It's a fact: Successful business sales take time.
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Yet what many sellers don't appreciate is that a down economy can present the perfect opportunity to sell a legal services business.
It pays to invest in first-rate legal counsel when you sell a legal services business. A good lawyer serves a variety of functions during the process. In addition to reviewing the letter of intent, sales contract, and other documents, your attorney should be capable of advising you about due diligence and the tax consequences of the sale. We recommend hiring an attorney early in the process to gain insights about the legal consequences of various sale outcomes.
Pros & Cons of a Sale to an Employee
Employee sales have pros and cons. There are some perks to selling the business in-house. If you need to sell quickly, the timeframe is condensed in an employee sale because you don't need to track down a buyer. Yet most employees lack the means to buy their employer's business at or near the asking price. Most of the time, employees also expect owners to finance a large portion of the sale. So if you aren't willing to finance the sale or need to get top dollar for your legal services business, a sale to an employee is probably not a possibility.
Timing the Market
Timing is everything when it comes to selling a legal services business. A depressed economy means lower interest rates; lower interest rates increase the number of investors willing to take a chance on legal services businesses. When the economy recovers there will be more legal services business buyers on the market, but higher interest rates could present challenges. Market conditions can be intimidating. But your larger concern should be whether or not your business is ready to be presented to qualified sale prospects.
Ready to learn more? You may find these additional resources to be of interest.
If you plan on opening a legal services business, these guides will help you get started:
If you consider legal services businesses to be sales prospects, there's more applicable information for you elsewhere on our site. These helpful guides are more appropriate for you:
If you are looking for exit plan advice for a different kind of business, please browse our alphabetical list exit planning guides below.