TLDR: Just skip the nonsense and give me a link to the law practice valuation calculator.
A few years ago I was trying to figure out what to do with my legal career. I met with a friend and mentor for whose firm I'd worked during law school. Perhaps sensing my trepidation about the future this close-to-retirement lawyer said "I'll give you my practice."
This wasn't a lifestyle practice: The attorney had bought a building, he had at least one associate, and a couple of assistants and paralegals. I ultimately didn't take him up on the generous offer but it's struck me since how casual he was with this very valuable asset.
Despite a relatively robust market for dental and medical practices, the market for buying and selling law practices remains very nascent and I doubt that my mentor was alone in either simply closing his practice or "giving it away."
We at Financially Legal don't like to see lawyers leaving money on the table, so this week on the Financially Legal podcast we talked with Tom Lenfestey founder of the Law Practice Exchange.Tom is an expert on law firm brokerage and has helped dozens of lawyers buy and sell practices.
As you'll hear on the podcast, there can be a great deal of untapped value in a law practice - the key is understanding where that value is, counting it, and then selling that value to a prospective buyer.
In order to help lawyers and law firms take the first step to understanding that value, we've collaborated with the Law Practice Exchange to create a law practice valuation calculator. This tool takes obvious things like revenue and net profit into account but it also tries to get a more intangible value like that of staff, an attorney's reputation, their client base, and more.
It may be the case that some practices don't have much value beyond the goodwill that one retiring attorney might transfer to another. But even if a lawyer could realize a few thousand dollars for the transfer of a practice, wouldn't it be worth exploring a sale instead of just closing up shop? We think so. And we hope our calculator helps you realize that too.