I am a solo practitioner in Southern Indiana. I have been practicing law for 43 years and I want to retire next year. My practice is a general practice firm although approximately 80% of my work is estate planning and estate administration. I am the only attorney in the firm and I am assisted by one paralegal that has been with the firm for twenty years. She plans on working for another ten years or so and will need a future home. I am not sure whether there is any practice value, whether I should just close the practice, or whether another attorney or law firm might be interested in my practice. Your advise would be greatly appreciated.
A practice review would be required to determine the potential value and marketability of your practice. If your firm has generated adequate revenues, net earnings, and a diversified base of clients and or referral sources your practice should have an appeal to another attorney or law firm. The key question as to whether there is a goodwill value is whether future cash flows will continue from your clients and referral sources after you exit the practice. It has often been said that clients hire the lawyer – not the law firm. However, a well planned client transition with the new acquiring attorney or law firm can increased the odds of success.
I would only consider closing the doors and shutting down your practice as a last resort option. You will not receive any value for the sweat equity that you have invested in the firm or a home for your clients/referral sources and your paralegal. Before considering this last resort option I would begin a search for other candidate attorneys that you might be able to sell your practice or law firms that you might be able to merge with or join up with in an Of Counsel arrangement. An Of Counsel arrangement is often a solution in your situation. In essence you winddown your practice operation, bill out your work in process and collect your receivables, and take your clients and employee over to the other firm. After joining the other firm you work as long as agreed to and you:
Typically you will be paid under an eat-what-you-kill system based upon your fees collected based upon, working and originating attorney, while working at the firm and sometimes receive a goodwill value based upon a percentage of your client origination fees collected (past and future clients) after your retirement for three to five years.
Joining another firm would be a better option than shutting down if you can find the right fit.
John W. Olmstead, MBA, Ph.D, CMC
I am a partner and a member of a three member management committee in a eighteen attorney firm in Chicago. During the past year we have discussed conducting an offsite long range planning retreat in the fall that would include the partners and other attorneys in the firm. We have never done this before so this would have been a new experience for us. However, with the COVID-19 crisis we have cancelled our site reservations and are wondering whether we can still conduct our retreat remotely? Any thoughts you have would be appreciated.
Sure you can. I suggest that you consider a virtual retreat using Zoom or some other communication platform. Organizations are holding virtual conferences, churches are conducting virtual services, and law firms are conducting virtual retreats and planning meetings. Last week I attended a two-day video conference and the process went extremely well. There were even small group breakout sessions that focused on specific topics. While a in-person format is preferable, you can get the job done with a virtual retreat. During the current crisis a retreat and long range planning is more important than ever. So, I suggest that you try a virtual retreat.
Here are some suggestions regarding planning your first retreat:
A retreat differs from the typical firm meeting in that it is a specific structured program with an agenda of topics and procedures agreed to in advance. The purpose of the retreat is to help facilitate change. For example:
Setting up a retreat involves all of the following steps:
The first step involves key members getting together to discuss their initial thoughts about the firm, its structure, and its organizational problems to brainstorm for possible topics. Partners and other members of the firm can also provide written suggestions for the agenda. Tentative retreat objectives can be formulated at this time.
A preliminary program is formulated. An appointed retreat coordinator or team develops the preliminary program including tentative:
The coordinator works on further defining goals and objectives of the retreat, how it is to be coordinated, and who will be responsible for various functions and activities. Coordination checklists and timetables are developed.
The preliminary program is circulated for comments and suggestions. Changes are accommodated and the finishing touches are put on the program. The partners agree on all details of the agenda and program and the program is finalized.
The brainstorming process will require background data. Internal data such as firm financial reports, client lists, lawyer productivity reports, etc. and external information such as demographic and census data, information on competitors, business trends, etc. should be compiled and organized into appropriate presentation formats such as PowerPoint presentations, whiteboards, flip charts, and handouts.
A moderator should be assigned to the retreat. The moderator can be a member of the firm if the firm has a member who can be objective and has the skills to properly facilitate a retreat or the moderator can be an objective outsider who has the requisite skills. The moderator serves as the “tour guide” and keeps the retreat on track, in focus, and provides resource information when required. The moderator should be given the authority to control the retreat and enforce the ground rules.
A retreat will not be successful unless an implementation plan is formulated during the actual retreat and made a part of the proceeding. Specific assignments and completion dates must be agreed upon during the retreat itself and schedules for reporting on progress must be determined.
At the conclusion of the retreat the outcome of the retreat and the implementation plan should be summarized.
Within two weeks after the conclusion of the retreat a retreat report should be written and distributed to all firm members in attendance. Completion dates should be placed on the firm’s docket control system. A retreat follow-up item should be on each and every firm meeting. A post retreat evaluation should be conducted six months after the conclusion of the retreat.
John W. Olmstead, MBA, Ph.D, CMC