Financial Advisory Engagement Letters

Summary

Once a company has selected a financial advisor to assist it in an M&A transaction, the company and the financial advisor will enter into a written engagement letter containing the terms of the financial advisor's engagement. These terms include the scope and duration of the engagement, the fees and expense reimbursement payable to the financial advisor, and the company's obligation to indemnify the financial advisor. The engagement letter typically discloses potential conflicts of interest on the part of the financial advisor, and may include provisions that are intended to limit such conflicts. This practice note discusses these and other matters typically addressed in engagement letters from both the financial advisor's and client's perspectives.