Soon-to-be retired solo practitioners and small law firm owners who are thinking of selling their law firms frequently ask, “Is there anything special or unique that I should do now to maximize my practice’s value?” Whenever I hear that question, I can’t help but think of President Obama’s remark about how to best manage world affairs: “Don’t do stupid s**t.” That advice holds true for lawyers contemplating selling their practice.
So what passes as “stupid s**t” when you are considering selling your practice? While one could stipulate over a laundry list of items, I’m going to keep this very simple. Here are the two stupid things to avoid.
1. Don’t Sign a Long-Term Lease After Turning 65
There is nothing magical about 65. The point here is once you reach your mid-sixties, all bets are off about the likelihood of your or your spouse’s continued excellent health. The odds that one of you will have a serious medical issue increases substantially at this time. As a result, significant changes to your practice may be required.
Health issues will give you enough to worry about. Why add the stress of a big lease obligation?
In addition to health, there is another reason to stay away from longer leases. When you least expect it, you may uncover an opportunity to sell your practice sooner than you anticipated. A long lease could prove to be a major obstacle to a deal. You should never assume a buyer would want to take over your lease obligations. Some will, some won’t; it will all depend on the situation at hand. Don’t make your life more difficult than it has to be.
2.Don’t Forget to Have a Contingency Plan
It is more critical than ever to have a complete, thorough and updated contingency plan in case your health begins to fails. (Note to younger lawyers reading this: You should have one too!) Don’t have one yet and aren’t sure where to start? Look to the myriad resources available from your bar association, malpractice carrier, and the Internet.
Is That Really All?
Yes! I am well aware that other consultants frequently advise solos and small firm owners to enhance marketing efforts, systematize operations, clean up financial records, and go paperless, among other things. But let’s get real. You know you should have been doing all of that stuff years ago. Do you really think you’re going to do it now? I doubt it.
Save yourself the trouble of thinking about reinventing how you operate your firm. You made a nice living doing it your way. Smart buyers will still see plenty of value and will come ready to make a deal. Just be sure not to get in your own way by doing stupid s**t.
