Selling A Practice: Allowing it is in everyone's interest

Selling a law practice to another qualified lawyer (or lawyers, for portions of the practice) no longer violates the code of professional ethics in most states.

Some lawyers still believe they have little or nothing of value to sell, irrespective of the size or profitability of their practice. However, it is my experience that most lawyers would find selling their practices far preferable to just closing the doors.

Think about it: After investing years of hard work and financial resources in growing the practice and building goodwill, why would a lawyer forego the opportunity to reap the benefits of that years-long investment? Even in the event of a lawyer's death or disability, the lawyer's family can benefit from the sale of the law practice.

So, to my mind, the most beneficial choice for all those involved is to sell the law practice to another qualified lawyer (or lawyers). Not only do the buying and selling lawyers benefit, but the clients also benefit when they are smoothly transitioned to receive competent representation from a qualified buyer.

There are a number of ethical considerations that make selling a practice worthwhile. These are three of the major ones:

1. Selling helps the client

   Aging lawyers or lawyers committed to closing their practices emotionally leave their clients long before they close their doors. This often results in less effective representation long before the actual closing.

   Lawyers able to sell and transfer their business to lawyers who want to grow it tend to continue active and effective representation until the sale, because a vibrant client base can bring a higher selling price.

   Clients may choose to take their files and go elsewhere, but on balance selling a practice is in the client's best interest.

2. Selling gives solo practitioners more protection

   Large-firm lawyers "sell" their practices now. They simply call the process something else, like "retirement," or becoming "special counsel," or taking "emeritus status." The result is the same: Another lawyer in the firm takes over the client list.

   Solo practitioners can only receive the same advantage when they sell a practice outright; ethical rules to the contrary, particularly those that prohibit realization of "goodwill," put solos at an unfair disadvantage to big-firm lawyers.

3. Selling part of a practice creates greater efficiencies

   American Bar Association Rule 1.17 allows the sale of an area of practice. This rule should be adopted by states uniformly, because it allows lawyers to focus on areas of practice in ways that benefit them and their clients.

   For example, if a lawyer maintains both a probate and an estate administration practice, he should be permitted to sell one or the other in order to focus energies and client attentions in one area. This relieves the lawyer from the burden of continuing a practice at "full speed" (which may no longer be physically possible), or from trying to slow down in order to keep the full practice going (which may result in a lesser degree of service, to the detriment of the client).

   Lawyers shouldn't have to quit their practice and warehouse themselves until they die. They should be treated as every other profession and business.

   There are safeguards already built into the system to protect clients in the event of a sale. The time is here to protect the interest of the lawyer as well.