Today’s senior attorneys are realizing they have more options for transitioning their law firm when they are ready to retire. In the past, many attorneys assumed they had two options. They could either find an associate willing to assume the practice or shut the doors and turn off the lights. Fortunately, the marketplace for buying and selling law firms continues to grow. And retiring attorneys are discovering new options for capitalizing on the value they have built with their law firm businesses.
The Legal Marketplace Is Rapidly Growing
In the 2022 Law Firm Buying & Selling Legal Trends Report, law firm broker, Tom Lenfestey, recalled a brief market pause in early 2020. Since then, the marketplace for buying and selling a law firm has recovered, and sales continue to increase year over year.
Lawyers ready to exit will find solace that there are more buyers in today’s market than ever before. More buyers means more opportunities to sell the firm and realize a tangible return on their investment of building a practice.
More Lawyers Are Looking to Grow Through Acquisitions
Attorney Erik Pelton runs an intellectual property law firm outside Washington, DC. He sees huge potential to expand his practice by acquiring practices of senior attorneys ready to retire or transition from full-time practice.
“I’ve been talking with lots of senior lawyers who are ready to scale back and enjoy the fruits of their labors,” said Pelton. “I can offer them a road to retirement and ensure that all of their clients continue to receive exceptional legal services. It’s really a win-win-win for everyone.”
Lenfestey agrees. He has seen more lawyers looking to grow their existing business through acquisitions of smaller practices from retiring attorneys. “We are seeing firms of all sizes looking to acquire firms and client rosters from retiring attorneys,” said Lenfestey. “Now is a great time for retiring attorneys to see what the market will bear.”
Sellers Structure Transitions to Suit Their Needs
Many times, attorneys considering retirement struggle with the idea of not working anymore. Fortunately, it is typically in everyone’s interest for the selling attorney to stay on after the closing to ensure a smooth transition.
“Buyers want to make sure there is an effective hand off after the sale. It is not uncommon for a retiring attorney to stay on for some period of time. They slowly ramp down their work as part of the process,” said Lenfestey.
Bottom line is there is no reason for a retiring attorney to close the doors and walk away in today’s market. Instead, retiring attorneys should explore how they might sell and transition their business to the next generation eager to jump in. For more information on the selling process, interested parties can connect with law firm broker, Tom Lenfestey, at [email protected] or by visiting The Law Practice Exchange.
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