Looking to buy a legal practice? Justin Purcell provide insight into the process and some possible issues that may arise.
Many solicitors progress their careers by either buying into a legal practice or buying one outright. Solicitors may be offered the opportunity to become a partner in their firm or as part of an employment offer. These opportunities are often a natural progression within a solicitor’s career, while they also facilitate planned succession within the firm.
Solicitors, for various reasons, purchase firms with which they have no involvement in preference to setting up a brand new firm. Buying can fast-track how quickly a solicitor is able to progress into viable self-employment. It can also minimise many of the risks inherent in setting up from scratch. Solicitors buying practices has slowed up in recent years and many practitioners who own valuable firms can find it difficult to find a suitable buyer. This situation brings with it the opportunity of extracting values for prospective buyers.
Practical issues
The benefit of buying a legal practice tends to lie primarily in the goodwill acquired. Goodwill refers to client loyalty and the likelihood of repeat business. The firm’s infrastructure can be valuable too.
Depending on the purchase agreement made, the acquirer of a legal practice may get the benefit of good cash flow from day one. The buyer needs to exercise careful due diligence to identify and consider any other possible problems. Buying a legal practice often involves up-front investment.
Guidance The Law Society has produced a useful leaflet on Buying a Legal Practice to support solicitors. If you have a query or need guidance, please contact Justin Purcell.
Information Sessions
Buy Sell Merge
If you are interested in buying, selling or merging your practice, or sharing facilities, check out the Law Society's Buy Sell Merge facility. Buy Sell Merge is an online Law Society facility developed for solicitors interested in:
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buying or selling a legal practice or block of business,
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merging with another firm to form a partnership,
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sharing premises or other facilities, or
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buying or selling equipment or anything else relevant to running a legal practice
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Law Society regulatory requirements
The Law Society’s regulatory requirements for setting up, retiring from practice, closure of practice, professional indemnity insurance, practising certificates and/or membership, can be found under the following sections, as relevant:
Professional Indemnity Insurance
Material relating to professional indemnity insurance including the Run-off Fund, minimum common risk management standard and the closure of practice guidelines is available under the PII section.
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