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The end game: Five things to do if you want to sell or merge your legal practice

The end game: Five things to do if you want to sell or merge your legal practice

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Looking to sell or merge your legal practice? Many of my clients have achieved great satisfaction in building profitable practices from humble beginnings, often dealing with challenging circumstances along the way.

A successful sale or merger can be the ultimate reward for hard work and substantial investment – but only with good preparation.

1. Have your elevator speech prepared

While you must keep your plans low key, there will still be people you need to tell. Can you convince your partners and financiers that a sale or merger is the right thing to do? You need to have compelling answers at the ready because you are about to invest significant time, money and effort in this process.

2. Think outside the square

When considering who you are going to market your practice to, don’t go too narrow. It may be that your merger partner or acquirer wants an established office in a strategic location that they don’t currently service, or you may be able to offer a desirable client panel appointment that they don’t have.

Don’t rule out buyers or merger partners who offer different services to your practice. Revenue might not be the only attraction of your practice. Your key client relationships, intellectual property and employees may also add value in the eyes of prospective buyers or merger partners. Do your research and think laterally.

3. Freshen things up

There are many small things you can do to make your practice more attractive. Tidy up your practice premises for potential buyers or merger partners to walk through. Make sure your financials are also in order. Pull back on any unnecessary expenditure.

4. Keep it under wraps

Confidentiality is crucial both in your dealings with interested parties, but also within your practice. Have a response prepared to use if you get unexpected questions about a proposed sale or merger.

Within your practice, minimise the number of people who know about the deal, a good rule of thumb for personnel in your organisation is to operate on a strict ‘need to know’ basis.

5. Seal the deal

Don’t rely on a handshake, memorandum of understanding or heads of agreement. If things go wrong, failure to have a legally enforceable contract can be disastrous.

 

Rohan Harris is a professional services and business lawyer and principal at Russell Kennedy Lawyers. Rohan has written a guide to getting your legal practice ready for sale or merger.

 

Want to find out more? Register for the LIV's Small Practice Masterclass on 28 March where Rohan Harris will be speaking on the ins and outs of succession planning. This masterclass will also cover risk management and business strategies for small firms, provide tips on how to grow your client base and more. For more information, see here.


 


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