J. Vachon, photographer, Library of Congress Prints & Photographs Division, LC-USF34-063713-D
While buying an existing practice is not for the faint of wallet, it can be a way to bootstrap your small town legal career. An existing practice comes equipped with community connections, a client base, the possibility of an in-house (or at least in-town) mentor, and existing overhead. Just because the average rural law firm buyer is an established lawyer looking for a quieter place for a solo career, this does not mean that the newly graduated shouldn’t consider this option (just be sure your financial ducks are in a row).
Before shopping for a practice, its a good idea to do a bit of planning before hand. Have some idea of where you’d like to practice, the type of practice you’d like (it is hard to change the course of an existing small town practice – your clients will have certain expectations and these are not going to change overnight just because you’d rather do estate planning than family law), and the type of deal you’d like (what will the transition period be like & how long will the seller stay on with the firm, how payments will be made, etc).
Once you have an idea of the where, what, and how and have located a few potentials, it is time to do your due diligence. You’ll need to find out things like: just how much of the practice’s book of business is transferrable, how the firm obtains new clients (is this all due to the reputation of one individual?), the percentage of referrals, the percentage of repeat clients, the firm’s overhead, and the method used to determine the firm’s value, just to name a few.
It takes a great deal of hard work and out of the box thinking to track down and get into the right existing practice, but it is possible – it is even possible to structure a deal that requires little upfront cash (granted these deals usually require extended payment periods, balloon payments or payments based on future revenue).
If you don’t mind being out here in the frozen prairie, there’s a nice little real estate/estate planing/municipal law practice for sale over by the Mississippi river. If you’re interested, give Roy Ginsberg (roy(at)royginsburg(dot)com) at shout. Roy’s not the one selling, he’s simply acting on behalf of the owner.