By Guest Blogger, Melanie Fischer
Has the idea of retirement crossed your mind recently? As the owner of a solo law firm, you may be contemplating retirement, but are reluctant to move forward because the prospect of selling or shutting down your firm seems overly complex, stressful, and challenging. You want to retire, but you feel like you can’t.
If the thought of retirement seems overwhelming, you’re not alone. Many solo attorneys know they want to retire, but are unsure how. Therefore, they end up working beyond the age they originally wanted to retire.
The question, “Is retiring as a solo attorney supposed to be complicated?” is difficult to answer. In theory, it should not be difficult to retire. However, as a solo attorney, there are likely several factors at play that make the idea of retirement exceedingly complex. If this sounds like your situation, rest assured that retirement is not only possible, but it can be accomplished successfully when handled with adequate planning and proper guidance.
How Much is Your Solo Law Firm Worth?
If you are thinking about selling your law firm, it’s essential that you have a good idea how much it’s worth. The monetary value of any business involves assessing a combination of assets, average yearly revenue, average yearly profits, and several other factors. Additionally, the value of your law firm can be affected by local competition, geographic location, and the type of law you practice.
Do You Have a Buyer?
If you want to sell your law firm, should you simply place a For Sale sign in the window? Maybe. But many believe that the best way to sell a law firm is to seek out a potential buyer instead of letting a buyer approach you. As a successful owner of a law firm, you want to sell your practice to someone who will uphold your firm’s excellent reputation. Many retiring solo attorneys start the process by discretely talking with competing law firms, approaching solo attorneys who practice the same area of law, or placing a confidential advertisement that describes the firm and your asking price – but without providing too many details. Sometimes it’s best to keep the particulars private until a serious buyer has been located.
What is Your Exit Strategy?
Making the decision to retire involves formulating an effective exit strategy. If you want to sell your law firm, you want to make sure your existing clients are taken care of. This may require you to stay with the firm for a period of time after it’s sold. The bottom line is that you want the sale of your firm to be a seamless transaction. However, if it’s your goal to retire without selling your firm, you may be able to accomplish this by simply not taking any new clients. While your existing clients may continue to utilize your services until their legal matters have been resolved, your workload will get progressively smaller, and eventually you will be in a position to officially retire.
Help is Available
If you are considering retirement and you are overwhelmed, remember that help is available. There are consultants and advisors who will assist you with your retirement plan – including how to value your firm, how to find a suitable buyer for your practice, and how to gradually reduce your workload. Exit strategies, especially with solo law firms that have been in business for decades, can be difficult and complex. If the prospect of retirement seems overly complex, contact the Colorado Bar Association at (303) 860-1115 or 1-800-332-6736 for guidance on how to either sell or voluntarily shut down your law firm.
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