Succession Planning Part 1: What are my options to exit?
We are commonly asked by our clients looking to exit their legal practice “what are my options to exit?”
There are 4 main options to exiting your legal practice. They are:
1. Merge your firm with another firm.
2. Sell your share to existing Partners or employees of the firm or hire new Partners or employees to take over.
This can be an external appointment or an internal appointment to an existing employee. For example: you may hire someone now with the plan they take over within 3 – 5 years. Your exit at the end of this period may be a lot smoother and easier for you to leave as you have trained the purchaser over this time. Also your clients will most likely stay, as they are comfortable with the new purchaser.
3. Close down the firm.
This will result in not realising the market price of your firm, which you have spent so many years building.
4. Sell your firm on the open market with the aim of generating the highest price for your firm.
You can choose to either:
List for sale with a specialist law firm broker; or
Conduct your own selling program.
Please keep in mind the following if you are considering selling your own law firm:
There are hidden costs of your time, which may result in an impact on your firm’s revenue and therefore reduce the value of your firm to a purchaser.
You will be emotionally involved, which will most likely affect the potential success of a sale.
There are confidentiality issues both internally with current staff and externally with competitors and clients.
You will most likely have a couple of parties you know approach you and say “I will take it off your hands” (for next to nothing).
If you would like more information about selling your legal practice please contact John Castello on 0407 112 612 or firstname.lastname@example.org.