The Exit Strategy: How to Sell Your Law Firm with Expert Ed Alexander

Unlock the full potential of your law practice with guidance from the one and only Ed Alexander, as we dissect the transformation of a typical law firm into a thriving, market-ready business. We shed light on the intricate dance of distancing yourself from being the epicenter of your firm's sales, marketing, and intake – a change that's not just beneficial, but essential for creating a sellable asset. Ed, with his rich experience, spells out the blueprint for systematizing these areas, freeing you from operational chains and making your firm irresistible to prospective buyers.

Hear from a master as Ed delves into the financial finesse required to dress your firm for success. Whether it's the unveiling of financial controls, the clarity of your statements, or the subtle nuances that make your firm a catch in the eyes of investors, Ed covers it all. If you're contemplating a grand exit or simply want to elevate your practice, this episode is an absolute goldmine, elucidating the impact of your firm's size on its appeal and the market trends swaying the law firm landscape.

Finally, we navigate the complexities of passing the baton with finesse. From valuing your firm to intricately choreographing ownership transitions, Ed imparts wisdom on training new partners, tweaking compensation structures, and managing the delicate human element of succession. He even points you to the online troves of his expertise, including the Law Deals podcast, ensuring you're well-equipped for the journey ahead. Our conversation with Ed Alexander is a treasure trove of strategic insights for any attorney ready to craft a lasting legacy.

Catch more from Ed on the Law Deals Podcast or at LawFirmExitSuccess.com.

____________________________________
Brian Glass is a nationally recognized personal injury lawyer. He is passionate about living a life of his own design and looking for answers to solutions outside of the legal field. This podcast is his effort to share that passion with others.

Want to connect with Brian?

Follow Brian on Instagram: @thebrianglass
Connect on LinkedIn

Transcript

Speaker 1: 0:00

The first and most important thing to do is to get the sales and marketing piece out of the lawyer's hands and, as a general rule, right, that's, communicating with referral sources on a regular, consistent basis without the lawyer having to initiate all of that contact. That's a great first step. The second step would be getting the intake system down so that the lawyer is not the sole point on the intake system, free from the legal chain.

Speaker 2: 0:55

Brian and a friend of mine. Ed is a lawyer in Florida who specializes in helping lawyers run their law firms in ways that they can buy and sell them and do all of the transactional things that lawyers kind of know how to do. But as soon as you make it about a law firm like, we lose our minds and we don't remember any of the business dealings. Ed, welcome to the show.

Speaker 1: 1:17

Thanks, brian. Thanks for having me Look forward to talking to all your audience here about creating a law firm of their dreams and being able to exit when they're ready, and being able to sell it at some point Exactly.

Speaker 2: 1:32

So, ed, I think the sense in most of the legal community is that, you know, we build these things where we work and work, and work, but at the end of the day, unlike operating a, unlike operating a deli or small grocery store or a gym, law firms seem very, very difficult to sell. And so, first of all, am I right about that? Are they difficult to sell, or does everybody else have it wrong?

Speaker 1: 2:03

So they're more problematic to sell than your normal business, for two reasons. The first is we've got a very limited market that we sell to, and that market tends to be extremely conservative, right, and so this is kind of the outside sale that I'm talking about here. The second issue is that, as on whole, you know, our law firms I shouldn't say ours, but many law firms are built around the actual lawyer themselves, so without the lawyer, there isn't much of a business there, and so they built a job which works for them, which is great for them, but at the end of the day, there's really nothing for someone to come in and step in and take over and just operate the systems that are there.

Speaker 2: 2:52

And so if you were properly constructing a law firm that was not built around a central character, how would you structure?

Speaker 1: 3:01

that the first and most important thing to do is to get the sales and marketing piece out of the lawyer's hands and, as a general rule list, that's communicating with former clients, that's communicating with referral sources on a regular, consistent basis without the lawyer having to initiate all of that contact.

