Tail period

Definition

The window after an engagement ends when a fee is still owed.

Why It Matters

Advisors negotiate it so a seller cannot fire them and close next month with a buyer they introduced, which is fair enough to protect. Where it goes wrong is scope: a long one running against every party the advisor ever emailed can make an unrelated second process expensive. Ask for it to run only against a written list of named buyers delivered on the day the engagement ends, and ask how many months it runs, before signing rather than after.

In numbers: A 12-month tail on an 8% fee means a sale closing eleven months after termination still owes roughly $240,000 on a $3M price.