4 Tips for Transferring Ownership of Your Law Firm
Over the past few years, the legal industry has experienced a surge in the number of solo and small law firm sales. Why? Because an increasing number of attorneys are realizing that once they reach retirement age or seek to exit the profession, selling their law practice is a more lucrative decision than the typical successorship/partnership model.
So what does selling your law firm mean?
When selling your law practice, you can follow the following two paths:
- Internal Selling and Succession Planning: This entails internally transferring the ownership of your law firm to a partner or income partner(s).
- Marketplace Selling: This occurs through a transitional purchase by an outside law firm or attorney.
Whichever path you follow, do the following to close a lucrative and hassle-free sale:
Value Your Law Firm
This is the first and most critical step.
Valuing your law firm will help you set reasonable expectations and make reasonable offers. This process will require you to have a good understanding of business function tangibles and intangibles.
Law firm valuation requires an expert approach. Hire a professional to value your law firm. This will help you avoid the risk of undervaluing or overvaluing your practice.
Find a Buyer
Finding a buyer for your law firm is the most taxing part of the selling process.
Selling your law firm on your own? Don't worry. Create an enticing listing of your law firm and post it on your local bar association's forum or listserv. Alternatively, you can post it on general business listing websites like Craigslist.
If you do not have any buyer in mind, a full-service broker might save you the agony of finding one and hasten the sale process.
Negotiate Your Sale
To ensure your sale is expedient and profitable, hire a law firm broker.
It is not advisable to negotiate the sale of your firm. Chances are that you might encounter challenges that may prevent you from making a profitable sale.
Notify Your Clients
Notifying your clients about the awaiting sale is a strong client retention strategy. Client retention is a major concern for attorneys. This is because, under the law, clients can dissociate freely from a law firm when the practicing attorney exits the profession. But with an experienced law firm broker, this should be the least of your concerns. The broker will help you develop an effective client-retention strategy designed to transfer value from the seller to the buyer. Selling your law practice is an extremely personal decision to make. With these tips, be sure to make the process celebration-worthy. Seeking to transfer ownership of your law firm? Contact us today to help you start with the valuation process.