Speaker 1: 3:35

That's a great first step. The second step would be getting the intake system down so that the lawyer is not the sole point on the intake system. Intake system down so that the lawyer is not the sole point on the intake system. Once you do that, then you can start with the actual practice systems right and making sure that what the lawyer has to do are only the things that the lawyer has to do, that we've offloaded everything that can be done by somebody who does not have that law degree and that we've documented those systems so that with limited, I guess, heartache, those people can come and go in the law firm. And then eventually we got to move to what the lawyer does and start to parse that out into what is the highest and best use for the lawyer that owns the firm and get them into that role so that she can then offload the other aspects of the practice to other attorneys, who would be very happy to perform those tasks.

Speaker 2: 4:39

It's really interesting that you phrase it that way, because it seems to me that most lawyers do the exact backwards path of what you just described, right, first we hire an associate and we train the associate to do the legal work. Then you may hire an intake team, but the very last thing that we give up is the marketing, especially entrepreneurial lawyers, because we think that we're the best number one at talking to clients and signing them up, but number two at tailoring the marketing, which is always about us. Right to speak to the market, and so talk for a minute about what a buyer is looking for when they're purchasing a law firm.

Speaker 1: 5:18

Well, buyers are always basically consistent income that's going to stay there once the buyer comes in and takes over the practice Right and consistent income is a function of the good marketing system, the good intake system, people who know what they're doing and can process the files for clients Right, so that that consistency and what's going to make that continue into the future is again making sure that the risk is reduced so that if somebody leaves, we have a way to replace them and there's an easy method to get the new person up to speed, so that if we lose a referral source, that we've got 10, 15, 20 others who are sending us cases, so that it's not the end of the world and we know how to go out and find the next referral source and all the way down the line.

Speaker 1: 6:14

Plus and I didn't mention this in the initial part we got really, really good financial controls so that you can look at the financial statements and know what's going on in that practice, you can run the practice from those financial statements and that the buyer can look at them and say, okay, I'm confident that I know what's going on in this law practice because these financial statements look good and are good and if the lawyer is doing the financial statements, that's a major red flag is doing the financial statements.

Speaker 2: 6:48

That's a major red flag. So really two risks, two major risks that you've identified as a buyer coming into a law firm. Number one is do the financial statements really tell the story of what's actually going on in the firm? And then number two is okay, if I buy lawyer Smith's law practice and lawyer Smith retires, does all of his staff just dissipate and does all of the institutional knowledge that's been built up over the years go out the door with him? And then I'm left holding the bag with whatever the structured deal is that I had with the lawyer selling their law firm at some point in the future, Like, at what point do you think they should start thinking about setting up those structures? How far in advance do I have to have all this stuff in order before I go out looking for a buyer?

Speaker 1: 7:35

That's interesting. You say that because the I was thinking about this the other day. There's a book by oh, my gosh coach. It's called the gap and the gain, right, my gosh coach, it's called the Gap and the Gain, right, ben Hardy, dan Sullivan. That's it, dan Sullivan.

Speaker 1: 7:50

Yeah, and so, as we're, you know, as I was thinking about this because there were some things I wanted to change in our practice, and you know you automatically fall into that gap view of what's wrong with the practice and looking back. But at the end of the day, the answer to your question is as early as you possibly can make it right. But you got to realize you're not going to get there tomorrow, right, this is not something. And unfortunately we get calls like this all the time, where somebody is whatever 65 and they're like okay, well, you know, I want to sell, I want to be out, I want to be out, I'm going to retire by December. I mean, it's rare that that person's going to have a practice that's saleable because they've done all this work already. And number one and number two, you can't do that in nine months. It just isn't possible to complete a transaction and do it right in nine months. Does it happen occasionally, yes, but you shouldn't plan that that's going to actually be your case.

Speaker 2: 8:48

Do you think that there's a sweet spot for the size of a law firm to be saleable? Because you know again, if you have a practice that's one or two lawyers and maybe three or four staff members, you can have written procedures. But man, it's hard to spend all the time to document everything that goes on, even in a single practice area law firm like that, without having an additional sort of office operator whose job it is to number one, document all the systems. Number two, check back with the people that are running the systems that this is what we're actually doing. And then, number three, keep up with hey, we just had this better idea and now we need to change the system. So for firms that are that size, is sale even an option?

