Why Most Key Employee Lawyers Choose Not to Purchase Their Boss’ Law Firm

In Ep. 59, Senior Attorney Match’s Jeremy E. Poock, Esq. explains why most key employee lawyers do not want to purchase their boss’ law firm.

As Poock points out, key employee lawyers typically do not want to purchase their boss’ law firm because, at some point, they will perform a Risks vs. Rewards analysis.

 

Even though the rewards, at the outset, appear appealing, the risks often outweigh those rewards.

 

The rewards include: (i) Increased compensation and access to profits; (ii) Management authority to make changes; and (iii) The option and ability to grow the practice.

 

As good lawyers, key employee lawyers then start spotting issues, i.e., risks, which include the following: (i) The possibility of not originating enough new clients to maintain the firm’s cash flow needs; (ii) The challenge of replacing a Senior Attorney founder from the standpoints of skills, billings, and rainmaking capabilities; (iii) The potential for making less money rather than more; (iv) Personal debt exposure (egs. personal guaranty to a lease or line credit); (v) Decrease in work-life balance; (vi) Unforeseen changes (ex. loss of 1 or more key employees).

 

“So, when key employee lawyers . . . perform this Risks vs. Rewards analysis, the risks just all too often outweigh the rewards,” Poock states.

 

Poock also points out that most key employee lawyers do not want to purchase their boss’ law firm and cannot afford to either.

 

Instead, most key employee lawyers seek the following:

 

A reliable, safe, and predictable job.

 

When Senior Attorney law firm owners falsely expect their key employee lawyers to purchase their law firms, unfortunately, such false expectations can result in a Random Tuesday Event, where a key employee lawyer gives his or her boss only 2 or 4 weeks notice in advance of joining another firm. 

 

In addition to the short-term loss in revenues that such a Random Tuesday Event can cause, Poock explains that the unexpected departure of a key employee presents the following longer-term negative impacts, as well: (i) The inability to retain as many new clients if the firm no longer has the capacity to represent as many clients; and (ii) A loss in firm value due to a combination of (a) A potential loss of clients who join a former key employee at a new law firm; and (b) Decreased appeal to a Growing Law Firm purchaser who wants and needs a selling law firm’s key employee lawyer to continue representing the firm’s clients, as well as clients of a purchaser’s firm.

 

By contrast, when Senior Attorney law firm owners recognize (realize) that their key employee lawyers do not want to purchase their law firm and can’t afford to either, they can then realize the following:

 

Key employee lawyers present 1 of the following 3 key resources that Growing Law Firm purchases seek when purchasing a law firm:

 

1. The Selling law firm’s Book of Business

 

2. Key employee lawyers and para-staff, whom Growing Law Firms want and need for the purposes of continuing to represent a Seller’s clients, plus clients of a Growing Law Firm.

 

3. The combined subject matter knowledge of Senior Attorneys and their key employee lawyers, which today’s Growing Law Firms need to convert to digital content for the purposes of attracting the attention of today’s and tomorrow’s clients who search online for lawyers and law firms to retain.

 

And, when Senior Attorneys sell their law firms to Growing Law Firms, Poock explains the following 4 Winners that result:

 

1. Senior Attorneys: Senior Attorneys win by monetizing their law firms; spending more time with their families; no longer needing to manage “the office;” and having the option to continue practicing in an Of Counsel type capacity for months, or even years to come.

 

2. Key Employee Lawyers & Para-Staff: Key employee lawyers and para-staff win by maintaining a reliable, predictable and safe job, as well as the benefits and joy of maintaining their team at a new employer.

 

3. Clients: Clients of a Senior Attorney-led firm win by benefiting from continuing, competent legal representation.

 

4. Growing Law Firms: A Growing Law Firm purchaser wins by acquiring the following 3 resources needed to boost growth (i) Clients; (ii) Experienced lawyer and non-lawyer staff; and (iii) Subject Matter Knowledge offered by Senior Attorneys and key employee lawyers to convert into digital content to boost their multi-channel digital marketing efforts to generate new clients who search online today for lawyers and law firms to retain.