Episode 536 Legal Best Practices for Agency Sales with Sharon Toerek

Jan 11, 2026

In this conversation with Sharon Toerek, an attorney specializing in agency legal issues, critical insights on agency M&A are unveiled. Sharon stresses the importance of legal readiness to avoid costly delays. She shares practical tips on managing client contracts and employee agreements to ensure agency valuations remain secure. The duo discusses protecting intellectual property and managing documentation effectively. Listeners gain actionable steps for establishing robust legal foundations, setting the stage for smooth transactions and sustainable agency practices.

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ADVICE

Centralize Client Contracts Immediately

Centralize and catalog all client contracts so you can find and summarize them quickly during due diligence.
Track key terms like assignability, renewal dates, and notice requirements to avoid deal delays or valuation discounts.

ANECDOTE

Handshakes Can Sink A Sale

Many long-standing client relationships rest on handshake deals or no contract at all, which scares buyers and lowers valuation.
Sharon and Drew have seen this repeatedly derail or discount transactions in real cases.

ADVICE

Document Employee And Contractor Terms

Document employee and contractor relationships with consistent contracts and policies so buyers can assess talent transfer risk.
Use written covenants and onboarding docs to protect IP ownership and reduce post-sale disputes or retention gaps.

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Welcome to another insightful episode of Build a Better Agency! This week, host Drew McLellan tackles the critical—yet often underestimated—legal side of agency mergers and acquisitions. Joined by agency law specialist Sharon Toerek, Drew explores all the ways agencies can better prepare for buying or selling a business and avoid the legal pitfalls that can delay deals, drive up costs, or even kill transactions entirely.

Sharon Toerek shares from her first-hand experience helping agencies on both the buy and sell side, breaking down the foundational legal elements every agency owner needs—whether or not they plan to sell someday. Together, they dig into everything from the importance of robust client and employee contracts, to protecting intellectual property, to the necessity of having proper corporate governance documents in place. Sharon explains how missing or incomplete contracts can erode agency valuations, scare buyers, and create costly last-minute headaches.

The conversation also covers the nuances of deal documentation, the significance of a well-prepared due diligence process, and the real-world "war stories" that illustrate why legal readiness matters so much. Drew McLellan and Sharon Toerek offer listeners practical, actionable steps to start shoring up their agreements, documents, and internal processes now—not just in anticipation of a sale, but as fundamental best practices for running a sustainable, valuable agency.

Don't miss this episode if you want to eliminate unnecessary risks, maximize the value of your agency, and ensure a smoother M&A journey whenever the time comes. By the end, you'll have a to-do list that can strengthen your agency's foundation today and set you up for a more profitable, stress-free exit tomorrow.

A big thank you to our podcast's presenting sponsor, White Label IQ. They're an amazing resource for agencies who want to outsource their design, dev, or PPC work at wholesale prices. Check out their special offer (10 free hours!) for podcast listeners here.

What You Will Learn in This Episode:

- The critical role of client contracts and why agencies need to centralize and consistently document them
- The importance of up-to-date employee agreements and talent documentation to protect agency value
- Intellectual property as a major driver of agency valuation (and how to properly identify and secure IP assets)
- The need for clear, accessible corporate governance and owner agreements to prevent deal slowdowns
- Why preparing legal foundations early smooths M&A transactions and safeguards potential deal value
- How lack of organization or missing documents can delay, diminish, or even derail agency sales
- Proactive legal preparation as both a best practice and a profit generator for agencies