If you’re the owner of a legal firm reading this post, you know that you must have put in a lot of effort into making your law firm worthy. Now that you’ve earned a place in the industry, you must be proud of yourself. However, when you think of selling off your law firm, it doesn’t matter how worthy you think your law firm to be. You have to analyze how potential buyers will value your firm. Their idea of the worth of your company is what you’ll receive.
Now that you sit to evaluate the worth of your legal firm, you may find it tough to severe your emotions from the entire process. But there are several factors that you can use to understand the actual worth of your firm.
Evaluating The Worth Of Your Law Firm – A Few Concrete Factors
Regardless of whether you have a personal injury legal blog or you just operate offline, there are some factors that you have to keep in mind while placing the value on your law firm. The accurate dollar figures constitute one of the most vital factors as they help in determining the liabilities and assets that are owned by the law firm. The dollars also determine the amount the law firm pays in overhead expenses like payroll, property taxes, and more.
By using all these numbers, you can easily conclude the worth of your law firm as they are numbers and stats that the future buyers wish to see. Here is a list of the documents that you may need to analyze the value of the aforementioned factors:
- Tax returns
- Financial statements
- Insurance policies
- Lease agreements
- Banking records
- Debt agreements
- Titles to assets
Are There Any Other Determinants Of Assessing Your Legal Firm
When you sell your law firm, the potential buyers will not just check the financial documents and the worth of your law firm but also few other things. Here are some such things to consider:
- Quality of Staff: In most cases of selling a law firm, the staff remains the same with the buyer, especially when the seller is retired and is moving out of the law industry. If you have adequate staff who are competent, educated, helpful, and amicable, this automatically boosts the worth of your firm.
- List of clients: Though there’s no assurance that the old clients will remain with you even after the new buyer takes over, yet there’s a high chance that they will. A client list will also inform the buyer that they’re buying a well-reputed law firm which will increase its value.
- Perfect logic for sale: There are some reasons for a sale like relocation or retirement of the seller that won’t affect the reputation of the firm. Nevertheless, in case the buyers feel like that the seller just needs to wind off the business, that too on an urgent basis, this might make them wonder about the hidden reason. This could also hurt the final sales price.
Locating A Buyer
Determining the worth of your law firm is just one side of the selling battle. Unless you find a buyer to purchase the law firm, the process is not complete.
Thankfully, there are several ways of locating a perfect buyer. Most attorneys believe in word-of-mouth marketing and since the legal community is not huge, informing a few people can spread the word.
In case you don’t receive the expected interest by word-of-mouth marketing, you may even give an announcement in state and local bar newsletters. Lawyers usually read these papers daily.
So, if you’re looking forward to selling your law firm and you need expert assistance, get the help of professional brokers. They can assist you with each and every aspect of a sale and make the process smooth.