Why Don't the Usual Appraisal Methods Used by CPAs Work for Law Firms?

Primarily because law firm revenues are relatively unpredictable. Other professional service businesses that are frequently bought and sold, like accounting practices and medical or dental practices, have fairly predictable books of business.

The transferability of an attorney’s book of business is much harder to predict, largely because many legal services are one-time or, at best, sporadic. In addition, certain ongoing client relationships may not be as easy to transfer to a new attorney as the seller and buyer hope.

What’s My Law Practice Worth?

How's this for an answer? “Whatever someone is willing to pay.” If you need a more precise answer, consider this: the literature, written primarily by CPAs, describes a wide range of valuation methods. Many are difficult to comprehend unless you have a strong finance background. Even then, the formulas typically have little or no bearing on what is actually paid for a law practice.

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