Financial and Legal Advisors in Merger and Acquisition Transactions
Richard F. DeMong, Ira C. Harris, Susan P. Williams

Abstract
Merger and acquisition (M&A) transactions are a fairly infrequent corporate activity for many managers, so the engagement of external advisors (e.g., investment bankers, lawyers) is commonly observed. But, under what circumstances do managers hire these advisors? Does it matter how the target firm is represented? How does the reputation of the advisor affect the decision to hire one or more advisors? Our study addresses these questions and others that involve the engagement of advisors in the M&A context. We find that after controlling for size, acquirer firm engagements of financial and legal advisors are positively related to acquisition complexity, advisor reputation, and the decision of the target firm to expand the advisory team.

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