How to value a Law Firm

Without wanting to sound like we're hedging our bets, the best way to value a law firm is to use the term, "carefully".

That comment has to be followed up by saying that, like property, a business is only worth what someone is prepared to pay for it. The simple instrument of multiplying net profit doesn't always tell the full story, and you should consider, in no particular order, that valuing a law firm will entail the following;

• Is there any goodwill implicit in existing relationships ?
• What's the likelihood of, consistent, repeat business?
• Which are your core areas of business?
• What's the turnover?
• What's the profit?
• What are the liabilities?
• Which members of staff will stick around after a Sale takes place?
• Are there any PII implications?
• Will the departing lawyers stay around for a Consultancy period?

Whilst the list above might seem like a reasonably daunting checklist, a big part of how to value a law firm is being able to identify potential buyers... in the right quantity.

That helps with the timeframe issue, as we have more than one potential buyer looking to invest. We wouldn't necessarily recommend a contract race, but the more interested parties, the greater the expectation of matters moving at your timeframe.

In the first instance, our suggestion is to call 0345 603 0708 or email marketing@legalbrokers.com, and we'll discuss how we both arrive at the value and how we would achieve the valuation you are looking for.

Valuing Law Firms