In the Market for a Quaint Little Practice on the Carolina Coast?
Interested in buying a criminal and traffic law practice near Charlotte with a solid reputation and strong referral base?
How about an established bankruptcy practice in the western part of the state?
Or maybe you’d rather head to sunny Florida and take over a PI firm that opens approximately 400 new cases a year.
Those are just a few of the law firms listed for sale on The Law Practice Exchange.
“We try to take what an attorney or group of attorneys has built and preserve it for the future,” said attorney Tom Lenfesty, founder of The Law Practice Exchange, at the Lawyers Mutual Managing Partners Summit in May.
Selling a law practice is obviously different than selling a used car. Clients are involved, for one thing. This creates a host of ethical and professional concerns.
Accordingly, LPE says it helps selling attorneys do the following:
- Preserve Client Goodwill
- Provide Exit Strategies & Retirement Options
- Promote Mentorship
- Provide Alternative Growth Options
- Serve Clients Continuously
- Prepare Practices for Change and Transition
- Develop Succession Strategies
- Search for Potential Buyers Confidently and Confidentially
“The legal profession continues to change and with that change comes new challenges as well as new opportunities,” says the LPE website. “The Law Practice Exchange provides broker and transition services that preserve the client and professional goodwill of the practice, allowing a value based exchange between the selling and buying attorneys.”
Connecting Buyers and Sellers
As a practice broker, The Law Practice Exchange connects selling attorneys with buyers seeking to grow their business or expand to a different geographical or practice area.
At first glance, the LPE listings could pass for regular Home For Sale listings. Some of the offerings even come with real estate included. But the issues in play – including confidentiality and client continuity – require as much education as salesmanship.
“The Law Practice Exchange aims to educate on the existence of transition opportunities to promote knowledge, increase mentor opportunities and bring awareness to practitioners on growth and exit strategies available through buying, selling, merging or other transition options,” says the LPE website.
NC Rule of Professional Conduct 1.17 Sale of a Law Practice
A lawyer or a law firm may sell or purchase a law practice, or an area of law practice, including good will, if the following conditions are satisfied:
(a) The seller ceases to engage in the private practice of law, or in the area of practice that has been sold, from an office that is within a one-hundred (100) mile radius of the purchased law practice, except the seller may continue to practice law with the purchaser and may provide legal representation at no charge to indigent persons or to members of the seller’s family;
(b) The entire practice, or the entire area of practice, is sold to one or more lawyers or law firms;
(c) Written notice is sent to each of the seller's clients regarding:
(1) the proposed sale, including the identity of the purchaser;
(2) the client's right to retain other counsel and to take possession of the client's files prior to the sale or at any time thereafter; and
(3) the fact that the client's consent to the transfer of the client's files and legal representation to the purchaser will be presumed if the client does not take any action or does not otherwise object within thirty (30) days of receipt of the notice.
(d) If the seller or the purchaser identifies a conflict of interest that prohibits the purchaser from representing the client, the seller's notice to the client shall advise the client to retain substitute counsel.
(e) If a client cannot be given notice, the representation of that client may be transferred to the purchaser only upon entry of an order so authorizing by a court having jurisdiction. The seller may disclose to the court in camera information relating to the representation only to the extent necessary to obtain an order authorizing the transfer of a file. In the event the court fails to grant a substitution of counsel in a matter, that matter shall not be included in the sale and the sale otherwise shall be unaffected.
(f) The fees charged clients shall not be increased by reason of the sale.
(g) The seller and purchaser may agree that the purchaser does not have to pay the entire sales price for the seller's law practice in one lump sum. The seller and purchaser may enter into reasonable arrangements to finance the purchaser's acquisition of the seller's law practice without violating Rules 1.5(e) and 5.4(a). The seller, however, shall have no say regarding the purchaser's conduct of the law practice.
Sources:
- The Law Practice Exchange http://thelawpracticeexchange.com/
- NC State Bar Rules of Professional Conduct https://www.ncbar.gov/for-lawyers/ethics/rules-of-professional-conduct/rule-117-sale-of-a-law-practice/
