Once you have made the decision to engage a healthcare transactional lawyer to assist you in the buying or selling process of an ASC or urgent care center, there are several steps to finding the right lawyer. It is necessary to conduct research and narrow down potential candidates based on several criteria. In the later stages of this process, it is crucial to conduct in-person interviews with potential lawyers so that you can better get a feel for their experience level and your own comfort level with this person as a potential teammate.
When it comes down to what questions should be asked in this interview, you might find yourself a little lost, especially if this is your first time hiring a healthcare transactional lawyer. Thankfully, listed here bellow are the top 10 questions that you should ask before hiring a healthcare transactional lawyer submitted by experienced attorneys.
How much experience do you have representing a seller like me or representing any party in a similar transaction?
This question is extremely important to ask. With many health care transactions, there is a steep learning curve. The more experience your attorney has, the more likely he or she will be efficient (which shall reduce your overall attorneys' fees). Also, there are many different types of providers and areas of health care, many with their own distinct laws and regulations. For instance, just because an attorney has assisted a client in the acquisition of a home health care company does not mean that same lawyer is a good choice to represent a client in the acquisition of an ambulatory surgery center. Retaining an experienced attorney with knowledge of applicable law may save a client headaches and attorneys' fees down the road.
Additionally, you want an attorney who is also a business advisor. If the attorney has seen several similar transactions, he or she might recognize if something is out of the ordinary and be able to share that knowledge with you. It is just as important to have an attorney that will tell you when a particular transaction is not favorable to you as it is to have an attorney who can draft the documents and close on the transaction. In short, you want an attorney who views you as a partner and not just as a source for attorneys' fees.
Which attorneys will be assisting on the project?
The answer to this question is important because a client may want to choose his or her team in completing the transaction. A client may want attorneys on the team who have corporate and securities law knowledge and ability, as well as attorneys with health care regulatory knowledge. It may be best to have certain agreements drafted by associates, who tend to cost less but also have less experience. Other times, it may be best to have documents drafted by partners. Having an idea of what attorneys will be providing services and their hourly rates will help the client to effectively manage their attorneys' fees and it's important to have these discussions with your law firm up front so there are no surprises when your bill comes to you.
(The above were submitted by Josh Weaver.)
Whom do you typically represent – physicians, hospitals, management companies?
It is a good idea to understand the type of client the lawyer typically represents because that generally determines the lawyer's experience and perspective on the deal. While the client will want a lawyer that understands its business and perspective, it can also be helpful to have a lawyer with a diverse range of clients so that he or she understands your opponent's perspective.
Can you tell me whether this is a good deal?
Hopefully the lawyer will answer this question "no." It is important for the client to understand that lawyers provide legal advice, not investment advice. In addition, a lawyer who stands to earn a fee for putting together a transaction may suffer from a conflict of interest regarding whether that transaction is actually good for the client's business. A trusted legal advisor can, however, connect the client to specialists in valuation, accounting and other areas to give a clear picture of the risks and benefits of the transaction.
How can you protect me if something goes wrong?
While the lawyer cannot provide investment advice, he or she can structure the transaction and draft the pertinent agreements to provide downside risk protection, flexibility in terminating an ill-advised deal, and predictability in handling difficult issues.
(The above were submitted by Chris Demeo.)
Can you represent me effectively in front of my organization's board of directors?
Health care executives typically work closely with their boards of directors, taking guidance from and reporting back to them. In many instances, your lawyers will represent your voice in those meetings and discussions. It is important that you have confidence that your lawyers will represent you effectively in those settings, assuring board members that the transaction is being handled well.
How deep is your bench? More specifically, does your team have the specific technical expertise necessary to handle a complex health care transaction, interacting with multiple federal and state regulatory bodies? Are there aspects of the anticipated transaction that you will not have adequate in-house capabilities to handle on your own?
Health care transactions require significant technical expertise and usually involve approvals from multiple governing bodies. Much of that work involves a level of expertise that requires the participation of specialists who have a very sophisticated understanding of the regulatory thicket that you will undoubtedly encounter. You should know in advance if your law firm can handle all of those issues on its own.
How much do you expect this to cost me? How do you plan to structure your fee proposal, and what alternative fee arrangements would you be willing to discuss?
Transactions, and especially health care transactions, are expensive. There is no way around that fact. However, you have an obligation to understand and manage those costs as best as you can. Your law firm should be a partner with you in accomplishing that task.
(The above were submitted by Michael Grebe.)
Do you understand the current market terms? Do you understand what healthcare concepts to raise?
This type of question really helps to hone in on the experience of the attorney and his team. In the healthcare industry, it is important to have attorneys who truly understand both the business and regulatory pieces of the transaction pie. The economics have to make sense, but the structure of the transaction also has to comply with healthcare regulations. I often say, 'If a transaction is possible in the regular business world, it's probably not possible in the healthcare world.' It's a bit of an exaggeration, but not too far from the truth. Healthcare transactions, including, ASC sales or M&A must be structured to comply with a myriad of laws such as federal and state anti-kickback requirements, licensure requirements, state physician ownership rules, etc. You want a legal team who can navigate those requirements as well as understand the business or market terms.
Is it better to win every point for your side or is more important to get the transaction completed?
We often envision transactions with 'us versus them' mentality, and in some ways, that is unavoidable. However, a transaction can fail to reach its potential, or fail period, when one or both sides take an 'all or nothing' posture. While we would like to 'win,' the more important goal is to complete the transaction that makes the optimal business sense for both sides. That often means compromising to complete the transaction instead of standing firm to win every point.
(The above were submitted by Kevin Wood.)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
