Slager co-founded his firm to offer a more efficient approach to corporate M&A, including fixed fees
Ben Slager is the CEO and co-founding partner of Mogan Daniels Slager, a corporate boutique in Vancouver. Canadian Lawyer recently recognized his firm as one of the Top Corporate Boutiques in Canada.
For our CL Talk podcast, he spoke to us about why he founded his firm and chose to focus on fixed-fee structures, how he structures deal teams to enhance efficiency and why the entrepreneurial spirit guides his approach to leadership and serving clients.
Listen to our full podcast episode here:
This episode can also be found on our CL Talk podcast homepage, which includes links to follow CL Talk on all the major podcast providers.
Below is a summary of the conversation, edited for length and clarity:
I originally planned to be a litigator but had an early epiphany that I preferred putting deals together rather than tearing contracts apart. I started my career at Lawson Lundell, a large regional firm in Western Canada, where I worked in their corporate M&A group. I quickly realized that M&A aligned with my interests and decided to focus on that area. However, in a large firm, especially as a junior or senior associate or a junior partner, you have little influence. I had specific ideas about how a corporate M&A firm should operate, so I decided to move to a smaller platform where I could have more say.
When we first launched, we faced a brand issue. As a new boutique M&A firm, people were familiar with the individual names – Mogan, Daniels, and Slager – but not with what our firm, Mogan, Daniels, Slager LLP, stood for or how our approach to M&A differed. We quickly set out to distinguish ourselves with a strong entrepreneurial focus. The three founders, being active investors with entrepreneurial mindsets, introduced several innovations. For instance, 13 years ago, we implemented a fixed fee for M&A services, something a few firms had tried but failed to sustain. We also restructured the M&A process by using more senior professionals and fewer juniors, creating efficiencies and a different deal team architecture. At that time, and still today to some extent, many firms relied on large teams of junior staff, partly for training and partly because it increases the total billable hours. We chose a different path.
Offering a fixed fee for M&A services is challenging and requires a sustainable approach, which we've developed through years of experience and numerous deals. We've learned from our mistakes, taken some significant write-offs, and refined our fixed-fee process. Now, we assess 12 or 13 key elements for each deal, such as whether there are audited financial statements or who the opposing counsel is, before setting a fixed fee. While I can't reveal all the factors we consider, it's a complex process.
The initial motivation for offering a fixed fee was to bring more peace to the M&A process by eliminating the anxiety clients often feel about receiving a large, unexpected legal bill at the end of a deal. By addressing costs upfront, we become a line item in our clients' financial models, like M&A advisors or investment bankers. This approach leads to more frequent communication with clients during the deal, as they feel secure knowing their legal costs are fixed. As a result, we often learn about potential issues earlier in the process, allowing us to address them proactively. This early awareness helps avoid last-minute surprises, which is crucial in M&A transactions.
There are only a couple of industries we don't work in, such as mining and real estate services. Instead, we focus on the entrepreneurial sector, primarily assisting company founders. These founders might have spent decades building their businesses and are now selling through an auction process, often with the emotional stress of parting with something they’ve nurtured. In tech, the timeline may be shorter, but the process of selling a "child" and moving on to the next venture brings its own challenges. We also work on the buy side, representing private equity groups and family offices, which are typically entrepreneurial and highly acquisitive. Over the past 13 years, our firm’s DNA has been deeply rooted in this entrepreneurial spirit.
It’s like branding in that it’s more about what others perceive than what I say it is. But from my perspective, after two years in a leadership role following significant restructuring at MDS, I’d describe my style as entrepreneurial. I aim to be responsive, nimble, and efficient, centralizing decision-making and encouraging real-time feedback rather than relying on formal, infrequent reviews. I also emphasize deep delegation, empowering my team by trusting them to think independently and valuing their input, even though I’m naturally a bit of a perfectionist and control oriented. Lastly, I try to take a human approach, focusing on people over systems. I believe in allowing room for the complexities of life, offering grace when mistakes are made, and understanding that people’s personal circumstances can impact their work. This people-first approach remains important to me, even in an era increasingly influenced by AI.
