During a law practice deal, there are four deal roadblocks to avoid.
1. Financials –If you are a practice owner and don’t have financials that are in good form and up-to-date with the ability to generate reports for accounts receivables, employee costs, historical comparisons of profits and losses, then the time is now to get things in order. Get those items answered first before you acquire a practice.
2. Where the work comes from –A practice owner’s most significant deliverable to a potential buyer is to explain what works for marketing, where clients come from as a result of the firm’s marketing or brand awareness, and the mix of revenues from specific revenues clients or practice areas. If you haven’t been tracking this, it’s time to put some software to accomplish it.
3. Ethics and licensing –If you don’t understand how a law practice acquisition works under ethics rules or other business structures and proceed forward without that knowledge, several bad things can happen, including killing the deal. Licensing for new or out-of-state attorneys takes time, so make sure to reach out and connect with the right knowledgeable resources who can make those items become understood.
4. Transition plan –Sometimes the biggest hurdle in making a deal work, but it is imperative to get it done right. We work with clients to discuss their practices. By doing so, we make sure the buyer and seller can work through transition details that make sense, work for both parties, and preserve the value and lessen disruptions.