When it’s time to retire, you have three options:
- Turn off the lights, walk away, and never collect another dollar from your practice.
- Work into your 70s or 80s so you can continue to receive income. In other words, skip retirement and work until you die.
- Sell your practice to someone who will gladly pay you for the privilege of carrying on your practice.
The option you choose (or that chooses you) is determined by the answer to one question.
Did you create sellable equity, or did you create an annoying job that nobody wants because you didn’t set up your practice the right way?
Most attorneys never think twice about building value and making their firm sellable until it’s too late.
Your Practice Can’t Just Be You
Like any business, a primary goal of your practice should be to create equity.You could be bringing in cash today, but that doesn’t mean someone will want to buy your firm from you tomorrow.
If you want to be able to sell your practice as part of your exit strategy, your practice needs to be a sellable product.
It can’t just be you. Your practice needs to be a product outside of yourself.
Why would any person with half a brain ever want to buy your practice if it can’t exist without you?
Click here to get access to my free Law Practice Growth Guide that shows you how to grow your law firm predictably and create freedom for yourself.
Separating Yourself from Your Business
Most attorneys don’t view their firms as a business, and they don’t think about their firm as a business independent of themselves. But - AND THIS IS IMPORTANT - even if you do almost everything yourself, you can still separate yourself from the business.
Think about the most basic things your firm must do in order to exist. You have to attract prospects, convert prospects into clients, and service those clients.
If you want to hand over your firm to someone else, how would these things get done?
You need to have systems in place. Systems for attracting, converting and servicing clients.
If you show up to work, figure everything out on the fly, show up the next day, and figure it out all over again, you have no systems in place.
More importantly, the value of your firm is squat.
Lawyers who constantly make things up as they go end up completely exhausted. Physically, mentally, and emotionally spent.
It’s one of the biggest causes of lawyer burnout.
How to Know if You’re Creating Value
It’s actually a pretty simple formula. You know you’re creating value if:
- You’ve built and documented marketing systems that deliver a steady stream of prospects to your firm.
- You have a proven method for converting prospects into clients.
- You have a formal process for servicing your clients.
- You know exactly how much it costs to make your systems work.
- Somebody other than you could open up a manual for your law firm know exactly what to do.
A lot of attorneys think having systems and processes stifles creativity and crimps their freedom.
Actually, it does the opposite.
When you have systems in place, you know what’s important and what’s not important. It’s easy to prioritize and delegate. Nothing creates freedom and enables creativity like knowing exactly what you have to do each day to be successful.
If you have to reinvent the wheel every day, it’s impossible to succeed. And you’ll never create sellable equity for your firm.
Ask Yourself This Question…
Each time you write a contract or a brief, would you rather work from a form file or create a new contract from scratch?
It’s no different for business. Set your firm up the right way to build equity and value.