How To Sell A Law Firm

As we have explored in prior columns, when thinking about how to exit, lawyers nearing retirement should add the possibility of selling their practice to their list of exit options.

The New York ethical rules explicitly permit the sale of a law practice.  New York Rule of Professional Conduct 1.17(a) provides: “A lawyer retiring from a private practice of law . . . may sell a law practice, including goodwill, to one or more lawyers or law firms, who may purchase the practice . .  .”

While permissible, the sale of a law practice still seems to be an underutilized path.  Part of the reason that may be the case is there is not yet a robust marketplace for the sale of law firms. 

If you wanted to sell your house, you could follow a decades old sale process - - engage a licensed real estate agent, have the house listed on a public service, like the multiple listing services, show the house to buyers, field a myriad of offers, and accept the highest and best terms.

An entrepreneur who wanted to sell their business, could also engage a business broker, post the listing on well known business exchanges, deal with multiple offers and negotiate the sale.

Selling a law firm does not yet follow that path. 

If firms are sold, at all, many of the sales, particularly outside of an urban setting, seem to be by word of mouth from one local practitioner to another.

Some sellers do try to broaden the pool of possible buyers by utilizing ‘headhunters’ to find receptive law firms.  Although near retirement attorneys may not be a standard candidate for a recruiter, there are some who will assist in career transitions.  For instance, https://gillmanstrategicgroup.com/ does work with departing lawyers.  

And while there is no equivalent of the real estate multiple listing service for firms, there are some law firm ‘brokers’ who are trying to develop a public marketplace.  Examples can be found at thelawpracticeexchange.com/marketplace, https://www.royginsburg.com/category/blog/selling-your-practice/ or www.seniorattorneymatch.com.

While there may not yet be a robust marketplace for law firm sales, there are still plenty of ways to sell your law firm.  If you are near retirement, you should add the possibility of selling your law firm to your list of choices.