A smart buyer will look to finance the purchase using the firm’s future revenue through an earnout. In an earn-out, the seller is paid based on a percentage of future revenue over an agreed-upon period, rather than receiving the full price upfront. This reduces risk for the buyer since payments are only made if clients actually stay and revenue materializes. How much of the price should be tied to an earn-out varies by deal, but it is one of the most important negotiating points in any law firm sale.

Many lawyers already pay referral fees, and when viewed through that lens, structuring a deal this way becomes much more realistic.