The market for buying and selling law firms continues to grow. The demand for information, data, and knowledge in this area is significant.
Fortunately, Tom Lenfestey with the Law Practice Exchange has compiled a first-of-its-kind, Law Firm Buying & Selling 2022 Trends Report. We’re going to talk with Tom about his findings.
LMCS: Tom, why a Trends Report?
TL: In recent years, we’ve seen tremendous growth in the numbers of buyers and sellers of law firms. Established firms and attorneys are looking for succession or sale due to attorney retirement, labor needs, and the changing marketplace. Next generation law firms are seeking growth through acquisition. The time seemed right to compile the data we’ve been collecting and share it with potential buyers and sellers.
LMCS: You outlined 12 top trends to watch in 2022. Why don’t you share a few with us?
TL: Relocation is a top trend. Lawyers, like so many other workers, have relocated in the past 24 months or have plans to do so. This opens more opportunities on both the selling and buying sides for law firm deals.
Another trend is more available funding for law firm deals. Banks, private lenders, and others are becoming even more active and focused on providing funding for law firm buy-ins or acquisitions and are working to craft better and more competitive lending platforms to do so.
LMCS: An important component of the Trends Report in my estimation is the snapshot of the typical seller and buyer.
TL: Yes, I think it’s no surprise that our typical seller is male, over age 65, and is approaching 40+ years of practice. Female sellers are retiring younger, so they are typically over the age of 55 and approaching 30+ years of practice.
Sellers indicate their top reasons for selling their law firm include wanting to spend more time with family, a desire to create a continuation plan for the firm, its clients, and the employees, along with a goal of monetizing the value of the firm through sale or exit.
Our average firm buyers are males and females between the ages of 30-40 who have been practicing 10+ years.
The most common reasons for buying a firm include revenue growth, ownership opportunities, and geographic expansion.
LMCS: The Trends Report covers other information such as top practice areas sought by buyers, typical financials of selling firms, and lessons learned from successful transactions.
Tom, is there anything else you want to share with our audience?
TL: We have two pieces of news. This summer, we plan to release our second book, “A Guide to Buying to a Law Firm”. The book will include case studies, scripts, and checklists to prepare buyers who are looking to make an investment in their law firm through purchase of a practice. The book will be available on Amazon.
In October, we will be co-hosting a Buying & Selling Academy in Wilmington, North Carolina. Prospective sellers and buyers will be encouraged to attend to learn more about the process as well as meet prospective buyers and sellers of solo, small and mid-size law firms. We will have guest speakers, workshops, and networking opportunities. Wilmington in the fall is great, I hope you’ll join us!
Click here to review the 2022 Trends Report.
About The Author
Camille Stell is the President of Lawyers Mutual Consulting & Services and the co-author of Designing A Succession Plan for Your Law Practice: A Step-by-Step Guide for Preparing and Packaging Your Firm for Maximum Value. Continue this conversation by contacting Camille at firstname.lastname@example.org or 800.662.8843.
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