Pssst! Wanna Buy a Law Practice?
Alexandria, Va., lawyer Kenneth Labowitz is counting on money from sale of his practice as part of his retirement nest egg—he just doesn’t know how to sell it. Take heart, says law firm management consultant Edward Poll, author of Selling Your Law Practice: The Profitable Exit Strategy. There are plenty of ways to maximize its value and sell it.
Here’s his advice:
• Keep a time frame for your retirement and sale in mind because law practices should be sold at or near their peak. “Never have in your mind that you are going to sell your practice on a certain date and therefore can begin to slow down two years before—no one wants to buy a declining practice,” Poll says.
• There is no science to valuing a law practice; it’s an art. Several different formulas exist to valuate a law practice and are used depending on the circumstances.
• Don’t go it alone. A law practice is an entirely different creature to sell than a car or a house. “You need an objective third party, and you don’t want to inject emotion into it,” Poll says.
• Law practices have value, and lots of lawyers want to buy practices. “People who walk from their practices suffer from the perception that their practice is not a business,” Poll says.
• Timing is everything. “Make the decision to sell when you are capable of making the decision,” Poll says. “You don’t want to wait till you get sick. Make the decision while you can and then build up the structure to implement those decisions.”