4 Things for Buying Law Practice
Perhaps you’re an attorney who wants to go out on your own after working for a big firm for years. Or you’re an associate who can’t get on the partnership track. Maybe you’re a law school graduate who has trouble finding a job or wants complete control of their success. Instead of starting from the ground up, a faster solution is buying an existing law practice. Here are 4 things you should consider before you buy a law practice.
Timing matters in a number of ways. First, could your team handle an influx of new work from the firm you’re buying? Yes, buying out an existing firm could raise your revenue, but would you be able to coordinate or add staff fast enough to handle the load? Another issue relates to personal timing. Are you ready to take on the risk and responsibility that comes from owning your own firm instead of working for someone else? Are there aspects of your personal life that would preclude dramatically increasing your workload as you try to take over an existing firm or merge it with your current one?
The law firm needs to be a good fit with you, and if relevant, your team. A personal injury attorney probably isn’t going to fit in as the manager of a criminal law firm, though a law firm that takes a variety of cases could be a fit. Another factor to consider is the culture. Are there tenured employees who wouldn’t accept you? Is their corporate culture compatible with yours? Are they getting repeat customers or aggressively marketing, or are they riding along on inertia?
It isn’t uncommon for an insider to buy an existing firm. You may come across an opportunity when someone says they want to sell the firm and move or retire. However, you can also shop for law firms just as you can search other businesses that have put themselves up for sale.
If you want to buy a law practice, resources like Lawbiz can help you find practices up for sale the same way you can visit other sites that link business owners looking to sell with investors. Their registry of law practices provides a simple starting place for finding law firms you may want to buy.
The Transition Plan
Even if you find a law firm for sale that is a good fit with your current legal niche and corporate culture, the transition plan can kill the deal. Any transition needs to be thoroughly documented, from the deal memoranda to the purchase agreement.
What type of transition goals should the exiting attorney focus on for the next 2 weeks? Or 2 years? You and the selling attorney will have to agree on transition goals, the time required for the transition and a set of benchmarks to determine success during each step of the transition.
Buying a law firm may be best solution for someone who wants to move up the career ladder. However, there are a number of factors you need to consider both personally and with relation to each potential purchase to avoid making a mistake.
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