Like every person and business owner, you will one day exit your law practice. That day doesn’t have to be today, but whether voluntarily through transition and retirement or involuntarily through disability, death or other unplanned event the day will come. When it does, you will want to make sure you have planned to achieve certain professional and personal goals.
Believe it or not, most attorneys and law firms have done absolutely nothing to plan and set out a process for making sure succession can occur from one attorney or one firm to another. Here are some excuses attorneys use to justify the delay or failing to put a transition plan in place:
Excuse Number One: My law practice doesn’t have any value without me in it. Yes, this may very well be true, but typically there is little to no value in practices where the attorney has passed away or had a sudden event not allowing them to be in the practice. In the succession of a law practice it takes time and transition steps which help preserve and transfer the value of your firm to the next successor.
Excuse Number Two: I’ll just keep working and earn out my value. You can definitely continue to work in the practice for so long as desired, but life throws curve balls at you and if that day comes when you can’t, but your needs dictate otherwise then the problem arises. Instead, focus on transferring ownership under a succession plan or sale and if you want to keep working then do so for so long as desired. Having a transition plan does not mean you will stop practicing law. As well, exiting at a higher value instead of in wind-down phase will always yield the best financial results for you.
Excuse Number Three: I have tried that before. A number of attorneys we have spoke with have started, stopped, started again and then things fizzled. Or they have hired an associate with the thought of a successor and associate(s) have left. Openly, if you have tried it without success it is probably because the client demands, the legal work and life in general have taken precedent over the planning. Its okay. It is understandable. For most of our clients our true goal is to push through those time constraints and keep the process moving to get to implementation. Having an outside advisor for accountability and knowledge helps greatly in this area.
Excuse Number Four: I don’t want to stop being a lawyer. You don’t have to and no one wants you to, even your successor or buyer. All law firm ownership exits should be based on transitioning over time. Even when that is complete most successors would be delighted to keep you involved and associated with the firm, but you have gained the flexibility to do so when desired and without fear of the unknown. You shouldn’t be done and with the right transition and exit plan you never have to be.