Many lawyers eventually start asking themselves how to sell a law firm after years of building their practice. Whether you’re planning for retirement or simply looking for a new chapter in your career, preparing your firm for sale requires careful planning.
A successful transition doesn’t happen overnight. Before putting your firm on the market, it’s important to evaluate four key areas of readiness:
- Personal readiness
- Emotional readiness
- Financial readiness
- Firm readiness
In this article, we’ll explore the first two critical factors that lawyers should consider when learning how to sell a law firm and preparing for a successful transition.
Personal Readiness
Our first key aspect is always the hardest because it’s personal, and most people avoid this. They are scared to really look at themselves. When we dive into this aspect we get to explore why the person believes they are ready to sell. Most people feel like they want to get out, but in reality, they are just burned out. They are exhausted, haven’t taken a vacation in three years, and feel like they can’t do this work anymore. But what if they could have a vacation? Would they feel more rested, more productive, and maybe more profitable? Afterward, they might go back to enjoying what they are doing and might not actually want to sell their law firm.
So, we have to truly look at the reason we want to sell. Sometimes, we are just not making the money that we thought we should be. As lawyers, we have this perception that lawyers make lots of money. Then, when you are a lawyer running your own business and not meeting that perception, you can feel like you’re an imposter. None of that is necessarily true. What it may mean is that you just need a good coach so that you know the right way to be profitable. If you did that, you might still enjoy having your firm and doing your thing. Right? That’s why knowing how we really feel inside is important: so we avoid regrets later on because 75% of people who sell their law firms have regrets.
Emotional Readiness
This is the most critical part of the sales process. Being emotionally ready to part with your business requires you to do some digging into what your next steps will be as a professional and as a person. Business owners spend countless hours building up their businesses it becomes a part of their identity. Knowing that you have decided to part ways with it, who will you be? What will you be doing?
You can only spend so much time on the beach, so think about how you will be investing your time to avoid having regrets about selling your business. For me, when I sit on the beach, I know what I’m going to be doing. I’m going to be writing novels because my next phase of life is being an author; a published one. I have no shortage of ideas.
When I sold my law firm, I not only bought a farm and grew hemp for CBD products to further my ongoing mission of helping people live the highest quality of life in their elderly years (as I did as an elder care attorney,) but I’m doing that now through my farm and CBD products. I’m continuing to help lawyers live their best quality of life post-law firm. I have no shortage of things to do. Others aren’t as lucky as I am. They are unsure of what their next phase of life entails, and so we’ve got to get past that. We’ve got to create a plan for what comes next, so life after law is actually something that excites you!
Learn More About How to Sell a Law Firm
Selling a law firm is a major professional decision, and preparation is key to achieving the best outcome. By evaluating your personal, emotional, financial, and firm readiness, you can ensure a smoother transition and maximize the value of the practice you’ve built.
If you want to hear more and learn the other two key aspects of selling a law firm, listen to our podcast episode
“What are the first steps to selling a law firm?”
Here or stream it on your favorite platform. You can find us as “Smart Lawyers Position to Transition”:
Victoria Collier is a nationally recognized expert in law firm valuation, succession planning, and practice sales. After founding and successfully running her own estate planning and elder law firm since 2003, Victoria sold her practice in 2020, giving her firsthand experience in the complexities of law firm transitions.