Retirement should be the reward for years of hard work, not the end of your financial growth. If you’re a law firm owner considering retirement, selling your practice could be the smartest move you make for your future. Instead of winding down operations and walking away, why not cash out for maximum value? If you’re thinking about retirement, a sale of your firm should be a strong consideration before you close up shop.
Your Law Firm is an Asset
Some attorneys may assume their firm’s value disappears when they retire, but that’s a costly misconception. A well-established law firm with a solid client base and a strong reputation is a marketable asset.
Buyers, including other firms or solo practitioners, are actively looking for profitable practices to acquire, and you may be able to sell your law firm for top dollar.
Thinking About Retirement – Ways to Prepare
Of course, you can’t retire and sell your law firm without a plan. There are steps you need to take before officially retiring and selling your practice, and your clients deserve to know what’s going on along the way.
Ultimately, both your clients and any potential buyers want transparency. A good rule of thumb is to always ensure financial records are accurate, revenue streams are documented, and expenses are justified – not just in the final hour before a sale.
A messy balance sheet can scare off potential buyers or lower your valuation – and cause clients to jump ship to another firm when you sell. (Indeed, if a client isn’t happy with the sale or who you’ve sold your firm to, they have the right to consider what counsel they’d prefer instead and leave, which may upset your firm’s buyer.)
You should also make sure your operations are fairly streamlined before you consider a sale. A firm that runs smoothly without heavy owner involvement is worth a lot to potential buyers. Document your processes, delegate key tasks, and reduce reliance on your personal presence, and you should be in good shape to consider retirement and selling your law firm.
Shutting your doors without selling your firm means walking away from years of built-up goodwill, client relationships, and potential earnings. Selling lets you monetize your life’s work while ensuring clients are still well-served long after you’ve exited the legal industry.
Next Steps for Considering Retirement and Selling Your Firm
If retirement is on the horizon, start planning your exit now. You should consider consulting a business broker specializing in law firms to assess the value and marketability of your firm. Or, you can give our firm a call to see what advice we may have. With over 30 years in business, the team at Phillips Law Group may have some valuable insights to share with you.
With the right strategy, you can secure a lucrative sale of your law firm and retire on your terms. Your legacy and your practice don’t have to end when you retire. Sell smart, and enjoy the retirement you’ve earned.
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