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The most common reason why practices close is retirement. Although many lawyers would probably prefer to simply ride off into the sunset when they’ve decided to call it a career, the rules of professional conduct dictate otherwise. The duty of competent representation requires an obligation to protect client interests, which in turn, requires planning and time. Failure to properly plan one’s exit from the profession could harm the interests of clients, as well as cause financial and emotional stress to former partners and family members left to clean up the mess. Here are some of the best practices when closing a law firm. 
What are the mechanics of buying and selling a law firm? First, let’s go back to law school for a moment. For those of you who have never done transactional work during your career, law firm buyers purchase the firm’s equity or assets. In the former situation, the entity remains in place. In asset deals, buyers acquire assets that are then placed in the buyer’s existing entity.
The number of attorneys practicing after reaching the age of 65 has grown by more than 50% in the past decade. Roughly 15% of all practicing lawyers are 65 or older. As a group, we also seem to work longer than others. Only 7% of the general workforce stays employed beyond 65.
I’ve written before about how buying a law firm can be a very effective, low-risk, and low-cost means to grow a practice. That said, what is it about the legal profession that, on occasion, makes it more challenging to sell a practice than hoped? As a consultant and coach, I’ve worked with hundreds of lawyers of all shapes and sizes in virtually every state and practice area. From that experience, I’ve become somewhat of an expert in understanding the DNA of those in our profession. Here are three fundamental truths in the DNA that impact buyer behavior. I call them the “do-nots.” 
With so many lawyers contemplating retirement, your law firm succession plan has never been more important. Take a careful look at your law firm’s most influential leaders and biggest rainmakers. Chances are good that these individuals will be retiring over the next decade. Is your law firm prepared for this seismic generational transition? The impact will be felt well beyond the law firm itself. 
For years, selling a law practice was prohibited because ethics regulators believed clients, files, and a firm’s goodwill were not something that could be sold. Regulators feared that clients would be treated like merchandise. Other ethics worries included the possibility of sharing fees with a non-lawyer (spouse of a deceased lawyer) and the ban on payments to anyone for recommending the lawyer’s services. 
If you’re a solo or small firm owner thinking of selling your law firm, for certain practice areas, transitioning repeat clients to the buyer is key. Indeed, the primary reason your firm has value and has a willing buyer are those client relationships that took years to build. Transitioning clients successfully requires managing and finessing human relationships, a task that—even with the best of intentions—is never easy. Everyone has the same goals, including quality, predictability, and trust. Will your successor meet your existing clients’ goals? 
I always tell clients that my appraisal provides an excellent starting point for negotiating the price of a law firm with an insider, but that it is unlikely that it will be the final word. While it may sound like a cliché, for most small firm insider deals, parties ultimately agree on a price that seems “fair.” 
Law firm succession planning is certainly getting its share of attention these days. It makes sense, too, considering one-third of the attorney population will be made up of boomer lawyers (those 65 years of age or older) within the next 10 years. 
With Baby Boomers retiring left and right, law firm leaders everywhere are talking about succession planning. Yet, much like the weather, no one seems to be doing much about it. Legal consultants Altman Weil report that only 31% of its surveyed law firms had formal policies in place. ALM Legal Intelligence puts the number at 33%. 
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