving confidence to the buyer on the financials, the other advisors need a good point of contact as they’ll be a need to timely and accurate information during the process. The business needs good management information, accounts and balance sheet views at any time

5. Make sure that your lawyers are commercial and know when to push and when to let go. A sale process can be destroyed by a lawyer you gets into negotiating hard on non-commercial points that the vendor can happily live with. They will only irritate and frustrate your buyer and get the relationship off to a shaky start. Find someone who’s completed similar transactions and has the experience to add value.

Special thanks to Jonathan Ebsworth of Devonshires, Nick Allen of Squire Sanders, John Haggis and Andrew Tzialli of Sheridans.

Milestone are non-exec advisors to agencies in the marcoms sector, specialising in board advisory, growth consultancy and preparing for exit. Miles can be contacted at

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