How to Transition Clients When Succession Planning
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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
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
Buying a Law Practice: Not as Risky or Complicated as You Think
Purchasing another lawyer’s practice is fast becoming a popular and more common way to grow or diversify one’s law firm. There are three main reasons for this: ... Read More
Paying a Premium for a “System”
Appraising a law firm requires assessing numerous factors. During the appraisal process, some attorneys will say to me something along the lines of, “In my law firm, I’ve got this great system that can…. That alone should be worth…” The marketplace for law firms doesn’t work like that, however. Here’s why. ... Read More
Assessing a Law Firm’s Revenue: All Is Not Created Equally
One of my truisms for valuing a law practice is that “all revenue is not created equally.” For example, revenue that stems from past clients or one’s referral network is far more valuable than the revenue generated from seminars or webinars. ... Read More
Finding Buyers for Your Law Practice
There are a variety of ways to find buyers. Some attorneys try to do it on their own. From a DIY perspective, usually the best ways to get the word out that you’re looking for a buyer are through networking and advertising. Others who don’t want to take the time and effort to find buyers on their own rely on consultants and brokers. Besides saving time, using outside experts provides other advantages from the DIY method. They include: ... Read More
Categories: Selling Your Practice
Including Office Space as Part of a Law Firm Sale?
Small-firm owners and solo practitioners looking to sell their law firms frequently believe that their particular office space—whether owned or leased—significantly enhances the value of their practice. They usually base this belief on the office’s superior location or their upscale furnishings and design. ... Read More
Categories: Selling Your Practice
Succession Planning Scenarios for Solos & Small Law Firm Owners
For solo practitioners and small law firm owners seeking retirement, here is a quick, down-and-dirty summary of the succession plan strategies available to you. Put another way, here are three structural ways that soon-to-be retired lawyers can “sell” their practices. ... Read More
Preparing Your Practice for Sale? Don’t Do Stupid S**t.
Soon-to-be retired solo practitioners and small law firm owners who are thinking of selling their law firms frequently ask, “Is there anything special or unique that I should do now to maximize my practice’s value?” Whenever I hear that question, I can’t help but think of President Obama’s remark about how to best manage world affairs: “Don’t do stupid s**t.” That advice holds true for lawyers contemplating selling their practice. ... Read More
Categories: Selling Your Practice
Appraising a Law Firm for a Buy-In: CPA’s Need Not Apply
You own a small law firm. For the first time, you want to make one of your associates a partial owner. But how do you determine the price of admission for the “buy-in?” ... Read More
Categories: Selling Your Practice
A Rule of Thumb for Valuing a Law Practice Is Not to Use the Rule of Thumb
Solo practitioners and small law firm owners wanting to know what their practices are worth frequently rely on the “rule of thumb” valuation method. ... Read More
Categories: Selling Your Practice
