We do not usually recommend indicating a sale price unless you have something very specific in mind. Law firms in particular are notoriously difficult to gauge a price for, because they do not have the same realisable assets that an accountancy firm for example has.
Accountancy practices tend to be valued on the number of repeat clients who come back year after year to get their annual accounts completed and receive advice in the interim. An accountant tends to know what recurring fees they have coming in, or what likely recurring fees they have coming in, but a solicitors’ firm rarely does.
Solicitors’ firms may have regular clients who, if they have a legal problem, will use them, but they never know how often those legal problems are going to arise, which means that they are unable to give a recurring fee valuation. The only exception to this is when an employment department for example has recurring fees from clients paying subscriptions for ongoing services or business clients are paying an ongoing subscription for their own in-house lawyer provision. Because of this we normally just recommend including the facts about your firm in the listing, and then leaving it up to discussions for a price to be formulated.
The danger of putting a price on the practice on the listing is that you can immediately rule out lots of potential buyers who might look at your price and think it is way too high, or similarly you may rule out higher bids than the price you were thinking of, which surprisingly happens a lot more than you would anticipate.
So in summary, we do not usually recommend including a price on a law firm listing, but to wait until discussions start and then formulating an idea as to the sort of price you want for your business. We offer valuation & exit advice and reports to all sellers and details can be found here – exit strategy advice – and here – valuation services.
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