Valuing Your Law Firm for Sale

You have two options when it comes to selling your law firm. You can have an associate buy you out or transition your practice to a third party. Either way, you must answer the question:

“How much is my law firm worth?”

The honest answer isn’t very helpful: “Whatever someone is willing to pay for it.” The problem is, most lawyers can do little more than guess what that might be. But knowing what to ask for your law practice is critically important. Ask for too much, and potential buyers might balk. Ask for too little, and you walk away leaving money on the table.

The Importance (and Difficulty) of Valuing Your Law Firm

Why is it so hard to figure out what your law firm is worth? There are a lot of reasons:

  • The methods that are effective for valuing other types of businesses are often wildly inaccurate in estimating the value of a law firm.
  • Law practices, like the attorneys who run them, are unique. You’ve literally put yourself into your practice. Part of its value is what you bring to the table. That changes when someone else steps into your shoes.
  • Comparing the value of two different law practices is often like comparing apples and oranges. Often the only common thread is that they are businesses run by attorneys.
  • There’s relatively little data on law firm sales. Those attorneys who do sell their practices tend not to talk publicly about the price. And most lawyers who sell a practice have never done so before, so they can’t rely on their own experience.
  • You have a personal, as well as a financial, investment in your practice. You may have a hard time being objective about the financial value of your practice because of what it means to you personally.

In short, it can be very difficult to know the value of your law firm without either a crystal ball or experienced guidance. And while crystal balls are in short supply, the guidance you need is available.

Have questions about valuing your law firm? Read our Valuing a Law Firm FAQs for answers.

Experienced Law Firm Appraisals by Roy Ginsburg

Law firms are different from any other business. Although a CPA or professional appraiser may be able to value other professional practices such as accounting, dental, or medical offices, law firm appraisals require an understanding the marketplace and knowledge of different legal practice areas.

Roy Ginsburg has been a practicing attorney for over 35 years and a lawyer coach and consultant for over 15 years. He has helped over 100 lawyers exit their practices with confidence, including dozens of appraisals and sales. He can help you do the same, starting with the critical step of valuing your practice.

I hired Roy to value my firm because of his experience in this area and his background as an attorney. His appraisal was logical and his analysis was succinct. The fact that Roy’s report provided a range of values, rather than precise number, created an intellectually honest and credible work product. Overall, Roy’s appraisal was very helpful to put my exit strategy deal together.

Small law firm owner, Phoenix, AZ

Roy will take the time to evaluate your unique practice, then provide a comprehensive report about the value of your firm that you and potential buyers can read and understand.

You may not know the exact worth of your practice, but you know it’s too valuable to leave to chance. Contact Roy Ginsburg at 612-524-5837 or connect online.