Speaker 1: 9:33

Absolutely so. If I look at it and I look at the different firms, I do a break point, maybe like a million and a half dollars, right? So below a million and a half dollars you're looking at a individual buyer or maybe two attorney buyer. Above that million and a half dollar mark you need to be looking at other firms that can come in and acquire the practice area or the geographic area, right? So I make the difference between the financial buyer so that's somebody coming in and expecting the return on investment and then the strategic buyer. That's essentially coming in and saying, hey, we've got this practice already operating, we can leverage that in some way and therefore it's worth more to us than we'll have to pay for that firm. There's a big benefit to to me, the buyer, the strategic buyer.

Speaker 2: 10:22

The strategic buyer is the one. Is that below or above 1.5? I'm looking for a strategic buyer Above. So above 1.5, I'm really looking to roll into a larger law firm, but below 1.5, I'm probably getting acquired by who?

Speaker 1: 10:41

By an individual lawyer or lawyers. Right, maybe another small firm, but most of the time individual lawyer or lawyers.

Speaker 2: 10:50

And have you found that? Most lawyers? Because again, it seems to me all right if I've got a $1.5 to $3 million law firm, I've got these great systems, but then I get acquired by a larger law firm. Aren't they just going to take the clients and take the list of referrals and then impose their own systems? That got them to maybe 10 or 15 or 20? So what is the benefit to the purchaser of the systems that I've built and documented in my firm?

Speaker 1: 11:18

So two things there. One is that it's not necessarily a large law firm that's going to come in and acquire you, right, it could be another law firm and the value is, at the end of the day, your law firm is operating and creating that cash flow, right? So if they have systems and I don't think it's a foregone conclusion that a lot of I'm going to call a medium-sized firm have good systems A lot of them are a bunch of solos operating together right. So if they have systems then I guess you'd have to take a look at it and kind of merge those two systems and find out which worked better and which didn't. The bulk of the transactions and the bulk of the firms are going to be a million dollars and under. That's just the way it's. If you look at the 80-20 rule that's where 80% of the firms 20-80 rule that's where 80% of the firms are going to be is below that million dollar number.

Speaker 2: 12:36

And so, for the firms that are below a million dollars in annual revenue, what kind of multiple? If there is a you know, maybe a bell curve of the multiple, are those firms usually trading?

Speaker 1: 12:50

for. So the multiple that you look like, that you're looking at is it's a question of multiple of what cash flow, right? So sometimes you talk about EBITDA, which is earnings before interest, taxes, depreciation and amortization, and then other times you talk about adjusted seller discretionary earnings right, so you take the net earning In. Then other times you talk about adjusted seller discretionary earnings right, so you take the net earning. In that case you take the net earnings of the firm and you add back all of the benefits that flow to the owner and you deduct out all of the special deals that the owner has. So if the spouse is working there and not charging a salary, but to have somebody come in and do that work, it would be 70,000. You've got to take 70,000 out of the earnings, right? And so you do that adjustment and you come up with seller's discretionary earnings. So that's kind of looks like the cashflow out of the firm that would benefit the owner, and then EBITDA effectively adjusts that to say what would it be if I had somebody else run the firm for me? Okay?

Speaker 1: 13:55

So in the smaller firms you're going to be using that adjusted seller's discretionary earnings, right? So SDE is what we call it. And if you use that SDE, it's going to be, depending on the quality of the firm and the quality of the earnings, about 1.8 to 2.2. Yeah, making notes, yeah sure, 1.8 to 2. If you get high, if you get a larger firm that grosses more, that's going to go up a little bit. Right now those firms are going to have be really judged on ebida more so than discretionary earnings and so on theITDA factor. You're going to go up in the three or four range.

Speaker 2: 14:41

Because as you're grossing more, you are more likely looking more and more like a real business, right, but as you're grossing less, I mean you're talking about, okay, adding back in the 70,000 that it would take to replace the spouse, but the flip side of that is okay, taking back out the $100,000 that we're paying a spouse that we could pay, you know, $45,000 to have somebody else do it because we want the business to maybe show no profit, and adding back in all of the things like a cell phone bill and the health insurance and all of that stuff to the owner take home, which I think really gets lost when we're talking about small law firms many times, right, when you look at your P&L at the end of the year and you go, that's not all that impressive. Well, we've forgotten about all of the things during the course of the year that, as a W-2 employee, you probably wouldn't have had the benefit of right.

