By Cammie Hauser, Atticus® Senior Practice Advisor
Do you have a strategy to exit your practice? What are the different options available? How far in advance should you plan your exit? These questions and more will be explored in order to enable you to plan and optimize your exit.
The first step involves setting goals and then determining the strategy (or strategies) that will provide the best plan for success. Everyone will eventually leave their practice. The question is under what conditions? Will you control or influence your departure terms or will others? There are many options that can be part of your exit depending on how well you plan and implement.
What action can you take now (today) that will pave your path for your successful exit? Can you do anything that will maximize the value of your practice? What are the key indicators in your practice that you should be aware of and monitor regularly? This may involve making different decisions than you currently make on a daily basis by considering the long-term goals rather than the short-term. It is difficult for many of us to operate naturally with a long-term focus without encouragement or outside persuasion and accountability.
Each practice type has different “assets” that increase the value of your practice. Most of these are intangible assets that you can focus on increasing over time. The key is to understand your baseline and then intentionally increase that particular “asset” in both quantity and quality. An example would be the database of your prior clients. How many do you have? Is the information up to date? Can you use it for contact purposes? How effective has it been for your practice? Can you show a percentage of prior clients that have returned for additional services? This is a great “asset” that benefits your firm for many years to come; even after you have exited the practice.
Depending upon your plan of exit, you should develop in writing your expectations and things that must happen in order for you to be comfortable with the exit. These are deal breakers (or no compromise on that issue) that help to create clear direction in what will provide your best chance for smooth transition. By reducing it to writing, it can actually help you to start to process and visualize exactly what your exit will look like. You may even modify these as time progresses but it is a great tool for implementation.
There are a number of options that exist to exit your practice. One is to outright sell the firm. Another may be a merger. Still another method is to identify, train and develop a successor internally. Each one of these options requires a different amount of time and effort. The best solution is to go back to your goals and then rank the options with time considerations. Your practice area, market place and even your personality effect these options. You can try your most preferred method but always have a plan B in case you need an alternative.
Will you be compensated appropriately for all the time, money and effort put into your firm for many years of investment or simply disappear and have your practice legacy end? The choice is yours.
Will you be able to transition out of your practice one day, create a succession plan and capture the value you’ve invested in your firm? The Atticus Succession Planning workshop for Attorneys walks you through what you need to know to plan for your future.