The key question is whether a potential client would work with a successor after your law firm sells, since it is the referral network or the goodwill that is the crucial asset being sold. If the potential client calls and wants you and only you, the goodwill is too personal, and the practice may have minimal value. However, if a client wants someone from the law firm, that is known as practice goodwill and has value.

How does one distinguish among the different types of goodwill? The answer is more straightforward than one might think. Have the firm’s new clients insisted on retaining the owner, or have they been willing to work with other attorneys at the firm? The former law firm has minimal value, whereas the latter may have substantial value.