The legal profession is generally slow to adopt new technologies, with only a few firms and individuals on the margins being early adopters. This cautious approach is beneficial, as demonstrated by a recent case where a lawyer used AI for litigation, leading to significant errors and embarrassment. I view AI as being in its "toddler stage" and not yet ready for the kind of complex, intentional work we do in corporate M&A and venture capital.
For example, our AI subcommittee recently spoke with a Canadian company developing an AI-driven pricing model for deals. During the call, we realized that by sharing our pricing strategies, we were contributing to their language model, essentially giving away proprietary knowledge. This highlighted that AI is not yet applicable to our work. However, I acknowledge that AI will become more relevant in the future, possibly in a few years, as it matures.
Outside of tech, one significant disruptor in M&A has been the introduction of representation and warranty insurance. In the US, this has been around for about 12 years, and in Canada, it's become prevalent in the last eight years. Now, 50-60 percent of deals over $25 million include this insurance, simplifying the process by eliminating the need for complex indemnities and escrows. This has made certain deals easier to execute, although it has removed some of the intellectual challenges involved in structuring deals.
While we're exploring technology to improve efficiency, such as virtual access to corporate records and deal-closing software like Closing Folders, these tools haven't significantly changed the M&A process. Apart from representation and warranty insurance, there hasn’t been a major technological shift in how real-time, negotiated deals are conducted in the past 15 years.
The market has undergone significant changes over the last two and a half years, especially with rising interest rates and the post-pandemic environment. In venture capital, investors are delaying enterprise valuations due to ongoing uncertainty, opting for instruments like convertible debt and SAFEs (Simple Agreements for Future Equity) instead. These tools defer pricing discussions until a larger financing event occurs. We've also seen a significant drop in valuations. For example, deals that were priced at $50-70 million pre-money in 2020-2021, even with just $2-3 million in annual recurring revenue (ARR), are now more disciplined, with $5 million enterprises generating $500,000 to $1 million in ARR.
In private equity and M&A, there's been a noticeable increase in earn-outs, with some reaching as high as 30 percent of the deal's value. Earn-outs are being used in 40-50 percent of deals to bridge valuation gaps between what sellers believe their businesses are worth and what buyers are willing to pay. Deals are also taking longer to close with the exception of this past June when the capital gains tax rate changed. Deals are averaging 30-40 percent more time due to increased due diligence and a more cautious approach from buyers. This contrasts sharply with the rapid pace and "irrational exuberance" of 2020 and 2021.
We certainly need junior and intermediate lawyers on our deal teams, as their concentrated experience in M&A often surpasses that of lawyers at other firms with the same years of practice. For example, a lawyer with four or five years of experience here may have the M&A expertise of someone with eight or nine years because of the volume of deals we handle.
Reflecting on my own career, I initially wanted to be a litigator with aspirations of becoming a judge. However, I realized that corporate law was more aligned with my nature as a peacemaker rather than someone who looks for vulnerabilities and gaps, which is more typical in litigation. I often advise young lawyers to consider their own nature and find an area of law that aligns with it. Understanding what causes you stress and where you thrive is key to choosing a sustainable career path.
For those interested in corporate law, especially M&A, I stress the importance of speaking the language of M&A, which is closely tied to accounting and business valuation. Understanding concepts like EBITDA, working capital, and accruals is crucial. Without this knowledge, a lawyer may only become a good corporate lawyer but never a great one. Developing a functional level of literacy in these areas is essential for building a strong foundation.
I also advise young lawyers to be aware of the areas of law that may be disrupted by AI, such as those involving rote processes, heavy use of templates, or large volumes of documents, like litigation discovery. To future-proof their careers, I recommend focusing on developing emotional intelligence (EQ) and interpersonal skills, as these create a protective moat against the advancing technologies in our profession.
Receiving recognition was a meaningful internal validation for us. From the start, we were insecure as founders despite believing in our novel model. We knew that large national or US firms seeking M&A counsel in Canada might not take a chance on a small, up-and-coming boutique like ours. This insecurity drove us to work harder and build stronger discipline around pricing, firm architecture, and internal KPIs.
When we received that recognition, it was tempting to relax. However, we realized that maintaining a bit of that insecurity is healthy – it keeps us motivated to strive for excellence, improve customer service, and deliver deals with greater intelligence, efficiency, and value. While the recognition was validating, it also reminded us not to rest on our laurels but to keep pushing forward.
