One of the biggest barriers to selling a law practice is finding the right buyer. But even if you have found your ideal successor, the hard work isn’t over: you need to discuss the pricing and terms of the sale with law firm appraisals.

Most law firm owners are uncertain about where to begin. How do you know what your firm is worth? What number do you start with? How can you engage in an honest dialogue with the buyer without damaging the relationship?

If you start too high, you may scare your successor away. If you start too low, you run the risk of giving your law practice away and devaluing the hard work you’ve put in over the years.

So where should you start? Do what the most successful businesses in corporate America do: hire a credible professional who offers law firm appraisals.

Law Firm Appraisals Based on Expert Analyses

Roy Ginsburg, an accomplished attorney coach and consultant, will provide you with a law firm practice appraisal supported by expert analysis. He has appraised more than 200 law firms for every practice area imaginable.

With over 15 years of experience in strategic lawyer coaching and 40 years as a practicing attorney, Roy is uniquely qualified to support you in appraising your law practice. Roy’s extensive experience and insight into the marketplace will give you the confidence you need to navigate negotiations with your successor.

“I liked Roy’s approach to the valuation of my immigration law firm, as it took into consideration more than just numbers. The report was put into layperson’s terms so that everyone involved in the transaction could easily read it and understand it. I gave Roy a short turnaround time near a holiday, and I really appreciated his prioritizing (my matter) to meet that timeframe.”

– Small law firm owner, Mid-South

Can’t I Simply Multiply My Current Numbers to Reach a Good Purchase Price?

In the mature marketplaces for other professional services (e.g., dentists, CPAs), it’s possible to derive a somewhat accurate multiple by crunching numbers from data based on past sales of similar businesses.

However, the market for law practices is underdeveloped. In fact, law firm sales were unethical in most states until the 1990s. So, unlike for other professional practices, there is no meaningful database of transactions.

Most law firm deals are confidential, so without comprehensive data, using a multiple is pure speculation. Law firm appraisals are not about multiples or fancy valuation formulas. The reality is the marketplace for buying and selling law practices is too immature to trust any multiple or formula to provide a sound valuation.

Consider a family law practice, an immigration practice, and a personal injury practice. Using similar multiples for all three is nonsensical. While all three provide legal services, each firm attracts clients and makes money differently. The only commonality is that each firm is owned by a lawyer.

If you had a gas station, a restaurant, and a bank, all with gross revenue of $2 million a year and all owned by a lawyer, would you value them in the same way? Of course not—they’re completely different types of businesses. But that’s what people try to do with multiples and law firm valuations.

What About Working with a CPA Who Regularly Appraises Law Practices When an Attorney Gets Divorced?

A divorce scenario is very different from a sales scenario. Remember, the key to appraising a practice is predicting future revenue.

In a divorce situation, the same person will continue operating the practice. An appraiser can usually reasonably assume that revenues pre-divorce will be similar to revenues post-divorce.

Clients seek out attorneys for their skill and reputation, not their marital status. So when valuing a law firm for purposes of a divorce, appraisal formulas make sense.

The same cannot be said in the sales situation. For many practice areas, it is not so easy to predict how much revenue a successor will be able to bring in. Many CPAs are simply clueless about the nuances of various legal practice areas. CPAs excel in numerical accuracy, but they usually lack the insight to understand how having a different attorney at the helm can dramatically affect the value of a law firm.

A better option is an appraisal by a professional who can understand the unique characteristics of your practice and your clients—someone like Roy Ginsburg.

“Roy is clearly well-versed and experienced in appraising and the buying and selling of law practices. His assistance was invaluable when deciding how to exit my niche real estate practice.”

– Small law firm owner, Coastal AL

Contact Roy Ginsburg for Expert Law Firm Appraisals

Roy’s law practice appraisals are designed to be easily understood and contain no bean-counter mumbo jumbo. He uses a step-by-step analysis and explains each step along the way. The result is a logical and straightforward report on which you can confidently rely in negotiating the sale of your law practice.

Join the more than two hundred lawyers nationwide in 30+ practice areas who have worked with Roy. To gain the confidence in negotiations that comes from understanding the worth of your practice, call (612) 524-5837 today or connect online.