Speaker 1: 15:31

Right, it's always interesting too. So, yes, those are all things, like you know traveling to the legal conference and staying for a week extra because it's in Maui, Hawaii, or something you know, those kinds of things that are all benefit the owner. They are not necessary for the operation of law firm, but the owner can deduct them because they're affiliated in some way with an expense of the law firm. And so those are all. We take those all out to try and find out what is the real benefit that's coming out of this firm to the owner.

Speaker 2: 16:03

That's great. So who is the market of these buyers now? I mean, we hear more and more like these whispers of VC capital in Arizona and in Utah and, I think, in the District of Columbia, and there's always this like oh, when it comes to my state, when it comes to my state, are the law firms that are trading hands? Is it majority small law firm to a little bit larger law firm, or are there real business, institutions and VC money, in the same way that small medical practices have been snapped up by institutional money in the last couple of years?

Speaker 1: 16:42

I've not experienced institutional money coming in to buy law firms yet. I think that it will ultimately come. I was just having a conversation with a gentleman who is, I don't know, a CFO type for law firms and it was interesting because we were talking about this and he said it would never happen. And I was saying that I thought there was actually a middle ground to it, and the middle ground is, if you look at CPAs, cpa firms can have a shareholder, that's a 49% shareholder, so the CPA remains in control of the firm and I think ultimately, that's what we're going to go to. It may take a while, but I think that's what we're going to go to, because what you see is, think about the family lawyer who has a couple of therapists, or an elder law attorney with a social worker. Right, you've got no way to put the golden handcuffs on that person to say you're an owner of this business. And setting that structure up avoids the problem that all of the lawyers are complaining about, which is, you know, I've got to control the firm because of the ethical rules, but it also allows the lawyer to bring on those key non-attorneys in ownership roles and part of the firm structure. So I think that's ultimately where we're going to end up.

Speaker 1: 17:57

Now, going back to the question, the vast majority of firms are internal sale transactions, so it's not going out to the marketplace. What it is is having the key associate inside the firm or it might be somebody outside the firm who you bring on as a lateral, and it really looks like we're going to create a partnership and that partnership is going to have built into it the mechanism to for that succession in the long run, so that you know, it might be five years, it might be 10 years, but at some point in time the older of the two partners can pull the trigger by saying I'm ready to retire now and giving notice, and then we have a built-in mechanism for grazing the firm and then managing the buyout when I went to structure this deal with my dad five years ago.

Speaker 2: 18:58

Now there's almost no one online where you can go and find this information. Now it's all over the place for medical practices. How do you buy into a medical practice? Orlandobusinesslawyercom and lawfirmexitsuccesscom, which we'll get into in a little bit. Talking about what does the structure look like for the key associate who's becoming a partner? So can you talk about maybe the most common ways to structure the transition of ownership and equity to somebody who you know like and trust, who's been in your firm for a long time, who now you want to give some opportunity to participate in the equity?

Speaker 1: 19:43

Sure, so the 30,000 foot level view of it is we essentially bring them on in a small step, so we bring them on at about a 10% number and then so they earn that.

Speaker 2: 19:57

So I'll talk about the mechanism for that a minute sorry, when you say bring them on, you say that is that you mean okay, today you're an associate, tomorrow you're a partner with 10 equity, correct?

Speaker 1: 20:09

okay, and so that's typically done with, uh, what I call sign and drive up. You know, I always if you see the car dealerships, they say you can come in and sign and drive out, right, so you don't put any cash down, that's sign and drive to buy into the law firm. So the owner is effectively financing that 10 percent. They, the associate, comes in, they're a 10 percent owner the day they sign the papers but they don't own it, right, because it's a note on it. I say they don't own it, no-transcript.

Speaker 1: 21:00

Now you kind of can go in two directions. One is you could bring them on for a greater percentage, right? We don't want to go over 50% and we probably don't want to go to 50%, right? So the current owner, the founder, if you will, is always going to own a majority of the firm, and so we can bring that person up to 25, 30, whatever number you want it to be.

