Many attorneys seek to increase the value of their law firms. Valuation is important for an attorney who may want to sell, retire, add a partner, or prepare for the possibility of public investment, a trend for which there is significant momentum around the world and – recently – in the U.S.

1. Efficient and Scalable Operational Workflow.

An efficient, scalable workflow may be the most important factor when determining value, in large part because a potential buyer will have the ability to combine operations and add client volume, while still maintaining historic (or even improved) profit margins. Same profit margin on higher revenue means more profit.

2. Demonstrate Consistent Revenue Stream.

Astute potential buyers will review many factors when investigating your revenues, but the ability to show a consistent stream of clients and revenues will almost always weigh in your favor. Whether via marketing efforts or referral sources, a repeatable flow of clients will reduce uncertainty and risk for a potential buyer.

3. Accurate and Presentable Financial Metrics.

You should maintain, and have the ability to present, accurate historical financial data. This data should include an income statement (P&L) and balance sheet, and may include other key performance indicators (KPIs). Being able to show financial trends will certainly increase the attractiveness of your firm.

4. Proper HR documentation.

Having a history of solid H.R. and employee documentation may improve your company’s value. Such documentation may include, but is not limited to, non-disclosure agreements, employee contracts, and adherence to progressive discipline policies. An H.R. department that is organized and consistent presents less potential future legal liability for a potential buyer.

For assistance with Law Firm Consulting, or with any other legal needs related to your business, contact Fournier Legal Services at jfournier@jeflegal.com or 860.670.3535 now for a free consultation and planning session.