Associate Buyouts - Better Than You Think
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Many small firm owners wrongly assume that finding a third-party buyer hoping for a more lucrative deal is preferable to making an internal deal with an associate. At times, that is true, but more often than not, it is not. Owners should be more receptive to the exit strategy of selling to associates. Let’s first debunk some assumptions owners make when comparing the two options. ... Read More
The Three “Do Nots” of Law Firm Buyers
I’ve written before about how buying a law firm can be a very effective, low-risk, and low-cost means to grow a practice. That said, what is it about the legal profession that, on occasion, makes it more challenging to sell a practice than hoped? As a consultant and coach, I’ve worked with hundreds of lawyers of all shapes and sizes in virtually every state and practice area. From that experience, I’ve become somewhat of an expert in understanding the DNA of those in our profession. Here are three fundamental truths in the DNA that impact buyer behavior. I call them the “do-nots.” ... Read More
Removing Succession Planning Obstacles
With so many lawyers contemplating retirement, your law firm succession plan has never been more important. Take a careful look at your law firm’s most influential leaders and biggest rainmakers. Chances are good that these individuals will be retiring over the next decade. Is your law firm prepared for this seismic generational transition? The impact will be felt well beyond the law firm itself. ... Read More
Categories: Retirement/Succession
The Contingent Exit Strategy
I recently worked with two elder solo attorneys in excellent health. They wanted to work 2-3 more years at almost a full-time pace. However, they were old enough and wise enough to know that a sudden health issue could derail all of that if they didn’t make a plan soon. I’ve written before about the risks of dying at your desk. Suffice it to say that if that occurs, you leave a mess for clients, staff, and especially grieving spouses and children. Further, selling a practice is way more difficult without the owner around. And even if it can be done, it is usually at fire sale terms. ... Read More
When Selling A Law Firm Was Unethical
For years, selling a law practice was prohibited because ethics regulators believed clients, files, and a firm’s goodwill were not something that could be sold. Regulators feared that clients would be treated like merchandise. Other ethics worries included the possibility of sharing fees with a non-lawyer (spouse of a deceased lawyer) and the ban on payments to anyone for recommending the lawyer’s services. ... Read More
Adding Partners When You’re a Small Firm Owner
You’ve successfully owned your law firm for a decade and have employed two lawyers for most of that time. Both are all pretty decent but are not superstars. One day, they come to you and ask about the possibility of becoming partial equity owners. Your initial thinking is “I knew this day would probably come. Now, what do I do?” Well, here’s what you do.
... Read MoreHave You Prioritized Your Exit Strategy Goals?
Lawyers are typically not a reflective lot. We rarely spend time taking a step back to ask, “What am I trying to accomplish here?” Instead, most lawyers just “shoot and then ask questions.” This dynamic is present at the time of retirement when determining an exit strategy. And even when the timing of the exit is carefully thought out, the goals are often not. ... Read More
Why Lawyers Procrastinate on Succession Planning
Some of my clients are estate planning lawyers. When I recently followed up with one of them, I came across an excellent blog post by this particular lawyer titled “A Baker’s Dozen of Why People Procrastinate About Their Estate Plan.” I had always suspected that the people who delayed putting their estate plans in order were similar to the small firm owner-lawyers I know who avoid succession planning. ... Read More
Phasing Into Retirement
Whether a lawyer works in a firm or as a solo, he or she does not close up shop one day and ride off into the retirement sunset the next. Many lawyers gradually wind down their practices—over months or years—and transition to part-time before retiring completely. Historically, law firms use the “of counsel” designation for lawyers nearing retirement. ... Read More
Take the Money and Run? Factors to Consider Before Accepting a Big Law Job Offer
Even casual observers of the goings-on in Big Law know the Great Resignation, as with the rest of America, has not spared the legal profession. That fact, combined with the surprising and continuing high demand for Big Law services, means that you couldn’t ask for a better job market if you are an associate seeking greener pastures. Here are a few tips when considering a Big Law job offer that seems too good to be true. ... Read More
How to Transition Clients When Succession Planning
If you’re a solo or small firm owner thinking of selling your law firm, for certain practice areas, transitioning repeat clients to the buyer is key. Indeed, the primary reason your firm has value and has a willing buyer are those client relationships that took years to build. Transitioning clients successfully requires managing and finessing human relationships, a task that—even with the best of intentions—is never easy. Everyone has the same goals, including quality, predictability, and trust. Will your successor meet your existing clients’ goals? ... Read More
The Often-Forgotten Risks of Dying at Your Desk When You’re a Solo or Small Firm Owner
I’ve got some good news and some bad news. First, the good news. Men in the United States aged 65 can expect to live 18.2 more years on average. Women aged 65 years can expect to live around 20.8 more years on average. The bad news is that some lawyers read that and somehow think that they can practice that long. ... Read More
What’s New in Law Firm Ownership?
