This is the first question we always get asked by everyone who lists their business on the Jonathan Fagan website. It is quite an easy question to answer because it is pretty much always ‘how long is a piece of string’.
Law Firm Sales
The usual length of a law firm sale depends on a number of factors. Firstly, if you are a retiring solicitor with a practice that consists of yourself, perhaps your partner and a couple of support staff, coupled with a turnover of about £200k and a mainly conveyancing and wills & probate practice, then it is quite possible it will take between one and three years to sell your firm. This is not always the case, and our fastest sale in this category is six weeks, but similarly we have law firms listed with us who have been registered with us for over two years, and despite various conversations with potential buyers they are still up for sale.
If you are a law firm with very few clients and essentially selling as a shell, then it is possible that your practice will sell in less than three months.
If your firm has a turnover of more than £500k and less than £2,000,000 then it may well take between two and four years to find a potential buyer.
Our fastest deal ever has been three weeks and our longest one took two and a half years to go through the process from start to finish. The process of selling a firm does not just end when you find a potential buyer. The next process is due diligence and whether or not you manage to get through this process as well as the agreement to sell is another matter entirely.
In the first instance you need to be aware that there are a number of factors affecting how long it takes to sell your firm, which can include whether or not your practice has claims against it, the price you are looking for in order to affect a sale and also the information you have available to any potential buyer in order to progress the sale once discussions have started.
Firms that tend to be listed with us for a long time tend to have particular problems with the information they have available to provide to potential buyers. Quite often partners who have been in the same firm for many years and have never embraced case management systems find it very difficult to collate the information together that any potential buyer is looking for. Buyers want details of just about everything and they want to be able to access it easily without having to trawl through copious amounts of paperwork dating back many years. One sale we have come across was with a firm where everything was paper based and the buyer had estimated that he needed to actually employ someone to go through and deal with the paper files in order to make the business function once he had taken over.
A practice that uses case management software, has all the clients readily accessible and perhaps also in a spreadsheet, has details of everything from staff numbers through to the photocopying contract in one place for the buyer to see, will find it a lot easier to sell their practice than somebody who has no information available or very little, and is unable or unwilling to provide answers to questions when asked.
Accountancy practices are very different. There is at the moment a huge market for the buying and selling of accountancy firms and practices do not tend to stay on the market for lengthy periods of time. We would expect for most firms to have offers in place from at least 3 potential buyers within a matter of days, if not a few weeks. Again it will very much depend on your willingness to be active and respond swiftly to queries and requests. Offers are usually quick to come in and most buyers do not waste time in getting to a reasonable package. This is an extremely busy market with lots of active buyers out there with money to spend.
So if you want to know how long your practice is going to take to sell then the answer is anything from three weeks through to about four years, but depends very much on your specific circumstances, the size of your firm and the information you have available to potential buyers. Accountancy practices should usually sell virtually immediately but law firms really depend.