Will Your Law Practice Die With You?
If you were to try to sell your law practice, would it be worth anything?
A few years ago, a lawyer to whom I routinely referred clients for transactional and tax-related work died from cancer. For the purpose of this discussion, I’m going to call him Jack. Over the years, Jack and I became good friends.
Jack was diagnosed with stage four cancer five years prior to his death and went through several rounds of chemotherapy and radiation. He also had a bone marrow transplant, after which he was able to return to his full-time work schedule at his office.
About six months prior to Jack’s death, I called him on the telephone and discussed a potential client referral. After we talked about the client, he asked me what I was going to do with my law practice after I retired.
I told him that I was in the process of creating a law firm that did not require my direct participation. In other words, I was trying to create a sustainable business that would be able to function without me. That meant that I had to have marketing systems in place to supply the law firm with new clients on a regular basis. I also had to have one or more attorneys who worked for the law firm who could perform the work.
Jack told me that he had been thinking a lot about this particular topic since his cancer diagnosis. He was frustrated because for more than 30 years he had built up a very successful law practice that, if he were to die, would die with him. His practice was completely dependent upon him being physically present to meet with clients and perform the work. It had no value without him.
Jack died about six months after we had that conversation. I still get choked up thinking about him. He was a family man who was devoted to his wife and children. He always took good care of the clients I referred to him. I think about him a lot because I pass by his office building on a regular basis.
When I told Jack about my plan to build a sustainable business that could be sold, I was letting him in on a strategy that I learned from Rich Schefren.
You may have heard of Rich Schefren. He’s an internet marketer and a business strategist and coach who is hired by entrepreneurs to help grow their businesses. Rich has an internet training program that I subscribed to and have benefited from, called the Business Growth System.
According to Rich, four elements are needed to create an ideal business:
- The business should be successful, which means that it’s always able to pay the bills and you.
- The business should be sustainable, which means that it has the potential to be ongoing.
- The business should be scalable, which means that it is strategically designed to grow.
- The business should be sellable, which means that it can ultimately be sold like any other asset.
Unfortunately, like most small business owners, we lawyers get caught up in the day-to-day grind of doing the technical work that is required of us, while ignoring the important aspects of growing a successful, sustainable, scalable, and sellable business.
While it’s something that you may not have given serious thought to, it is possible to actually build a law practice that you can eventually sell to another lawyer or group of lawyers. The only way to do that is to have marketing systems in place that will predictably and reliably generate new clients on a daily, weekly, and monthly basis.
Here’s the question that most lawyers ask after they’ve made the decision that they’re never going to achieve their financial goals until they set up the right marketing systems: How am I ever going to find the time to create and implement the marketing systems that I need to grow my law practice?
You may not like the answer to my question, but here it is: The only way you’re ever going to be able to develop and set up the marketing systems that you need is by blocking off time on your calendar each week to work on them.
The time that you set aside for this purpose is more important than any case that you are working on. Why? Because it can be the difference between ending up with a valuable law firm that you can sell when you want to, or a law firm that will die when you either die or walk away from it.
The choice is yours to make.