There's a version of this story where everything about the deal makes sense. The seller is ready, the buyer is qualified, the price is fair, the structure works for both sides, and the financing is in place. And then the buyer's attorney gets involved and the entire transaction slowly collapses over the next 4 to 6 months without anyone being able to explain exactly what went wrong.
What went wrong is that the attorney's incentives diverged from the deal's outcome, and nobody caught it early enough to course correct.
This isn't an attack on attorneys. Good healthcare transaction counsel is one of the most valuable assets either side can have, and the physicians who close deals successfully almost always have strong legal representation guiding them through the compliance, regulatory, and structural complexity that makes healthcare M&A different from every other kind of business transaction. But there's a meaningful difference between an attorney who works toward closing and an attorney who, whether through inexperience, misaligned incentives, or personal friction with the other side, becomes the reason the deal never gets done. Understanding that difference before it costs you is the entire point of this conversation.
The Hourly Billing Problem
The most common structural misalignment in healthcare transactions is also the most obvious one: the attorney is billing hourly while every other party at the table is motivated to close as quickly as possible. The seller wants to move on, the buyer wants to start operating, the broker wants to earn their commission, and the CPA wants to file the returns. Meanwhile the attorney, who may genuinely want the deal to succeed, is being compensated in a way that rewards thoroughness and punishes speed.
This doesn't mean every hourly attorney is slow-walking a deal on purpose. Most aren't. But the billing structure creates a gradient where there's no financial cost to requesting one more revision, raising one more concern, or scheduling one more call to discuss a provision that could have been resolved in an email. Each of those increments adds a few hundred dollars to the invoice and a few days to the timeline, and neither the attorney nor the client feels the cumulative impact until the deal is in month 5 and both sides are wondering how they got there.
For context, competent and aligned counsel can typically close a sub-$3M medical practice acquisition for somewhere between $12,000 and $20,000 per side on a flat or capped fee. If your legal bill is climbing past $30,000 and you haven't signed anything yet, the problem is almost certainly not the deal. Something in the process around the deal has broken, and the billing structure is usually the 1st place to look.
Setting timeline expectations at the outset changes everything. An attorney who knows the client expects transaction documents finalized in 60 days behaves differently than one who has been given an open-ended mandate to "make sure everything is right." A clear statement of how many rounds of revision are acceptable before the deal needs to be escalated or restructured puts a boundary on the process that the billing structure alone will never provide.
The Adversarial Attorney
Hourly billing is a structural problem, but the adversarial attorney is a behavioral one, and it's far more destructive.
An adversarial attorney approaches the transaction as a negotiation to be won rather than a deal to be closed. Clauses become opportunities to extract concessions, redlines become signals that the other side needs to give more ground, and the entire correspondence gets filtered through a lens of who is gaining advantage rather than whether the deal makes sense for both parties.
In a healthcare transaction, this behavior is especially damaging because the regulatory complexity provides nearly unlimited ammunition for an attorney who wants to slow things down. There's always another compliance concern to raise, another regulatory provision to cite, another structural question that "needs to be resolved before we can proceed," and the supply of these objections in healthcare is essentially infinite. An attorney who is genuinely trying to protect their client raises these issues early, addresses them efficiently, and moves forward. An adversarial attorney raises them strategically, times them to create maximum leverage, and uses them to reopen provisions that were already settled.
The most reliable signal that you're dealing with an adversarial attorney is when issues that were resolved in prior drafts keep reappearing in new language. If a provision was negotiated, agreed upon, and documented, and then the next draft arrives with that provision materially altered or removed, the attorney isn't protecting their client. They're relitigating the deal, and every round of relitigation adds weeks to the timeline and erodes the trust between the principals.
When Attorneys Develop Personal Friction
The single most destructive dynamic in a healthcare transaction is when the attorneys on opposing sides develop a personal animosity that has nothing to do with the substance of the deal. This happens more often than most people realize, and once it takes hold it's almost impossible to fix because the attorneys will never admit that their personal feelings are affecting their professional judgment.
The pattern is predictable. One attorney sends a draft with aggressive language and the other responds with equally aggressive revisions. The tone of the correspondence shifts from professional to defensive to hostile. Each attorney starts characterizing the other's behavior to their client in ways that make the opposing counsel sound unreasonable, and the clients, who have no independent visibility into what's actually happening between the lawyers, start believing that the other side is acting in bad faith.
The 2 physicians who wanted to do a deal and who still want to do a deal find themselves trapped inside a conflict they didn't create, can't fully see, and don't know how to stop. Every conversation between the principals gets filtered through attorneys who are no longer trying to close the deal but are instead trying to win a professional contest that exists entirely in the legal correspondence. The deal dies not because the terms were wrong but because the channel through which the terms were being negotiated became poisoned and nobody opened a new one.
The way out is surprisingly simple: maintain direct communication between the principals outside of the legal channel. A 5-minute phone call between the seller and the buyer to confirm that both sides still want the deal can cut through months of attorney-generated confusion in a single conversation. If both principals want to close and both are willing to say so directly, the attorneys lose the ability to characterize the other side's intentions and the deal gets back on track.