Speaker 1: 21:25

And over that period of time we're bringing them in as an owner, we're training them how to be an owner, we're showing them how to go out and market, right, all of the things that they need to do to be a successful law firm owner. And so at the time that the retirement comes around. Because they own that 10%, under current SBA guidelines they're able to use that 10% as their equity interest in the firm to go get a loan and buy out the partner. Now, of course we can't rely that that's always going to be the case. So we put in a backup mechanism and the backup mechanism is still the owner going out and financing it, but we make it at a less favorable rate than going out and getting an institutional loan. That's guaranteed by the SBA.

Speaker 2: 22:15

Less favorable to the borrower.

Speaker 1: 22:17

Correct. Yeah, so a shorter term, higher interest rate, that kind of thing and then.

Speaker 2: 22:24

so so is somebody who comes in associate day one, partner day two at 10, then for the next, uh, four or five years there's still 10 equity owners in the firm and then and then there's some trigger at the end of that. Are you doing back of the napkin calculations about okay, now we've generated X number of profit, like now. Now I think you meet the 50, 50 or a hundred percent. How does that part work?

Speaker 1: 22:53

So the a hundred percent wouldn't happen until the founders ready to retire, Right. So what we would do then is we, the founder's, ready to retire, right. So what we would do then is we'd set some criteria. Now, when you look at this pie, if I'm giving you 10%, I'm technically selling it to you, but at the end of the day I'm really to grow that firm by the value on day one. Basically, in this case at 10%. If I'm giving you 10%, I've got to grow the value of the firm. It's really 11.1, but whatever, 10%, right. So I need to grow the firm 10% to bring me back to whole, bring me back to whole. So then, on your criteria piece, what I would say is okay, let's figure out how we get the firm to be 20% more valuable than when I'm brought you in, and at that point I'll sell you the next 10%, Right. So in the first one I took, I took the hit. And then the second one show me you can do it.

Speaker 2: 23:58

Basically. So you sell or finance essentially the first 10% and then, as they make up that 10% and then get to 20, now when you say I'm going to sell you the next 10, it's almost as though sell is in air quotes, because okay, now you've earned it and now we're going to paper over the next 10% of the deal. Do I have that about right?

Speaker 1: 24:19

Yeah, we have to be careful about the tax laws, right? So sometimes people say, oh, I want to give it to them, you can't give it to them. We've got to make sure the taxes are always going to have to be paid. It's just a question of are they paid day one, or are they paid and spread out over an extended period of time?

Speaker 2: 24:42

So as long as we've dealt with that, then we're good to go. But that's, you've got it right without the tax piece. And then I think the difficulty for somebody who's bringing on an associate or a non-equity partner who's been here for a long time is figuring out. Okay, now I'm going to make you a 10% equity owner for that, but the future owner that probably in a lot of instances is a pay cut underneath what you know what the bonus structure would be. And so you've got to really be very thoughtful, I think, from the beginning, about setting up compensation for associates and senior people, because I mean, it just seems to me like I wouldn't be giving you the same bonus structure that you had. And then also the 10 percent Is that? Am I right about that?

Speaker 1: 25:14

part. Well, so two things. One is compensation is absolutely crucial. You've got to have the right compensation, so you're right about that. But the profits that come out of the firm should pay for the first 10%. Now what ends up happening is that the owner sometimes takes a hit because the owners basically baked in so many expenses, personal expenses, into the firm. And remember, we've got to have profit, cash flow, coming out of the firm. So if we're consistently showing the firm at zero, even though it really is making money in that discretionary earnings piece, the owner is going to have to say okay, wait a second. How do I have to restructure this so that at the end of the day, there is profit left over so this person can pay for for their interest? Or they could bonus that person so they could go out and say all right, grow the firm by 10% for each, whatever X dollars of revenue that we bring in, I'll give you a bonus. And then that bonus goes to be applied to the note, the purchase note.

Speaker 2: 26:18

And then are you typically seeing the term is escaping me now, but the period where the owner after the sale stays on maybe an earn back or something or an earn out or something like that is the term. If I decide I want to sell my firm next year and I've done all of the things correctly to build the systems and to have the books correct, how long is the owner still sort of tied up in an earn out period typically?

