If you’ve built your law practice but no longer want to run it, and you have no partner or protégé to pass it on to, you might be wondering whether you can sell your law firm. Selling your firm is a great way to ensure your business legacy lives on. And the investment you have made into your business over the years pays off. But the process of finding a buyer and then selling your firm can be tricky, particularly if you’re a small firm or solo.
Selling your practice is a viable option to obtain a return on the investment of time, money, and energy you’ve put into building your firm and to help you prepare for retirement. By governing the sale of your law firm, you can also ensure your clients are left in safe and trustworthy hands, even after you’ve moved on from the law firm. Here’s how to sell your firm and receive the maximum value for you, your employees, and your clients.
Identify Your Goals and Timeline for Leaving
Before you sell your law firm, you need to clarify why you are leaving your law firm and establish a timeline for your departure. The ABA requires that a lawyer can only sell a firm if they agree to no longer engage in the private practice of law. Or in the practice area or geographic area of the law firm being sold. This means that, as the seller, you need to be sure that moving on from practicing law, or at least practicing in your area or location, is what you want to do. You also should determine when you will leave your law firm, as this information will help to engage and inform buyers.
Value Your Firm
If you’re thinking about selling your firm, you need to know how much your firm is worth. Determining the value of a law firm can be tricky, and there’s no “one size fits all” solution. Every firm needs to be considered for its characteristics, attributes, and merits. You should expect to hire an experienced consultant to help you identify an accurate and realistic valuation for your firm. If you’re unhappy with the value of your firm, don’t blame the consultant! Instead, work on making your firm more valuable to another buyer. Some of the ways that you can maximize the value of your firm before sale are increasing your profits, diversifying your revenue, implementing processes, growing the practice, and reducing overhead.
Find Your Ideal Buyers
Just like finding your ideal clients will help your law firm succeed, identifying your ideal buyers will help your law firm sale be successful. There are many ways to connect with potential buyers, such as online, word of mouth, or through a consultant. Before you sell, you are going to want to get to know your buyer as well. After all, they will be representing the business name and brand that you built.
Structure Your Sale
You’ve found your ideal buyer and clarified the value of your firm. Now it’s time to navigate the actual process of selling your firm. As the seller, you will need to do your due diligence and complete all necessary paperwork and records. You also need to wait the mandated time – at a minimum plan for 90 days – to complete a sale, although experts report that transactions can take up to 24 months. It’s also important to inform clients and make them aware of the firm’s sale. The ABA states that clients must be informed. It can be helpful to do this with letters of introduction as well as face-to-face meetings.
Selling your law firm can be a prolonged and challenging process. It’s essential to get the maximum value for your firm and the best outcome for you and your clients. Working with an experienced consultant throughout the sale process can help ensure you get the best value for your firm. While allowing you to easily transition to retirement or the next stage in your career.