Small-firm owners and solo practitioners looking to sell their law firms frequently believe that their particular office space—whether owned or leased—significantly enhances the value of their practice. They usually base this belief on the office’s superior location or their upscale furnishings and design.
Is this belief founded in reality? Sometimes. But , often, a seller’s office space can actually hinder a sale.
There are occasions where superior office space can either increase the value of a practice or, at a minimum, make a practice more attractive and easier to sell. This is especially the case for potential buyers who have inadequate space to take on the seller’s practice or, coincidentally, have their own lease nearing expiration.
But these situations are few and far between.
Often, possible buyers have absolutely no interest in moving. While there are myriad reasons why, here are two common ones:
Bottom line: Don’t assume anything about the impact an office will have in a sale scenario. Depending upon the buyer, it can cut either way.
If your lease is soon expiring and you think it is possible that you may want to retire within the next few years, here are some final words of advice:
Do not sign a lease for a term that extends beyond the amount of time you want to practice.
If you do, you may have to reject an appealing buyer who doesn’t need your space. Or, just as bad, you may be forced to eat the remainder of a lease when doing a deal with an appealing buyer. Either way, your exit strategy will be less favorable than what would otherwise be possible.