How to Hire a Securities Attorney for Your Syndication
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Most sponsors need a securities attorney at some point: to choose the exemption, prepare the offering documents and make sure filings happen. Hiring the wrong one can cost more than their fees. This guide explains what to look for, how fees work, what to ask and what to watch out for. It is general information and not a recommendation of any firm.
What does a syndication attorney do?
| Task | Detail |
|---|---|
| Choose the exemption | 506(b), 506(c), or something else. See 506(b) vs 506(c) |
| Structure | Entities, management, waterfall. See operating agreement |
| Offering documents | PPM, subscription agreement, operating agreement. See documents checklist |
| Filings | Form D and state notices. See Form D and blue sky |
| Advice during the raise | Marketing, communications, investor questions |
| Updates | Supplements when terms change. See PPM supplements |
How do you find and vet one?
- Ask sponsors you respect who they use and why.
- Look at filings. Form D filings on EDGAR sometimes name the counsel, and sponsors you admire may share who they use (EDGAR).
- Check licensing and discipline with the state bar.
- Interview two or three. Ask how many real estate Regulation D offerings they handled in the last year.
- Ask for a sample scope and fee letter.
What should you ask?
- How many multifamily syndications have you worked on, and what size?
- Who will do the drafting, and who will I speak to?
- How do you charge: flat fee, hourly, or a mix? What is included and excluded?
- What is your timeline from kickoff to documents ready?
- How do you handle Form D and state filings?
- How do you handle changes after investors have signed?
- Do you represent anyone else in the deal, such as the lender or the seller?
- What will you need from me, and by when?
How do fees work?
Common structures are a flat fee for a defined package of documents and filings, hourly billing for advice, or a retainer. A flat fee gives certainty, but check what counts as a change. Hourly billing can fit questions that do not have a defined scope. Ask about costs for state filings, which are separate from legal work. See cost to form and run a syndication and DIY, law firm or platform.
What are the red flags?
- The lawyer has never done a real estate syndication, or "does a little of everything."
- No written scope or fee.
- Promises that there is "no risk" of losing the exemption.
- Re-using another sponsor's documents without editing them to your deal.
- Slow replies before you have paid anything.
- They represent investors and the sponsor in the same deal without explaining the conflict.
Our take
A good securities lawyer is cheaper than fixing a mistake, and the best ones tell you what not to do. Hire early, before you post anything about the deal.
Trade-offs and who this is not for
- Not a reason to skip your own learning. You need to understand the structure you sign.
- Common mistake: hiring a friend who practices another kind of law.
- Not an endorsement of any firm.
How DoorRaise fits in
DoorRaise helps sponsors raise equity for apartment buildings with 5+ units from friends and followers who already trust them, under Rule 506(b) or 506(c). We are software, legal document preparation, escrow coordination and verification services. We are not a law firm, broker-dealer, investment adviser, funding portal, bank or escrow agent, and we do not hold investor money: investors wire their money to escrow at Enterprise Bank & Trust, in the deal's name.
DoorRaise keeps the deal in its own company with its own documents and a deal page, and runs an accreditation check on every investor, in 506(b) and 506(c) raises. Flat fees, never a percentage of the raise (see pricing). Create your free sponsor page.
FAQ
Do I need a securities attorney for a syndication?
It is strongly advised. The attorney helps with the exemption, documents and filings.
How much does a syndication attorney cost?
It varies by firm, deal and scope. Get a written quote.
Can one attorney represent both me and my investors?
Usually the attorney represents the sponsor. Investors should consider their own advice.
Should I use a template instead?
Templates can lower cost, but they need to fit your deal and be reviewed against your facts.
Sources
This article is general information, not legal, tax or investment advice, and not an endorsement of any lawyer or firm. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.