January 28, 2026
We recently held a webinar on Law Firm Sales & Valuations, which was attended by over 80 law firm owners from across the UK and Ireland. There was time for a Q&A at the end, and these were the questions asked, together with our answers.
Q: What sort of broker fees would a seller look at? Who pays these fees?
A: Broker fees depend on the broker. Many national brokers are seller-side and charge the seller an upfront (and in some cases ongoing) marketing fee, plus an additional fee if the sale completes. Buyer-side brokers are typically paid by the buyer on completion (often a fixed fee) and do not charge the seller. Some sellers may choose paid “premium” support services (e.g., valuations, deal structures, process support). Specialist brokers often sit between both parties and advise confidentially to help guide the deal through.
Q: Is there a market for small law firm mergers?
A: Yes, but it depends what you mean by “merger.” In the strict SRA sense, a merger is where two firms create a new entity and close the old ones. Many deals described as “mergers” are actually one (often weaker) firm joining a stronger firm, which is effectively a takeover. Two equal firms combining can happen, but it’s often structured using one existing entity to avoid the heavy admin and regulatory burden of closing both and starting a new one.
Q: How does an internal conflict between partners affect the ability to sell?
A: If all partners support the sale and cooperate, a sale can be possible. But if partners are arguing throughout, it becomes very difficult for a buyer to complete. For example, if one partner wants to sell and the other doesn’t, and the seller wants someone to buy into that situation, it’s virtually impossible because buyers don’t want to walk into an ongoing conflict. A valuation for a buyout by the other partner (or someone internal) may still be feasible.
Q: How far in advance should you think about speaking to a broker?
A: If you’re aiming to sell quickly, around a year in advance is often fine. If you’re planning longer-term (well ahead of exit deadlines), then any time is a good time—even partners in their late 30s or early 40s aren’t too early to start discussing options.
Q: Is it possible to pin down which transactions require a cash payment or deposit versus instalments or earn-out?
A: Not exactly – it very much depends on the buyer and the overall deal. As a rough example, if a practice was valued at c£750k, a seller might aim for a £200k–£250k deposit, with the rest paid over time (negotiable). Earn-outs are rare at these levels. Future payments are often paid from business profits and may not be guaranteed unless additional protections are negotiated. Sellers are often advised to view the upfront deposit as the real price because it’s the most secure & future payments tend not to be guaranteed.
Q: Can the seller have any guarantees against the buyer going bust?
A: Sometimes, but it’s uncommon. Payments can occasionally be held by a third party and released at a future date regardless of what happens, but this is rare and buyers are often hesitant to go down this route. More commonly there’s an upfront payment and then future instalments without guarantees, which brings the issue back to trust in the buyer.
Q: Does a will bank have any value?
A: It’s difficult to separate out. We understand that an SRA-regulated entity can generally only dispose of a will bank to another SRA-regulated entity, while the parties most likely to pay specifically for will banks are usually non-SRA entities. In practice, a will bank usually adds value as part of the overall firm value rather than having a standalone price. Large, well-documented will banks with accessible marketing data can increase saleability.
Q: Who draws up the sale agreement?
A: Usually the buyer drafts the sale agreement (SPA or BPA). It’s rarer for the seller to do it, though it does happen occasionally.
Q: Why is having a recent PII claim such a problem if you’ve otherwise had a good PII record?
A: Because a law firm buyer typically has to run the acquired practice through their broker or insurer to get a quote, and claims in the last three to five years can lead to a significant premium increase even if it didn’t heavily affect the seller’s own premiums. It matters less to individual solicitor buyers because they may well be simply taking over existing premium arrangements.
Q: Is there a difference between a notification and a claim when it comes to selling?
A: Yes. Notifications that didn’t turn into claims can often be discounted if you can explain them and they don’t look serious. However, a high volume of notifications may still raise questions about what’s happening in the practice. If they’re clearly spurious, they typically won’t affect value or saleability.
Q: In your experience, what would the legal fee be for a sale of circa £350,000?
A: It depends on the solicitors used. An example specialist firm might charge fixed fees such as around £1,500 for heads of terms and about £1,000 more for an SPA or business purchase agreement, with an overall affordable figure mentioned around £5,000. Other specialist commercial practices could cost £15,000–£20,000 or more. The key is to find someone experienced in SME law firm acquisitions without consuming too much of the sale proceeds.
Q: For a solicitor in their 40s, is it worth converting to an ABS, given potential PII impact?
A: The short answer given is yes. It’s a complex area and specialist advice is recommended (we can point you in the right direction). Conversion can significantly increase saleability and value because it opens up a market of investor buyers who couldn’t buy otherwise, or would have to spend time & money converting. Conversion is said to take six months or more in practice and typically doesn’t increase your insurance cover too much, though it changes liabilities in various ways.
Q: What is a shell company? Is there a market for shell companies, and how do you market one for sale?
A: A shell firm is typically a practice that has traded and has a clean PII history, reasonable premiums, and no clients. Limited company shells are generally more valuable than sole practitioner shells due to insurance issues. Such shells presently attract a premium in the £20k–£45k range. Demand comes from buyers who need to start quickly for regulatory reasons, have a project they require a small law firm for, or who struggle to obtain insurance as a new entity (very common). ABS shells with accreditations or panel status tend to attract higher premiums.
Q: On the sale of a law firm (for example, a traditional partnership), how is run-off cover dealt with?
A: If there’s a successor practice or individual solicitors come in and carry on the practice, run-off cover shouldn’t be needed because the practice is continuing in the same or slightly different form. Despite this, some brokers seem to want to claim that everyone has to have run-off cover if they exit, creating confusion in the market! The general position is that continuation or a successor practice usually means no run-off cover. Check your policy terms and also the SRA pages re PII.
Q: What other terms form part of negotiations other than the sale price?
A: Common negotiation points include whether owners stay on in consultancy or salaried roles, how WIP is valued and paid, premises and lease obligations, and how much cash must remain in the bank to cover short-term liabilities. Law firm deal structures are interconnected, so negotiations are rarely about just one cash price.
Q: What is the market like for legal aid practices?
A: Legal aid practices generally do sell and tend to have value, often because buyers see ongoing contracts and revenue potential. It’s easier to buy a practice with an LAA contract than to establish a new law firm and apply for a contract (we are not sure when the next contract application deadlines are). Demand depends on the firm’s wider circumstances.
Q: If a sale does not materialise and the firm lacks suitable management, what are the alternatives to winding up? Can this be done positively?
A: Alternatives include selling parts of the business, such as clients and staff, sometimes leaving the owner with the structure and run-off cover. Another option is to close and run down clients over time, though this usually involves run-off cover and redundancy costs. The general advice is to try marketing first and, if unsuccessful, review why the firm isn’t attracting buyers before deciding to close.
Q: What is the average multiple of EBITDA paid for a two-partner retiree practice?
A: There is no meaningful average EBITDA multiple for that scenario. Using EBITDA multiples for valuing small two-partner practices is often not relevant, as valuation depends on many other factors considered together. Market valuations are the key here.
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