Busy time for law firm M&A means appraisal ops

It was another busy year in 2016 for law firm M&As, according to a release from Altman Weil, which tracks this activity. The robust market plus the impending mass retirement of baby-boomer attorneys who own law firms mean a wealth of opportunities for business appraisers and consultants. So check out the latest in the series of What It’s Worth valuation guides: What It's Worth: Law Firm Value. It provides key industry trends and data to help benchmark the value of a law firm. Also, it will help you understand the key considerations to take into account when valuing a law firm including goodwill, billing, and productivity. 

For example, one special consideration you need to ask about is the “origination credit” aspect of compensation plans. Origination credits are given to staff for bringing a client into the firm. There may be a formula that gives the originator a percentage of billed fees right off the top. This system works great for some firms, but other firms have trouble trying to figure out who originated what. When doing your initial interviews or requests for information, ask whether origination credits are used and what formula is used. Also ask how the plan is working out.

Have you had any interesting experience valuing a law firm? Tell us about it in the comments section below!