Thinking of Selling Your Law Practice?
August J. Aquila, Aquila Global Advisors
Here are 12 things you should be doing to get yourself and your practice ready.
1. Know yourself
Perhaps the most important thing you can do is really know what you want to accomplish and how a sale of your practice will achieve it. You need to know you own capabilities, strengths and weaknesses, and your firm’s potential. If you have internal problems, don’t expect a buyer to solve them. If they do, you may not like the way it is done
2. Clean up your profit record
You will want to be able to show to the buyer that you know how to profitably run a practice. The higher the profit, the more you will be able to get for the firm. Look at billing rates, utilization and overall gross margins of your work.
3. Understand your culture
Culture is the way you do things in the firm and what is acceptable behavior. Buyers have their own culture. The more they differ from yours, the more changes will take place after the merger.
4. Buyers don’t want dead wood
It’s best to clean house earlier than later. If you have some unproductive partners or staff, talk to them now.
5. Specialty firms are worth more
If you have a niche or a potential niche, make it stronger.
6. Build your story
Why should another firm want to acquire your practice? What makes you an attractive candidate? You need to be able to articulate your reason why they should want your firm.
7. Have a good succession plan
Buyers are always looking to acquire strong firms. Having a good succession plan shows buyers that your firm has a strong future and good leadership.
8. Spruce up your facilities
You want to make a positive impression in all aspects of your practice, especially its physical condition.
9. Know your deal breakers
It’s important to know what is important to give up or not to give up in the merger process. You don’t want to get to the end of a lengthy process only to find out that a particular buyer is not right for you.
10. Take time to build a relationship
Don’t rush into a sale. You will want to get to the know the buyer and partners. Having several meetings with a potential gives you an opportunity to see how they behave.
11. Conduct your own due diligence on the buyer
You want to make sure that the buy has the financial wherewithal and experience in acquiring firms. If you are their first acquisition, the process may be rougher than you expect. Everyone learns by doing.
12. Use an M&A consultant
There are many reasons to use a qualified M&A consultant. He or she can source potential buyers, keep the process on track, assist in the negotiations and help with emotional issues that are sure to arise.
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About the Author
Aquila J. Aquila
Aquila Global Advisors
A long-time member of the MPF Faculty, August works with both accounting and law firms on a variety of issues, including mergers and acquisitions, succession planning, and compensation systems. He can be reached at 952.930.1295 or AAquila@AquilaAdvisors.com.