Q.1 from Ep. 24 of the Ask the Law Firm Seller Show: Why do key employee lawyers consider purchasing their boss’ law firm as too risky?

During Ep. 24 of the Ask the Law Firm Seller Show, Jeremy E. Poock, Esq. addresses the following question:

Why do key employee lawyers consider purchasing their boss’ law firm as too risky?

 

As Poock explains, “[W]hat we see in the marketplace is that when Senior Attorneys consider selling their law firms to whom they consider an internal successor, which is typically one or more key employee lawyers . . .those key employee lawyers will perform a Risks vs. Rewards analysis, where the risks all too often outweigh the rewards.”

 

Even though key employee lawyers recognize the benefits of potentially higher compensation, access to firm profits, and the ability to succeeding to managing the practice, they also spot the following issues when considering purchasing their boss’ law firm:

 

• What if they are not able to originate the same amount, or even more clients, than the Senior Attorney founder(s) of the firm.

 

• How will they replace the Senior Attorney founder(s) of the firm from the standpoints of rainmaking and revenue generation?

 

• What if instead of benefiting by higher compensation and access to profits, their compensation actually decreases?

 

• What about taking on personal exposure in the form of guarantying a lease and bank credit line for the firm?

 

• What if a key lawyer or para-staff unexpectedly leave the firm?

 

Based upon the risks outweighing the rewards, Poock points out that key employee lawyers typically do not want to purchase their boss’ law firm and cannot afford to either.

 

Instead, key employee lawyers at Senior Attorney-led firms typically want and need the following:

 

A reliable, predictable, and safe job.