Speaker 1: 26:45

So there are a number of different structures to the deal but if we look at it, if I just answer the question about the owner being tied up right, we need that owner tied into enough counsel agreement because, number one, we want them to be able to talk to clients of counsel agreement. Because, number one, we want them to be able to talk to clients. And number two, we probably want to use their name in the firm. Most firms are not trade names, they're individual lawyer names and at least in Florida, and I think most of the ABA model rule states in order for you to use the name of a lawyer in the firm, that lawyer has to be available in an up-counsel capacity. Once they retire, right, or they die, you can use the name in the firm.

Speaker 1: 27:29

If they die, If they go to work for another firm, it's not going to, obviously you can't use their name. So just from an ethical standpoint we've got to tie them in. Now, many times you'll get proposals where it'll be a complete earn out or it'll be a partial earn out and those we would like to try. And when we're working with the seller we want to keep that to be about a year period of time, not really more than a year. All right, and if you're using an SBA loan to buy a firm, then the SBA currently requires that the owner be gone in one year, which has always been foolish to me. That's what they want, so interesting.

Speaker 2: 28:08

Well, that's because they're not probably thinking about law firms. They're thinking about coffee shops and gyms and plumbers, yeah Right, and plumbers, yeah right. When you have the guy or the girl who's been the central marketing figurehead of the firm, you probably want them around for more than a year, or their likeness around for more than a year.

Speaker 1: 28:33

You bet I want them around as long as possible telling clients that, hey, this Mrs Byer is a fantastic attorney I'm working with. That's why I'm working with her, that's why I brought her on. I'm here for you to always contact me, but Mrs Byer is definitely the one who's going to handle this All right, Ed.

Speaker 2: 28:51

So you were doing a tremendous service to the industry with some of the information that you're pumping out. So you're running the Law Deals podcast now, which people can go check out and which I just binge listen to. Who's that show for?

Speaker 1: 29:06

Or the firm is probably a million and a half and less, and we talk about compensation methods, we talk about the different types of exits, talk about the different types of firms, the different. You know, there's three types of firms in the world and I'm not referencing practice areas, I'm referencing firm types, you know. So, yeah, and I'm going to have some guests on and, you know, look forward to putting out. I mean, one of my core values is educating. I really enjoy putting out information and educating people on things. So it works well with that core value.

Speaker 2: 29:42

Well, don't leave me hanging there. What are the three types of firms?

Speaker 1: 29:45

Ah, so there are process firms, there are relationship firms and there are brain surgery firms, right. So process firms would be think of a consumer bankruptcy firm and consumer bankruptcy without tax or anything like that. So it's, you know, I've got a bunch of credit card debt, I want to get rid of it. That's a process firm, your uncontested divorce firm, right. So there are firms where we, a client, comes in, they need a service, they want it done cheaply and efficiently and at the end of the day, it doesn't matter who the lawyer is, we just want to get it done.

Speaker 1: 30:25

The next step is the relationship firm, and this is the vast majority of firms. So the firm is based on the relationship of the client and the lawyer and the work isn't I wouldn't say it's generic, but it also isn't brain surgery. It's typical, straightforward legal work, but there's more of an emphasis on the lawyer's on the face of the planet, right. And so that's the, that's the equivalent for the law firm. Those are almost impossible to sell because all of the goodwill is the brain surgeon, right. And so you want to stay away from that as much as you possibly can and stay on the relationship side, but make your relationship be one of a team relationship, not the individual lawyer.

Speaker 2: 31:26

Yeah, it's interesting because it seems to me the process firm would be the easiest one to sell. Probably I don't know, I, I, I guess I hesitate to say probably the highest profit margin, because in a, in a personal bankruptcy firm, that's exactly like you just described. You really can push down much of the work to low dollar per hour, even VA positions. But then on the flip side of that you probably can't charge very much money because you are competing on price, because who the lawyer is doesn't matter, it's just about. You know the $99 uncontested divorce case, right, yeah, which? And so really that sweet spot is being in a relationship where you have all of the processes and underneath the surface somebody can run most of that stuff through the machine.

