KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and whitelist ken@kirschenbaumesq.com ****************************** KK broker and legal services explained June 6, 2024 *********************** KK broker and legal services explained *********************** Ken, Can you provide costs/info regarding you’re a) brokerage service and b) legal services regarding a sale of the company? Thank you, Name withheld on request ********************** Response *********************** The broker relationship is a bit different than dealing with the traditional brokers in the alarm industry, many of whom are excellent and provide suburb services [they are listed on The Alarm Exchange]. But while they are acting as broker, an agent of sorts of the seller [or sometimes buyer] they are not trained fiduciaries; they don’t enjoy confidentiality between client and them; they may not fully understand – some don’t get it at all – that they owe duty to their principal [that would be you] to act exclusively in your interests. In short, the brokers in the industry are not lawyers [and if they are they aren’t practicing law]. One difference that you may appreciate is that the traditional brokers only get paid if they make the sale. The broker fee is often incidental to the overall fee I charge because I am getting paid as attorney for time spent. I do not necessarily perform the same service as the traditional brokers. While their approach and services may vary, all will more than likely embroil themselves in your business records more than I do. I’ll get the company profile and account information and then put the sale on The Alarm Exchange. I don’t know if The Alarm Exchange is the most widely distributed “classified” in the industry, I don’t know of others. The listing will reach tens of thousands of potential buyers. I will take on a “broker” role only if I am also engaged as attorney for the potential transaction. There are a few reasons for that. First, I don’t charge as much as the traditional brokers charge, which can be 5 to 8 or more percent of the deal] and I don’t require exclusivity [which they all require, meaning you can’t deal with another broker or sometimes even sell the company on your own], I don’t require a minimum time for the broker contract [most require one to three years] and the engagement is cancelable by you [or me] any time. My broker fee is one month RMR; the RMR calculated at the closing and used to compute the purchase price; it’s paid at closing. Legal fees are based on hours devoted to legal work, not broker work. Concierge Clients get 10% off legal fees. It’s often hard to figure out what the legal fees on a deal will end up being because we may not know size of the deal, the complexity of the deal, or the buyer, some of whom are represented by what I consider unreasonable and difficult to deal with and represent buyers who are inflexible in terms. These deals cause the legal fees to triple. If I am brokering I won't even show these buyers the deal, but you might bring them in on your own forcing me to deal with them. Of course having handled hundreds if not more than a thousand of deals I have a pretty good idea of what legal fees you should expect. They can range from $3500 to $7500 on smaller deals [$2000 on very small deals] to $25K to $50,000, or more if very sizable and complex deal. There are a slew of things you need to know before getting started with selling your business [to some extent, same if you are buying a business]. The first call should be with a lawyer, not any other professional. You need the lawyer to help you with the contractual relationship with all the other professionals. You may want to start by getting an idea what you can expect on a sale [or purchase] and you can get good idea at Whats My Alarm Company Worth. So, when you’re ready, contact me directly. ************************* STANDARD FORMS Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com *************************** CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** ALARM ARTICLES: You can always read our Articles on our website at ww.kirschenbaumesq.com/page/alarm-articles updated daily ******************** THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily ************************* Wondering how much your alarm company is worth? Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth ****************************** Getting on our Email List / Email Articles archived: Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. You can read articles and order alarm contracts on our web site www.alarmcontracts.com ************************** Ken Kirschenbaum,Esq Kirschenbaum & Kirschenbaum PC Attorneys at Law 200 Garden City Plaza Garden City, NY 11530 516 747 6700 x 301 ken@kirschenbaumesq.com www.KirschenbaumEsq.com
