Is your exit strategy to die at the desk? Or are you thinking of selling your law firm at some future point? Who would buy it?
Now think seriously about what they would want to see before parting with any money. Better still; imagine you are acting for the purchaser in the sale of your own law firm. The usual scenario applies…the purchaser seems keen…says the vendor seems a great bloke (you agree with that)…wants to exchange contacts asap…not so fast we need to do some due diligence.
Do you have any systems?
Now here it gets tricky for your conscience. You know how to run the business or how at least you’ve been doing it for years, but none of those systems are written down and even if they are written are nowhere near current. You know clients come in but you have no presentable data to satisfy the enquiring mind of the purchaser’s lawyer. You could dish up some quick spreadsheet but you know in your heart that’s not going to cut the mustard. The guy doing the due diligence is on to you. What else?
- What written business or marketing plans do you have? None!
- What system of ongoing and planned marketing meetings can you show? Nothing really.
- What documents can you offer from three years back that show the targets and actuals with files opened per month and fees estimated v. targets? None – just as you thought.
Your due diligence hasn’t even really started but you get the point. And you are already forming a view on the quantum of purchase price being sought and the preliminary advice to your client. It isn’t looking good for this purchase unless the vendor will reduce his price!
For those practitioners who are thinking of selling their firm, they need to start the process of planning for the sale about three years beforehand. Why? Because that’s how long it will take to either write, or re-write and monitor the basic systems that may exist or partly exist as well as develop and establish marketing channels that you can honestly show a purchaser and robustly defend during a proper due diligence – your due diligence.
If you are genuinely intending to sell in the near future and don’t just want to walk away then you need to detach yourself from what you hope you might get for the business. Put your commercial hat on and take the emotional one off
The importance of marketing
Basically you need to be able to point to a regular flow of new work from actual figures compared to the budgeted or targeted figures. Yes, there will be good months as well as bad months, but the level of detail both in your plans and in the data will go a long way to demonstrate to any prospective purchaser how safe his hard earned purchase moneys are and how prudent the purchase is. If the inflow of work and revenues are trending down, imagine what you would say as the purchaser’s solicitor.
If you don’t have anything like this in place, now is the time to be doing something. If it’s marketing then the place to start is with newsletters. Send newsletters, sculpted to suit your firm, regularly to your own clients and referrers. As it is well known, it cost so much less to get new work from existing or past clients than to seek new ones, who don’t know you. So that’s where to start.
If you need any assistance in this area we will be happy to help, we know it’s hard to get started because you need to focus on the running of your law firm and naturally doing the legal work.
This is why we have recently introduced a four month trial version of Law News+, our newsletter service, where we write and send tailored newsletters to your clients by email.
If you want to find out more about Law News+ and how it can help your firm, click here.
About the author
Brian has more than twenty years’ experience in marketing and management across diverse industries including legal, real estate, tourism and technology. Brian lives in Sydney with his wife and two daughters.