How to sell a law firm: Think like a buyer
Where to start when selling your law firm
There are a number of reasons why you might be looking to sell your law firm, whether you are experiencing financial difficulties or are thinking of retiring and maximising your return. However, no matter what your reason is for selling your practice, you will still need to follow the same steps to prepare your firm, find a buyer and complete the sale.
So, where should you start when selling your law firm?
1. Set a deadline
The first step to take when selling your firm is setting a deadline. Whilst this might be dictated by your situation, having a deadline will allow you to plan your time. This is particularly important if you are looking for a quick turnaround and will ensure you use your time efficiently.
2. Review your firm
Once you have a deadline in mind, you will need to start preparing your firm for sale. Much like selling a car, you will need to get your firm looking its best and running at its smoothest. From organising files to updating software, you will need to review your operations to identify faults and perform repairs. Remember to think like a buyer during this process, to ensure your firm is fit for sale.
Start by taking a close look at your current client base. Do you have evidence of repeat business from long-term client relationships? If not, it could give the impression that your firm has a poor track record.
Assess the state of your workforce. Do you have a team of motivated and incentivised professionals who are committed to your law brand? If you have a high turn-over rate, it could cause your firm to look unstable and unsuitable for purchase.
Review your systems, both digital and physical. Do you have up-to-date software and a controlled filing system? If you still rely on paper documents and storage cabinets, it could impact a buyer’s confidence if your systems are disorganised.
Evaluate the finances of your firm, including how you manage client money. Do you have a clear credit control policy with payment terms? If you don’t have an established invoicing system or accountancy team, it could cause a buyer to question your firm’s financial stability.
Finally, double check your professional indemnity insurance policy. Do you have a new policy or are you approaching your renewal period? If your insurance is about to come to an end, it could cause a buyer to hold off on the sale, as the market remains extremely challenging to navigate.
3. Decide how to sell
Once you have performed a full service on your law firm, you will need to start thinking about how you want to sell. Whether you decide to find a buyer or approach a broker, you should be confident you are getting a fair valuation of your firm, especially now it’s in prime condition. By opening up your firm to offers, you can review your options and negotiate your terms, to ensure you sell in the way that suits you.
Whether you are preparing your firm or receiving offers, it can be useful to speak to a legal expert, who has experience in law firm sales. The Bamboo Platform is here to help get your firm ready for sale, from arranging PI insurance to managing finances to updating IT software. Once your firm is good to go, we will even present you with a fair valuation for your firm.
So, if you want to sell your law firm but don’t know where to start, get in touch with the Bamboo Platform.