The Importance of the Engagement Letter

In the relationship between investment bank and client, the engagement letter is the most important agreement. A recent article from Axial highlights this contract and offers insight on the seven most important points to cover in any engagement letter.

The author says that, “When negotiated and structured properly, this contract can be remarkably powerful in aligning the investment banker’s interests with yours.”

In order to align those interests most effectively, the article highlights seven critical points to cover in an engagement letter. Those points include fee structure, exclusivity, length, termination, tail period, expenses and coverage.

The engagement letter has the potential to set the relationship up for success. According the author, “It has an overwhelming effect on the quality and depth of the investment banker’s duties to the client.” We couldn’t agree more.

To read the full article, please click here.