How do we compare offers for our law firm?

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How to Compare Offers for Your Firm

An offer should be assessed as a complete proposal. The headline price alone does not show when you will be paid, what conditions apply or how much involvement the buyer expects from you. There is a bit of a rule of thumb that the payment made on completion is the purchase price and anything else is bonus (there is always a risk to payments made based on future events or simply delayed).

Compare the Same Information

Ask each prospective buyer to explain:

  • Payment at completion: how much is payable when the transaction completes?
  • Later payments: are payments fixed or dependent on future performance?
  • Conditions: what finance, approvals or further checks are outstanding?
  • Your future role: how long must you remain, doing what work and on what terms?
  • Transaction scope: what happens to cash, debt, work in progress and outstanding fees?
  • Staff and clients: what transition does the buyer propose?
  • Timing: what must happen before the proposed completion date?
  • Successor practice status and PII issues – how are they going to be dealt with?
  • Due diligence on the buyer – who are they and do you trust that they will pay future amounts when promised?

Understand Conditional Payments

Where consideration depends on future results, establish how those results will be calculated and what influence you will retain over them. Ask your professional advisers to examine the wording, payment protections and consequences of a disagreement. Two offers from different buyers with the same value can expose a seller to very different risks.

Match the Offer to Your Objectives

An owner seeking a prompt retirement may prefer a different arrangement from one who wants a continuing management role or to benefit from future profit increases. Discuss your priorities before negotiations become focused on price alone.

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Heads of Terms for a Law Firm Sale or Merger

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General FAQ's

What is a Shell Law Firm? What does a business broker do? Why is there a surge in buyers looking to acquire law firms in September and October each year? Why are there so few accountancy firms for sale on your website? Do you provide accountancy practice valuations? Are business brokers regulated? What underhand tactics do business brokers use? How secure is our data? Do you offer due diligence services?