Asset Management: How Your Law Firm Pays Off in the End

Most solo and small firm attorneys think of their law firms as a salary replacement for a full-time law firm job, with some upside: both on income, and freedom.  But, that’s it.  Lots of lawyers are looking to run out the clock on their practice, and then ride off into the sunset – or, work until they die.  I know I’d prefer the former; and, if you do, too – why not ride off into the sunset with some loot, like the hero (or villain), in a Western movie? 



Now, for sure, your law firm is a valuable asset to you throughout your career.  But, a law firm can be a valuable asset for sale, as well – even if many attorneys never consider that option.  A whole host of attorneys are out there optimizing their law practices for current revenue – but, far fewer of those lawyers are looking to create a saleable asset.  Yet, that can become a significant chunk of revenue, for when you retire, or if you decide to move on + try something new, one day.  Your law firm could fund your next venture. 

 

So, law firms will sell for 1x gross annual revenue – usually an average of the last e years.  I mean, that’s still pretty good – but, you can potentially increase that conversion metric, by implementing systems, focusing on marketing and considering revised pricing models. 

 

Also, while currently your only potential buyers for your law firm are other lawyers, the specter of alternative business structures means that that market could expand. 

 

. . .

If you want to talk about the future value of your law practice, just reach out! 

Through a unique partnership between the bar association and Jared Correia's Red Cave Law Firm Consulting, National Creditors' Bar Association members have access to experienced law practice management consultants at a special discount rate.

To get started, visit Red Cave's NCBA landing page, and start running your law practice like a business.

Comments

Post a Comment

Popular posts from this blog

Top Shelf: How to Maximize Lawyer Staff in a Modern Law Firm

Image
Broadly speaking, lawyers take on too much.  You know: at work, emotionally.  They’re probably also trying to carry too many grocery bags into the house at one time.  You know how it is.     This, of course, leads to a whole host of problems, including that attorneys have higher incidences of alcohol and drug dependence, as well as depression, than does the general population .  Maybe you already knew that.  But, the fact is that this also has a direct effect on how much a lawyer can make. Hear me out: Because lawyers try to do everything, and to do everything perfectly, they’re also more prone than the general population to take on more work than they need to.  For example, they’re unwilling to delegate, including to paralegal and administrative staff, but also to other attorneys.  That means that lawyers end up being chief cook and bottlewasher, rather than focusing on the high-end work (strategy , client engagement), that they get paid the most for.     That’s why developing proces
Read more

Hiring Percentage: What is the Law Firm Hit Rate for Bringing on Staff?

Image
Some lawyer s get burned hiring staff, whether it’s legal assistant s , paralegals or other attorneys .  But, just because you miss out once, in trying to hire somebody, doesn’t mean you should give up forever .  There are distinct advantages to bring ing on employees, including increased control over work product + improved revenue generation models.   In my experience, I’ve found that law firms connect on a successful hire (across all employee categories) about 40% of the time .  That may seem like a low number , but it represents about a 50% hit rate, meaning that every other hire should yield a viable staffperson , who’ll stay on between 3-5 years – which is not too bad, in the modern economy.     Putting that into baseball terms, which folks often do when trying to rationalize failure : your hiring batting average as a law firm, is about equivalent to Ted Williams’ 1941 season , when he was the last baseball player to hit .400 over a full seasons . . . over 80 years ago.
Read more

New or Noob: How Law Firms Tend to Hire

Image
Every lawyer I’ve ever met wants to do everything on their own.  In other words, every lawyer secretly desires to be a solo attorney.  Of course, there comes a time when your business grow s  to the point that you need some real help; and, since you can’t clone yourself, it’s necessary to hire.   Many attorneys who start to hire want to do so as cheaply as possible; and, that often means, in addition to  probably not offering substantial benefits (or, maybe opting for a contractor), that lawyer will hire another attorney or paralegal or legal assistant with little to no experience.  The low salary is appealing, as is the presumed clean slate being offered: you can train someone up now, exactly the way you want to.   But, that line of thinking can be replete with holes.  In the first instance, this notion of law firm training is more theory than practice -- as this purported intensive training for attorneys and paralegals and legal assistants doesn’t really ever materialize
Read more