Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am a sole practitioner in Bloomington, Illinois. My practice is a general practice and most of my clients are either individuals or small businesses. I have one legal assistant and one paralegal that work for me. I am 62 and am starting to think about what to do with my practice and what I need to be thinking about concerning selling my practice. I would be interested in your suggestions.

A. I would start by asking yourself when you actually want to retire or quit. Do you really want to stop practicing law or do you want to work forever? Over two-thirds of the solo and small firm lawyers that I speak with advise me that they want to practice forever - maybe not full throttle - but on a continued but scaled back schedule. Review Rule 1.17 - Illinois Rules of Professional Conduct to insure that you understand the method and the restrictions involved in sale of a law practice. If you want to continuing practicing determine whether selling your law practice is your best option given Rule 1.17. Some of our clients are exploring other options including bringing in other attorneys and forming partnerships or merging with other firms.

If you determine that selling the practice is the route you want to go here are a few ideas to begin readying it for sale:

1. Decide when you want to retire and leave your firm.
2. Determine to whom you would like to transfer the practice.
3. Determine the goals for sale of your practice and the priority and what is most important to you. (clients, staff, money or sweat equity, etc.)
4. Determine how much the practice is worth today.
5. Begin finding way to institutionalize the firm so the client and other relationships are less uniquely you.
6. Begin implementing management practices that will systemize your firm and improve it's future value. (written procedures and policies, checklists, forms, automated case management systems, organized client files, accounting systems, etc.) Document everything.
7. Draft and implement a succession/exit plan and implement same. Insure that it incorporates safeguards for your clients, employees, and family if the unexpected happens to you.

Click here for our blog on succession topics

Click here for our article on succession strategies

Click here for our article on valuation

John W. Olmstead, MBA, Ph.D, CMC,(www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact John at jolmstead@olmsteadassoc.com.