Speaker 1: 32:23

But then you have not just you but other people on the team going out and keeping relationships in the community to keep the cases coming through the door.

Speaker 1: 32:30

Absolutely, the process firms are simple to sell but the margins aren't there.

Speaker 1: 32:34

So if you look at we were talking about SDE a few minutes ago if you look at SDE from a small law firm so a couple of lawyers, maybe a paralegal and a couple of staff people maybe a paralegal and a couple of staff people you know you're you should be finding the SDE to be like in the 33 to 35, 38% range. So for every dollar, that 35 cents is going to flow out to the owner. And when you look at those process firms, you're going to be down in the twenties, maybe even a little bit less right, and and I'm talking about the smaller firms because when you get to a larger firm it's naturally going to drop down as revenue increases, that percentage is going to drop down. But when you look at the smaller firms, those percentages are going to be lower in the process firm. So on a dollar-for-dollar basis of revenue, you're not going to get as much purchase price. So on a dollar for dollar basis of revenue you're not going to get as much purchase price but at the end of the day they are much more saleable because it is literally a transfer of a system and you just have to be able to operate it, and those firms are much more susceptible to being trade names right the marketing around the price point on the uncontested divorce or the price point on the chapter seven bankruptcy, and it really don't depend on the lawyer's name being on the building at all.

Speaker 2: 33:49

That's exactly right.

Speaker 1: 33:50

And you know ticket firms and traffic firms and you know things like that.

Speaker 2: 33:56

And then you're also. We want to send people to lawfirmexitsuccesscom where they can download the e-book to talk all the way through the system.

Speaker 1: 34:07

So, ed, talk about what they can find on lawfirmexitsuccesscom there we have a story about a state planning firm in particular and how we assisted that attorney in transferring the state planning firm from an internal perspective. And then there's an opportunity for a download there and you can get that e-book and we talk about all different types of exits, from an external exit, you know, all the way through to more internal exits and unfortunately just one of them closing down right, which is kind of sad.

Speaker 2: 34:39

But why do you think there are so many lawyers like you who are catering to the law firm market? Or are there so few lawyers like you? Because I couldn't find you five years ago.

Speaker 1: 34:56

That's what's throwing me off. I only know of a couple other firms that do what we do, so I'm not necessarily I don't think there's a lot of people out there, but I I'll tell you that from my perspective. You know, I looked at this. It's a. To me it's. It's a great niche, right, or niche, however you say it Because you've got a bunch of smart people. You've got people who want to build businesses not everyone, but of course, some of them want to build businesses and you know it's a regulated area, highly regulated area, and those ethics rules really impact the way that you can transfer your business.

Speaker 2: 35:34

And then you know the flip side of that is that most lawyers think, for one reason or another, they're actually capable of doing this themselves or they you know. But what happens is you have talked to your three friends and you decided that's the way that everybody does it Right. And then you get into these models and discussions with guys like you and you find out no, there's a hundred thousand different ways to structure a partnership. What it means to be a partner is it has a different meaning and in different firms and even to different people and that's something maybe we'll get together and talk about on a later episode is, if I'm an associate, what do I actually want? To be an owner? Do I just want the title of being partner? And then, how do I navigate those waters? So, ed, where can people find more about you?

Speaker 1: 36:19

We can go to alexanderbusbusinesslawcom. We've got a bunch of free information there and of course, you can reach out to me on linkedin. It's attorney ed alexander on linkedin and I'm there.

Speaker 2: 36:33

I don't nearly post as much as you do, brian, but I am out there posting uh, I just started working with a social media company and they posted a couple of videos today that I think are they're good, but they're like a left turn from the stuff that, really, that that I've been posting on linkedin. And then they went and they liked the uh, they liked my own video from me, like well, we gotta, we gotta have a conversation about that. I'm not one of those guys that likes my input. All right, ed, I will make sure that I link to everything that you, everything we discussed in the show description. If you want to go check out lawfirmexitsuccesscom and check out your Law Deals podcast, ed Alexander. Thank you very much. Thank you, brian.