Most lawyers are familiar with Rule 5.4 of the Model Rules of Professional Conduct. In a nutshell, it says that lawyers must own law firms. Virtually every state adopted the rule. The purpose is supposedly to prevent nonlawyers from interfering with a lawyer’s independent and professional judgment. ... Read More
So, What’s My Law Firm Worth?
It should come as no surprise that the question most prospective clients ask me is, “What is my law firm worth?” My response is always as follows: Imagine it’s Friday afternoon and you ride off into the retirement sunset never to return to the practice of law. Then, on Monday morning, the phone rings at your old desk, and your successor answers. ... Read More
Remember the Basics of Job Interviewing
Lawyers have a reputation for being prepared. Yet it never ceases to amaze me how poorly lawyers prepare for job interviews. Although I have no hard proof of this, my experience working with lawyers has shown they’re typically woefully unprepared. Instead of preparing, they wing it, thinking they’re smart enough to impress whoever is on the other side of the table or, nowadays, whoever is on your Zoom screen. ... Read More
Buying a Firm That’s Dependent on Marketing & Advertising Dollars
When purchasing a law practice, buyers seek revenue they ordinarily could not obtain on their own. For example, buyers hope that, with the proper introductions, the relationships that a seller has with repeat clients can be successfully transitioned to the buyer. The same can be said for a seller’s referral network, be they former clients or other professionals. ... Read More
Strategic Planning Information Sources
A basic premise of strategic planning is to gather information to know who you are as a law firm. After all, if you don’t know who you are, how do you know where you want to go and whether you can realistically get there? What’s most important during the strategic planning process is gaining an understanding of the firm from the inside and the outside. Firm culture addresses the former; reputation addresses the latter. ... Read More
Pricing a Law Firm When Selling to an Insider
I always tell clients that my appraisal provides an excellent starting point for negotiating the price of a law firm with an insider, but that it is unlikely that it will be the final word. While it may sound like a cliché, for most small firm insider deals, parties ultimately agree on a price that seems “fair.” ... Read More
Top 6 Reasons to Hire a Paralegal Over a Lawyer
Your solo or small law firm is busier than ever and you desperately need another warm body to complete the work. Resist the knee-jerk reaction to hire another lawyer. Instead, assess whether hiring a paralegal can fill the need. You’ll find that in most practice areas it can. ... Read More
Pro Bono: Doing Good Feels Good
In these pandemic days, many Americans have taken economic hits that have only led to further legal problems. But those less fortunate are often left to face their legal problems alone because they can’t afford legal counsel. I strongly suspect that, for most readers of this post, the economic hit you’ve felt has been minimal in comparison. If you think you know where I’m going with this—you’re right. The time is ripe to pursue pro bono work if you’re not already doing it. Pro Bono Work Is Our Social Responsibility Lawyers have a special responsibility to give back. Why? Our society provides us with an exclusive license to do what we do. What we do provides countless opportunities to make a respectable and, for many, a lucrative… ... Read More
