Asked and Answered

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

Q. John, where do you begin to get a value on a family law practice? It seems that one times gross revenue is unfair since it is usually one time business. I saw you speak at an ISBA event and this question was not addressed.

A. Regarding your question - it sort of depends on whether you are buying or selling and where you want to start. In general, I agree with you that a multiple of one times gross for a family law practice is probably high. It depends on whether the practice has built up more of a firm brand vs. an individual brand. In other words institutionalized the practice. Also on where and how the firm gets business - advertising, referral sources, etc. A firm that has practice (institutional) goodwill might very well start at a multiple of one whereas a practice where the goodwill is personal goodwill the multiple might be .75 or less - in some cases even zero. I know of a few family law practices in the Chicago area that have been sold for .33 of gross revenue. 

Often the initial asking price has little to do with regard to where you end up. Often, due to the concern that the clients and business might not materialize for the new buyer many firms are sold on various forms of an "earn-out" or a small payment at closing with the remainder paid and based on a percentage of revenues collected over a period of time - 3 to 5 years.

I have seen PI and other one shot matter firms sell for one times gross revenues but this is a best case scenario. CPA firms fare much better.

Chief Justice Rita B. Garman of the Illinois Supreme Court and Chief Judge Timothy C. Evans of Cook County Circuit Court announced Tuesday that media cameras soon will be allowed in some Cook County criminal courtrooms.

Chief Justice Garman said that the Supreme Court has given its approval for the Cook County Circuit  Court to become part of a pilot program already being implemented in 40 other counties in Illinois.

Effective Monday, January 5, 2015, the media will be allowed to video and audio record proceedings at the George N. Leighton Criminal Court Building at 26th Street and California Avenue in Chicago in accordance with procedures contained in the Illinois Supreme Court Policy on Extended Media Coverage and a new local Circuit Court rule promulgated by Chief Judge Evans.

“The opening of Cook County criminal courtrooms to media cameras is a significant and very welcome step in our efforts to bring greater transparency to the judicial process, while protecting the rights of the accused, witnesses, and jurors," Chief Justice Garman said. "The experience with media coverage in other judicial circuits has been overwhelmingly positive, and it is time to extend the pilot program to the most populous county in the state.

The Illinois Supreme Court announced Monday that Jodi Melinda Hoos has been appointed Resident Circuit Judge of Peoria County, 10th Judicial Circuit. This vacancy was created by the retirement of the Hon. Michael E. Brandt. it is effective Dec. 29, 2014 and terminates on Dec. 5, 2016.

Sign-up Today (Dec. 15) for January 1 Coverage.

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The Joint Midyear Meeting hosted by the Illinois State Bar Association and Illinois Judges Association kicked off Thursday afternoon with the Opening Reception at the Sheraton Chicago Hotel & Towers. Highlights on Friday include the sold out luncheon featuring U.S. Attorney General Eric Holder and the Supreme Court Dinner featuring Illinois Supreme Court Justice Robert Thomas.

View the full schedule at www.isba.org/jointmeeting

View pictures from the Opening Reception at iln.isba.org/gallery/834/midyear-meeting-2014-opening-reception