Why Physicians Stay Trapped
The natural question at this point is why any physician would continue paying an attorney who is clearly obstructing their deal. The answer has less to do with the law and more to do with how sunk costs quietly reshape decision-making over the life of a transaction.
The 1st month feels productive, or at least busy enough to feel productive. By month 2, the fees are climbing but the attorney explains that the complexity justifies them. By month 3 you've spent $35,000 or $45,000 and you start wondering whether things should be moving faster, but you don't fire the attorney because you've already invested so much. By month 4 you're $60,000 or $80,000 deep and the thought of starting over with new counsel, re-explaining the entire deal, and losing another month of transition time feels worse than just pushing through with the person you have.
That's the trap. Each dollar spent makes the next dollar harder to question. Every week of accumulated billing raises the psychological cost of walking away from the engagement, and by the time the physician realizes the process has gone sideways, the exit feels more expensive than staying even though it almost never actually is. The attorney doesn't need to be acting in bad faith for this to happen. The billing structure creates the capture automatically, and the physician's own investment in the process is what locks the door behind them.
The physicians who avoid this trap are the ones who set a hard checkpoint before the engagement gets emotional. A standing review at the 60-day mark or the $20,000 mark, whichever comes first, with 3 questions: are we closer to signing than we were 30 days ago, can my attorney show me a 1-page timeline to close, and has the scope of work expanded beyond what I originally approved? If the answers are no, no, and yes, the engagement has drifted into capture territory and the cost of resetting counsel at that moment is a fraction of what it will cost at month 6.
The Attorney Who Doesn't Understand Healthcare
Healthcare transactions aren't standard business acquisitions. They involve regulatory frameworks that don't exist in other industries: Corporate Practice of Medicine restrictions, Anti-Kickback Statute compliance, Stark Law considerations, state-specific licensing requirements, credentialing, payer contract assignments, and a range of entity structuring issues that require specific expertise to navigate.
An attorney who is competent in general M&A but unfamiliar with healthcare-specific regulation will raise objections that sound serious but are practically irrelevant, or worse, will miss issues that actually matter while focusing on provisions that don't. Either outcome is expensive because the practice ends up paying for the attorney's education in real time, whether that means slowing the deal down while both sides explain how healthcare transactions actually work or creating compliance risk that nobody identifies until after closing when it becomes far more expensive to remediate.
The due diligence question that most physicians skip when selecting counsel is the simplest one: how many healthcare practice transactions have you closed in the past 2 years? Not how many you've worked on or been involved with, but how many you've actually closed. The answer tells you whether this attorney knows how to get a healthcare deal done or whether they're going to be learning on your transaction at your expense.
What This Costs
The cost of an attorney-driven deal failure isn't just the legal bills, although those can be substantial by the time 5 or 6 months of hourly billing have accumulated. The real cost is the opportunity that dies with the transaction.
A practice seller who spends 6 months in a failed transaction has lost half a year of practice value, staff stability, and patient confidence, along with the finite energy and motivation that drove them to start the process in the 1st place. The physician who goes through one failed transaction is significantly less likely to try again, and the practice that could have been preserved through a structured transition ends up closing instead.
A practice buyer who spends 6 months in a failed transaction has lost the opportunity cost of every other deal they could have been pursuing during that window. In a market where the number of solo ophthalmology practices available for transition is growing but the window on each individual practice is limited, 6 months of lost time can mean the difference between acquiring the right practice and watching it close or sell to someone else.
None of this is visible to the attorney who caused the failure because from their perspective they were doing their job: protecting their client, raising concerns, and negotiating aggressively. The disconnect between what the attorney believes they're doing and what they're actually costing their client is the fundamental problem, and it persists because most physicians don't have enough transaction experience to recognize the difference between protective counsel and obstructive counsel until it's too late.
How to Prevent It
The prevention starts before the attorney is hired. Counsel should have specific healthcare transaction experience with a track record of closed deals, not just deals they've worked on. Timeline expectations need to be set at the outset and ideally built into the engagement letter so that both the attorney and the client have a shared understanding of how long the process should take. And the principals on both sides should establish a communication protocol that keeps them in direct contact throughout the process so that attorney-to-attorney friction can never become the sole channel through which the deal progresses.
Most importantly, be willing to change counsel mid-transaction if the attorney is clearly obstructing rather than facilitating. This feels extreme and most clients resist it because switching attorneys mid-deal creates its own disruption and cost. But the cost of switching counsel in month 3 is almost always less than the cost of letting an obstructive attorney run the deal into the ground over months 4 through 8. The sunk cost of the existing legal bills isn't a reason to continue paying for obstruction, and the physicians who internalize that early enough to act on it are the ones who end up with a closed transaction rather than a stack of legal invoices and a practice that never changed hands.
This article is for general educational purposes and is not legal advice.
Verdira is a healthcare acquisition platform focused on ophthalmology practices, built around physician ownership, transparent structure, and no volume quotas. If you're navigating a practice transaction and want to understand how to structure the process for a successful outcome, we're open to thoughtful conversations.
Contact info@verdira.com | 307-381-3734 | verdira.com
